Internal Revenue Service (IRS) documents obtained by the Lakefront Outlook show that Tobacco Road Inc., the non-profit group that oversees the Harold Washington Cultural Center (HWCC), routinely failed to disclose its ties to Ald. Dorothy Tillman (3rd).

Experts said there appears to be a series of questionable activities by those affiliated with the non-profit group who failed to disclose their ties to other businesses and organizations. These findings could jeopardize Tobacco Road’s retention of its IRS status as a non-profit group, executives from two charity watchdog groups said.

According to Tobacco Road’s most recent tax returns for the fiscal years from July 1, 2003 to June 30, 2004 and from July 1, 2004 to June 30, 2005, the 501 (c)(3) charitable non-profit organization was listed as not affiliated with any taxable organization through “common membership, governing bodies, trustees, officers, etc.”

In order for an organization to remain compliant with non-profit status requirements, the IRS requires the disclosure of persons affiliated with a non-profit group, and their family members, who are conducting financial or in-kind deals that profit a non-profit group’s senior management or members of its board of directors.

The following potential tax law violations have been noted following a recent Lakefront Outlook investigation:

• The Harold Washington Cultural Center’s executive director is the owner of one of four approved caterers for the HWCC.

• Tillman’s personal assistant is listed as an officer with Tobacco Road Inc. and the Third Ward Aldermanic Office.

• One of the alderman’s sons is a former Tobacco Road board member and the founder of a band that has played at the cultural center.

• The alderman’s office co-sponsors events with the cultural center.

The group’s most recent financial reports show Ald. Tillman’s daughter Jimalita Tillman, who is both proprietor of the Spoken Word CafÈ and the cultural center’s executive director, was paid nearly $45,000 per year for her services at the HWCC. Promotional materials for the HWCC obtained by the Lakefront Outlook list Spoken Word as one of four approved caterers. In comparison, the South Shore Cultural Center has 19 caterers on its approved vendor list.

According to the Illinois State Board of Elections Web site, Spoken Word was paid $7,860 by Citizens for Dorothy Tillman for catering and rental space from March 2003 to February 2006. The cafÈ also provided catering to the 3rd Ward Democratic Organization in November 2004 for $400.

Andrew Schulz, deputy general counsel for the Council on Foundations, said, “It may be legal to do business with a company owned by a disqualified person, and I can think of instances where the non-profit might have gotten a better deal in doing so. But the problem here is the failure to disclose this relationship.”

American Institute of Philanthropy President Daniel Borochoff reviewed portions of Tobacco Road Inc.’s 2004 tax returns, at the newspaper’s request, and found numerous potential cases of tax code reporting violations.

Tobacco Road’s business address is listed as 4645 S. King Dr., the same address as Tillman’s ward office. Illinois State Board of Elections records show Brenda Ramsey, Tillman’s personal assistant, as the current treasurer for Citizens for Dorothy Tillman and secretary of the board of Tobacco Road.

“First off, they need to have a policy and then disclose any conflicts of interest board members or senior management might have with other organizations that have an operational relationship with the non-profit group. It would appear from their financial filings that the non-profit has not done that,” Borochoff said.

The “Bring It On Home to Me Roots Festival,” held every summer at the intersection of 47th Street and King Drive, was co-sponsored in 2004 by Ald. Dorothy Tillman’s office and Tobacco Road Inc.

David Morrison, deputy director for the Illinois Campaign for Political Reform, said Tobacco Road’s leadership gives the appearance it violated federal tax laws by not disclosing its relationship with for-profit organizations, such as Spoken Word CafÈ, to the IRS. “The crux of the matter here is if and how federal authorities deal with this. At the very least, you’d think this would draw some IRS scrutiny,” Morrison said.

Tillman’s son and former Tobacco Road board member Bemaji Tillman is the founder of the House of Twang band. The band occasionally performed at Spoken Word, the HWCC and the Roots Festival. Ticketmaster sold tickets at $40 each for at least one performance by the House of Twang at the cultural center on April 14, 2005.

Another ticket agent affiliated with the center, The Urban Theatrical Group, is listed with a Chicago and Indiana telephone number and a Gary, Ind. mailing address. According to both the Illinois and Indiana secretary of state’s offices, The Urban Theatrical Group is not licensed to do business in either state.

Conflicts of interest

An investigation of public records by the Lakefront Outlook revealed the following apparent conflicts of interest:

• An assistant to the alderman is apparently connected to the valet service provider for Spoken Word and the Harold Washington Cultural Center.

