Inside Bill Daley's Insurance Exam Scandal: Chicago Mayor Candidate Faces Scrutiny
By Todd Lighty
Bill Daley has passed the bar to practice law and cleared security checks to work in the White House. But when he tried to pass the state exam to sell insurance in Illinois as a young man, he faced failure, scandal and embarrassment.
First, the youngest son of Mayor Richard J. Daley flunked. And when he passed on his second try, in 1973, the validity of the insurance test later was questioned amid allegations he received inside help.
The evidence? An expert handwriting analysis and different inks pointed to two people filling in test answers. And then there was the colorful and damning account of the state employee who had administered the insurance tests and taken them home over the weekend.
The worker described being paid a Sunday visit by Robert Wills, a recently fired colleague who took a particular interest in Bill Daley's test. As the two drank beer, Wills noticed that Daley had not answered several questions.
Wills, the worker testified, had a request: "I'd like to do a favor for a friend of mine and fill them in."
That friend, according to court records, was a close ally of the mayor. Bill Daley, who was not charged with wrongdoing, denied any involvement and kept his insurance license.
Today, Daley is campaigning for mayor as a reformer, putting forth several good-government proposals and criticizing an entrenched political culture that he says can breed corruption. He's pitching that message even as opponents say that his father and brother helped foster that very system.
Daley's campaign declined to make him available for an interview. "Bill Daley has been vetted multiple times at the highest level of government and has been given a top security clearance," campaign spokesman Peter Cunningham said in a statement. "At a time when Chicago is facing serious issues around crime, taxes, education and the city's future, the Tribune's focus on ancient history is irrelevant."
Until now, the 70-year-old Daley always has campaigned for or advised other politicians, including his brother, former Mayor Richard M. Daley. After several flirtations with running for office, Bill Daley has put himself out there for the first time -- and drawn the scrutiny that comes with it.
His resume includes accomplishments in the world of business and government; he was commerce secretary for President Bill Clinton and chief of staff for President Barack Obama. But Daley also has been linked to controversies involving his insider status.
During a 2006 federal trial on hiring fraud inside the mayor's office, Bill Daley was listed as sponsoring four people on a once-secret clout list of those who were seeking positions and promotions in his brother's City Hall. Many of the people on that list had done political work for the then-mighty Hispanic Democratic Organization, which worked to elect Mayor Daley's political allies and punish his enemies. Later, evidence at a 2009 federal corruption trial linked Bill Daley to the creation and rise of HDO.
Beyond Chicago, Daley's name surfaced in the business world as part of a scandal involving JPMorgan Chase and other banks giving coveted jobs to relatives and friends of Chinese government officials. Daley was an executive at JPMorgan.
The Wall Street Journal, citing internal bank emails, reported in 2015 that JPMorgan, at Daley's suggestion, hired the son of a Chinese commerce minister even though the son was unqualified for the position.
The following year, the bank agreed to pay more than $264 million in sanctions, including a $72 million fine, for "its role in a scheme to corruptly gain advantages in winning bank deals by awarding prestigious jobs to relatives and friends of Chinese government officials," according to the U.S. Securities and Exchange Commission. Daley was not accused of any wrongdoing.
But it's his family's legacy in Chicago that Daley has found himself defending during the campaign. It's the 14th time a Daley has run for mayor in the last 19 elections. Mayoral candidate LaShawn Ford, a state lawmaker, pressed Daley to acknowledge he's benefited from the "family business."
"I'm not ashamed of anything about my family, no question about it," Daley said during an endorsement session before the Chicago Tribune editorial board. "I'm very proud of my family. And, I'm proud of what I've done as a person in my life, my professional life and my personal life."
The story of Bill Daley finally passing his insurance exam involved political grudges, paybacks and old-fashioned Illinois chicanery. The Tribune pieced together the long-forgotten tale based on interviews, old newspaper stories and court records, including grand jury testimony of the state worker who was accused of fixing the test and another who said he looked on as his friend did it.
The Daleys entry into the insurance business began in 1971, when John Daley got his license and went to work for an Evanston company. Mayor Daley steered millions of dollars in city insurance business to the firm, and John Daley received more than $100,000 in commissions. The mayor defended his actions, famously telling his critics, "If I can't help my sons, then they can kiss my ass."
Bill Daley first took the state insurance exam in July 1972 but failed. He took the test again in March 1973 and received a passing grade. That summer, Bill and John Daley set up shop as Daley & Daley Insurance in Bridgeport, at the time an Irish neighborhood that had been home to the Daley family for decades.
Around that time, then-Gov. Dan Walker was feuding with Mayor Daley after having defeated the party's favored candidate, Paul Simon, in the 1972 Democratic primary. When Walker took office, his aides pulled the Daley brothers' insurance exams and said they discovered irregularities.
