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Strip club consultant runs for Cicero office

Published: Tuesday, Dec. 11, 2012 9:26 a.m. CDT

(Continued from Page 4)

(MCT) — For years, political consultant David Donahue collected $1,500 a week from a booming suburban strip club that he helped create.

Now Donahue wants Cicero voters to elect him to the post of town collector — where he would help oversee more than $100 million in local taxes and fees.

To win, Donahue is leaning on political advice from Betty Loren-Maltese, the former town president who went to prison over a mob-linked insurance scheme that bilked taxpayers of millions of dollars.

"She is a valuable source of information," Donahue said of Loren-Maltese in a recent interview outside his Cicero apartment along bustling Cermak Road.

Even in this hardscrabble town legendary for colorful politicians, Donahue's run for public office represents one of the more baggage-heavy candidacies in suburban politics. Court records show that the strip club he helped start, Polekatz in Bridgeview, was bankrolled and run, in part, by felons.

Loren-Maltese, meanwhile, works as a consultant to Donahue, a reversal from when he was one of her top aides in Cicero. She continues to maintain that she is innocent.

The former town president — who said she consults with Donahue on real estate and politics — said she believes he would bring integrity to the collector's office, though she stopped short of giving an official endorsement.

"I mean, he's certainly qualified with his college (education) and all," she said in a telephone interview. "And let's face it: If you want things to work in a municipality, you have to have a relationship with state and even federal officials to get things done. He has a good reputation with people that can really help the town."

Donahue and Sharon Starzyk, the former head of Cicero's Animal Welfare Department, are facing incumbent Fran Reitz on the local ballot Feb. 26. Through a spokesman, Reitz declined to comment.

Starzyk, who sued Cicero and town President Larry Dominick for alleged sexual harassment and wrongful termination, settled her case last year. In the settlement, the town denies any wrongdoing.

"I want to make the town like it was when I was a kid — a safe place to live with good schools," she said.

Donahue is presenting himself to voters as a reformer fighting the current administration in the near west suburb of 84,000 that has been a case study in corruption and bare-knuckle politics since it was controlled by Al Capone in the 1920s.

Donahue hopes voters will concentrate on his decades of political work instead of his recent years in the strip club business. He said he will reduce towing fees and eliminate waste.

"No matter what you do, it is going to say 'Polekatz' in the headlines so it doesn't really matter. I mean, in terms of the media," Donahue said.

Though voters may be just getting to know him, Donahue has been a backroom player in suburban politics for years, advising mayors and candidates from Harvey to Orland Park to Cicero, up and down the ballot. Now 50, Donahue started out in the 1980s as a legislative aide to House Speaker Michael Madigan and became a protege of former Chicago Ald. Edward Vrdolyak.

In the 1990s, Donahue was hired as a top aide to Loren-Maltese, defending her as town spokesman to the media as federal investigators circled. Vrdolyak was in town too, billing millions of dollars in legal fees to the suburb as town attorney. Vrdolyak later pleaded guilty to fraud in a real estate deal unrelated to Cicero.

Donahue went on to consult for Ramiro Gonzalez, a Loren-Maltese ally picked to succeed her after her 2002 conviction. But when Dominick narrowly defeated Gonzalez three years later, Donahue's insider status in Cicero vanished.

By then, Donahue was quietly beginning his foray into the strip club business, starting with Polekatz in Bridgeview. He said he helped found the club with fellow Cicero operative Steve Reynolds. Donahue said he is now a club consultant.

Polekatz has become engulfed in controversy for employing convicts as other consultants and turning to them as lenders over the years, much of the information coming out in a lengthy court case over club control.

Illinois law generally bans felons from having an ownership interest in a liquor license. The club's listed owner, Stephen Dabrowski, has maintained he is the only owner.

One of Polektaz's early consultants, Fred Pascente, is a former Chicago police detective convicted in an insurance fraud scheme and barred from Las Vegas casinos over accusations of mob ties. Pascente has denied any organized crime ties.

Another former consultant, Demitri Stavropoulos, was brought on about a year after getting out of prison for running a multistate bookmaking ring.

Meanwhile, Donahue said he also provided seed money to start another strip club in west suburban Broadview called Chicago Joe's Tea Room. The bid to open the club sparked a five-year legal battle with Broadview that drags on to this day.

Early on, Donahue went to great lengths to hide his involvement in Polekatz. He said in a court deposition that he once created an offshore company to "shield" his interest from the public because he was afraid such associations would scare away political clients.

But in recent years, Donahue's attempts to keep a low profile in the skin business have evaporated.

A lawsuit over the ownership of Polekatz forced him to give a lengthy, detailed deposition about his club involvement in 2009, including his $1,500-a-week checks for club consulting.

In an interview with the Tribune, Donahue downplayed his strip club connections.

He said he didn't work directly with Stavropoulos and never wanted Pascente involved in Polekatz. He said Pascente was close to Reynolds, not him.

"It is almost as if, you know, if you have 10,000 people who own stock in Walgreens — even though I don't own stock in Polekatz — I can't help who else that business associates with because I don't own or control it," Donahue said.

Donahue described his work at the club these days as "keeping an eye on national and state legislative trends, keeping an eye on local ordinances." But he declined to say how much he is now paid.

Plus, Donahue said he doesn't really want to be in the business of adult entertainment. He said he plans to "flip" his interest in the Broadview club if he wins the lawsuit. And he said he would prefer to sell his options to buy into Polekatz, but he hasn't been able to strike a deal.

Contacted by the Tribune, Donahue's opponents didn't take issue with the candidate's background. Town Assessor Emilio Cundari said the incumbent team is focusing on promoting all the good they say Dominick's administration has brought residents.

Dominick's administration enters a heavily contested election with its own set of controversies. His administration has been criticized for giving plum positions to Dominick's relatives, and the town has faced numerous lawsuits under his leadership.

Donahue is hoping to leverage those issues as he campaigns. He also accuses Dominick of misusing town vehicles and employees for personal business.

A Dominick spokesman said Donahue's allegations are baseless.

If he wins, Donahue would be paid about $122,000. He said he would donate half his salary back to the community.

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