• Tillman’s former chief of staff is a former Tobacco Road board member who Illinois State Board of Elections records show was the treasurer and chairman of Citizens for Dorothy Tillman in 2003 and 2006, respectively.

• Another daughter of Tillman’s is the special events coordinator for the alderman’s office and the educational coordinator for the HWCC.

Noted in promotional materials for the HWCC is that valet service for Spoken Word and the HWCC is provided exclusively by SAQ Valet Parking Service Inc. The Illinois Secretary of State records show SAQ is licensed to Shamona Ambrose at 6902 S. Michigan Ave. The contact telephone number for SAQ is a cellular phone number that was answered last week by Qwin Dixon, an assistant to the alderman. The Lakefront Outlook was told by Dixon to mail requests for valet services to 6902 S. Michigan Ave.

City records show Tillman requested and received a zoning ordinance to designate a loading zone for SAQ in front of Spoken Word and the 3rd Ward office.

Records obtained from the City Department of Consumer Affairs by the Lakefront Outlook under the Illinois Freedom of Information Act show the city currently licenses 48 companies to provide valet services. City law requires valet providers maintain a minimum of $700,000 in insurance coverage. Records show that SAQ’s insurance expired June 30, 2006. As of Dec. 19, the city still had no insurance form on file.

The records show that SAQ was insured for $500,000 to operate its valet business from June 2004 to June 30, 2006. Bill McCaffrey, spokesman for the department, could not explain why SAQ is still operating and licensed by the city to run a valet parking business without proof of current insurance.

Brenda Ramsey notarized the SAQ license application in 2005.

Dixon declined to comment on his role with SAQ.

SAQ also has office space in the building housing Sammie Parr’s Alert Up II Parr security firm. Parr, a Chicago police officer, is Tillman’s former volunteer bodyguard. The security firm provided services at the Harold Washington Cultural Center in September.

Qwin Dixon and Sammie Parr are employed by the city. City documents show that Dixon is paid $56,352 yearly. Parr’s income was not disclosed. By city law, municipal employees must disclose any sources of income from outside employment.

The city’s human resources department did not have a Dual Employment Form on file for Dixon as of Dec. 19. Parr is not required to disclose additional income according to the police’s collective bargaining agreement.

Robin Brown, a former Tobacco Road board member, was also Tillman’s chief of staff during the 2003 aldermanic election year.

While Gimel Tillman, one of the alderman’s daughters, is the alderman’s special events coordinator and the HWCC’s educational coordinator, she is not a current or former Tobacco Road board member.

Ald. Tillman, Jimalita Tillman and Brenda Ramsey declined to comment and did not comply with verbal and written requests from the Lakefront Outlook to review financial documents for Tobacco Road Inc. and the Harold Washington Cultural Center.

Exempt organizations, according to the IRS, “must make available for public inspection certain annual returns and applications for exemption, and must provide copies of such returns and applications to individuals who request them. Copies usually must be provided immediately in the case of in-person requests, and within 30 days in the case of written requests.”

“What’s really outrageous here is that they have failed to let the public know of these conflicts,” said Brian Imus, director of the Chicago-based Illinois Public Interest Research Group. “These are simple ethical requirements here, and the voters deserved to be informed of any conflicts of interest involving their elected officials, their family and their supporters of elected officials.”

Long-standing tradition

Getting relatives on the public payroll and rallying for them to snag key jobs in the private sector has been a long-time Chicago political tradition.

Former Cook County Board President John Stroger Jr. lobbied for his son Todd to succeed him. The elder Stroger was sidelined from a massive stroke he suffered in March. Ald. Darcel Beavers (7th) was appointed to succeed her father, Commissioner William Beavers.

Aldermen are allotted to staff their ward offices with three people at their discretion. Their picks are added to the city’s payroll. Tillman is no exception to the rule.

Tillman’s daughter, Ebony Tillman, is paid $51,048 yearly by the city to be one of the alderman’s assistants, documents show. Ebony Tillman does not work for the Spoken Word CafÈ or the Harold Washington Cultural Center.

k.chaney@hpherald.com

The Illinois Auditor General has asked state investigators to probe the alleged misappropriation of Illinois Department of Transportation funds including more than $25,000 diverted to the 3rd Ward office at 4645 S. King Dr.

Auditor General William G. Holland has forwarded a 140-page audit of IDOT spending for 2004 that includes expenditures for promotional items shipped to 3rd Ward Ald. Dorothy Tillman’s office. The audit shows that at least $14,000 of this money was used for Bronzeville’s largest festival, the Bring It On Home to Me Roots Festival, which is annually co-produced by 3rd Ward Ald. Dorothy Tillman and Tobacco Road Inc., the non-profit that operates the Harold Washington Cultural Center.