"A clout system for issuing professional licenses cannot and will not be tolerated," Walker told reporters. "Enough is enough. It is perfectly natural for a father to help a son along in business, but not at taxpayers' expense."
Ronald Stackler was Walker's assistant director of insurance. "I'd been around Chicago long enough to know this stuff goes on," he said in a recent interview. "The fix was in. It didn't appear to us that they took the exam seriously. It was like they knew they were going to pass."
Stackler, now 81 and living in California, said he remembers the controversy well, even all these years later. To this day, he keeps a framed copy of a 1975 Chicago Tribune editorial headlined "Stackler wins, Daley loses" about how Mayor Daley unsuccessfully tried to retaliate against him.
For their part, the Daleys said they knew nothing about any alleged improprieties. The accusations, they said, were politically motivated by Walker and others.
John Daley told reporters he passed the test. When reporters tried to question Bill Daley, according to news accounts, John cut them off and answered for his younger brother: "It's the same with him; he took the test and passed it." Bill Daley repeated several times, "It's not fair."
In March 1974, Republican Cook County State's Attorney Bernard Carey convened a grand jury to investigate insurance department licensing procedures and focused on the Daley brothers' tests. (Carey has since died.)
Bill Daley's exam drew attention, in part because his answers were written in two different inks and appeared to have different handwriting.
Prosecutors called in experts from the U.S. Department of Treasury's document section to examine the ink and handwriting. They concluded that in addition to Bill Daley's penmanship, there also was writing on the test by Wills, a former feed grain salesman who had landed a job in the state's insurance department in 1969.
Daley had left six questions blank which Wills filled in with the correct answers, according to a report from the handwriting experts to Cook County prosecutors. Those included questions on topics about contractual liability, fire liability insurance, and loss payable. In addition, the experts found that Wills changed another of Daley's wrong answers to the correct one. The changes bumped Daley's failing test score of 55 to 75, state records showed.
Nicholas Iavarone was the Cook County prosecutor who investigated the test-fixing allegations. Some handwriting was "slanted to the left," and some "slanted to the right and was straight up," Iavarone recalled recently about the test penmanship.
Iavarone summoned Wills to appear before the grand jury. Wills told Iavarone that he had no experience in the insurance business before being hired, and suggested that he may have inadvertently misgraded test papers.
"Now, I wasn't the only one that didn't have no prior insurance experience and I am sure that I am not the only one that put a paper out that the man had failed and he passed it," Wills said.
Wills testified that he never changed an answer or filled in the blanks on anyone's test.
In June 1974, the grand jury indicted Wills on perjury charges for lying about tampering with Bill Daley's test.
Wills' friend and former co-worker, Gordon Casper, was given immunity from prosecution. Casper, who has since died, became the state's key witness and laid out for prosecutors what he said happened in his kitchen late one Sunday morning.
Casper had administered the insurance broker's test in Chicago on a Friday in March 1973, and took the exams back to his Springfield apartment. Among those taking the test was Bill Daley. Casper said that Sunday, he received a call from Wills asking if he could stop by. Casper said yes, and testified what happened next.
Wills asked to look over Daley's exam, but showed no interest in the tests of the 140 or so other people who also had taken it.
"So, (Wills) looked at the paper and said, 'Well, several questions (Daley) didn't answer. I'd like to do a favor for a friend of mine and fill them in,' " Casper said under oath.
That friend was the late Cecil Partee, then a state senator and a political ally and confidant of Daley's father, Mayor Richard J. Daley.
Wills had recently been fired from the insurance department stemming from the test scandal, a point that would prove crucial later on.
Wills was talking to Partee about getting another job in state government, Casper said. Wills "more or less promised he'd do what he could do" for Daley's exam, testified Casper.
Casper and Wills drank a beer in the kitchen as Wills filled in answers on the test for the next 20 to 35 minutes. Wills later told Partee "it was all taken care of," Casper said.
Partee acknowledged to reporters that he got Wills another, higher-paying job in state government a short time later. Partee declined to answer prosecutors' questions at the time.
When Wills went to trial later in 1974, the prosecution's first witness was Bill Daley.
Prosecutors asked Daley if he left any answers blank on his test. "I don't recall," he replied. When they asked if the handwriting in the disputed answers was his, Daley replied, "It may or may not be. I can't be sure," according to news accounts of his trial testimony. "I'm not an expert. I can't be sure."
Wills, who has since died, did not testify. A judge convicted Wills of perjury for lying to the grand jury, and sentenced him to four years of probation.
The guilty verdict was thrown out, however. An appeals court noted that Wills told the grand jury he never filled in blanks or changed answers on anyone's exams "while he was employed" with the state's insurance department. That, the court found, was literally true.
Wills had been fired and was no longer employed by the state when Daley's test was altered.
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