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The town recently emerged victorious from a suit filed in 1997 against Specialty Risk Consultants, Inc., the company that former Cicero president Henry Klosak had hired five years earlier to administer the town’s health-insurance coverage. According to the town’s attorney, Daniel J. Kubasiak, Specialty Risk and various subcontractors engaged in an “elaborate scheme to defraud the town of monies.” The court awarded Cicero a judgment of more than $104 million, though Kubasiak isn’t sure how much his client will actually be able to collect from Specialty Risk and its officers. The suit against Pandolfi alleges that the firm failed to “sufficiently test” Specialty Risk’s records to determine whether its expenses were accurate and reasonable, whether its transfer of money to subcontractors was legal or authorized by its contract, or whether its cash holdings on behalf of the town each year were accurate.
Marj Halperin, executive director for the League of Chicago Theatres, retained Pandolfi as the league’s auditor of record shortly after assuming her position on January 1, 1997. She says she lost confidence in the league’s previous auditor, Morris D. Ziegler & Company, because a reaudit of the league’s books had uncovered a $72,000 shortfall just before she arrived. Both she and the Pandolfi firm have worked for the Daley administration, but Halperin says she chose Pandolfi because the firm offered to do the audit for less than Ziegler had charged. “I was looking to cut costs any way I could because of the unexpected deficit,” notes Halperin. She says she had no knowledge of the malpractice suit against Pandolfi until it was brought to her attention last week. “But I have read a lot about the manage-ment of the town of Cicero,” she adds. Kelly Leonard, presi-dent of the league’s board of directors, says that Pandolfi’s auditors are the only accountants who’ve examined the league’s finan-cial records in the wake of the al-leged embezzle-ment scheme, but he didn’t rule out the possibility that another firm might be called in at some point.
Art accompanying story in printed newspaper (not available in this archive): illustration/Carl Kock.