Attorney General Lisa Madigan has received the audit and Holland’s request in June, said Madigan’s spokeswoman Cara Smith. Smith cited office policy in declining to say whether the agency has begun an investigation or to determine if the audit’s findings are without merit.

State investigative records obtained by the Lakefront Outlook show that 1,080 custom tattoos, costing $151.21, were shipped to Tillman’s office on July 16, 2004 from Danielle Ashley Communications, the public relations firm that contracted with IDOT for an awareness campaign involving the Dan Ryan Expressway reconstruction project.

Other expenditures that the state auditor’s office deemed questionable or inappropriate include at least $2,600 spent for a Bud Billiken Parade float, nearly $424 for 15 custom made T-shirts emblazoned with “The Mad Hatter” logos for the July 17, 2004 Bring It On Home to Me Roots Festival and $300 in cash disbursements to workers at the 2004 Roots Festival. Danielle Ashley also billed the state $10,617 for event management related to the Roots Festival, auditor’s records show. And $220.53 was spent on unspecified promotional materials.

IDOT spokesman Mike Claffey said the parade float, T-shirts and tattoos were promotional items meant to inform people about the Dan Ryan reconstruction project. “This was part of IDOT’s overall community outreach efforts,” Claffey said. The money spent, he said, was “well worth it.”

A Danielle Ashley representative has not returned telephone messages left at the firm’s office seeking comment on their billings.

A government watchdog group and the president of a minority contractors association say they are troubled by the apparent diversion of state tax dollars to an event sponsored by Ald. Tillman and the non-profit group operated by the alderman’s family, political supporters and friends.

“IDOT and T-shirts are two things that should not meet,” said Jay E. Stewart, executive director of the Better Government Association. “An audit in itself is not the end of the world. That is, as opposed to the misapplication of public funds. That’s what is troubling.” Stewart said that money intended for community outreach should never have ended up where it did.

Omar Shareef, the African-American Contractors Association president, has repeatedly demanded that IDOT employ more black contractors. He was mystified when he learned that IDOT money given to the 3rd Ward office was used for promotional items at the Roots Festival.

“That is such a crazy, irresponsible thing,” said Shareef, who has been the Chicago chapter president of AACA since 1989. “[IDOT] should know how to allocate funds that they were responsible for giving out.”

Auditor General Holland annually reviews several state agencies like IDOT.

Erin Meyer contributed to this report.

Two of the alderman’s potential challengers held press conferences Dec. 13 alleging Ald. Dorothy Tillman (3rd) put a bevy of family and friends in management positions at the Harold Washington Cultural Center and used it for her own political gain.

Outside city council chambers that day, Tillman responded about published reports in the Lakefront Outlook (Dec. 13 issue) that the HWCC faced financial difficulties during its first operating year.

“The center is not losing money. Everybody is proud of our center. The Harold Washington Cultural Center is one of the most beautiful buildings in the black community. We have people from across the country come to look at the building,” Tillman told reporters.

Famed blues performer, Otis Clay, president of Tobacco Road, Inc., the non-profit that manages the cultural center, defended the center’s fiscal state and management on WTTW/Channel 11’s “Chicago Tonight” program, “I understand that someone said it is operating in the red. It is not.” Tillman questioned the motives of her potential opponents and said they did not believe the center would open and flourish. “Four years ago, Mell Monroe was Pat Dowell’s campaign treasurer. They stood in front of the Harold Washington Cultural Center and said this center would not be built,” Tillman said.

Tillman said Monroe and Dowell should find their own footing because they have nothing to build on. “They don’t have a program, so what do you do, you tear down. Tell me your program. Give us some evidence. Don’t make accusations, give your evidence and tell us what you would do if you were alderman.”

When asked about her daughter’s, Jimalita Tillman, position at the cultural center as the executive director and profiting from the center, she countered and said her daughter chose to take the lesser paying job instead of accepting other higher paying offers that came her way after graduating from DePaul University. “I’m very proud of my daughter. She’s doing a wonderful job at the Harold Washington Cultural Center,” she said.

Clay also lauded Jimalita Tillman for a job well done. “It was my suggestion that she become the director, not the alderman. I take responsibility for that. I followed Jimalita all through her academics. She is very sharp. She is well qualified,” he said.

When one reporter told Tillman that Monroe said she could be classified as a “crook,” she responded, “I think what Mell Monroe needs to do is stop letting his wife take care of him and go get a job.”