Mayor Michael A. Bilandic's political future appears to be at stake in bitter controversy with a top aide who has charged that Bilandic "greased" the way for an unnecessary cab fare increase in a conspiracy in which he advised the cab companies to alter their financial statements.
The 11-month-old administration is reeling from newspaper headlines and aftendant public uproar prompted by allegations contained in a memo written by Jane Byrne, city commissioner of consumer sales and public vehicle licenses.
Byrne, 43, a protege of the late Mayor Richard A. Daley and the only woman in Bilandic's cabinet, has given federal investigators the eight-page notarized memo she wrote June 19, six days after the Bilandic-controlled City Council approved an 11.7 per cent fare increase requested by two big Chicago cab firms.
As a result of the memo, U.S. Attorney Thomas P. Sullivan reportedly is preparing subpoenas to be issued next week for Bilandic, 48, and five members of his administration.
The memo, which spins an intriguing tale of secret meetings between city officials and the cab companies directly leading to the fare increase, charges that Bilandic told Byrne not to talk about an independent audit that indicated the increase was not justified.
"I believe the entire action was fraudulent and conspiratorial" and [the increase] should not have been granted," Byrne's memo said.
A visibly shaken Bilandic responded that the memo is "self-serving" and "absolutely erroneous." He said the fare increase was necessary to avert a threatened strike by the cab drivers.
The increase was granted on the bascis of appeals from Checker Taxi Co. and Yellow Cab Co. part of the Checker Motors of combine of Kacamazoo, Mich., that controls 80 per cent of Chicago's 5,000 cabs.
Byrne's memo says that she was "shocked" when Edward R. Vrdolyak, a lawyer and powerful Bilandic ally in the City Council, approached her in mid-1976 on behalf of Checker and Yellow. Vrdolyak, the memo continues, showed her a letter written by David Markin, president of Checker Motors to Don H. Reuben, a well-known Chicago lawyer who represents Checkers Chicago taxi firms, asking that Reuben find a "middle-man in the administration."
Byrne said she didn't ask Vrdolyak if he had accepted that role, but he asked her if he could bring cab officials to her office to discuss the fare increase. She said she told Vrdolyak they didn't need a middleman but she would see them if they made an appointment.
When she told Mayor Daley, then still alive, about Vrdolyak's efforts to help the cab company, the memo says, Daley became angry and told her not to get "set up like that." Daley became so "disgusted" that he later introduced an ordinance giving her more control over the cab companies, the memo adds. The ordinance was adopted last Dec. 20, the day Daley died. Bilandic was installed as acting mayor on Dec. 28, 1976.
On June 8, 1977, the day after Bilandic was elected mayor in his own right, Byrne said she and three other cabinet members were summoned to his office and then whisked by limousine to Midway airport for a meeting with "Vrdolyak's people" - Checker Taxi prsident Jerry Feldman and Lanter Reuben.
But Reuben didn't show up, the memo continues and Bilandic commented that his absence was unfortunate "because he was good at making a presentable package with figures."
Byrne said she told Bilandic he should be cautious because the report of the independent audit the city had commissioned indicated the rate increase wasn't justified. But she said Bilandic ignored her and instructed Feldman to prepare a presentation for the city Council using figures approved by Reuben.
As they left Midway, Byrne said Bilandic told her, 'I don't think I would say anymore about that report. After all, how do we know what standards they used?"
The memo said, "I knew immediately from the statement that the increase was greased."
When Byrne returned to her office, the memo goes on, she received a telephone call from Checker's Feldman, whom she quoted as saying, "I got what Mike meant about getting my figures to look good."
Several days later Bilandic was mediating a contract dispute between the company and the drivers and opened the meeting by saying. "I think it is established that to provide quality service there would have to be a rate increase."
he added, according to Byrne, "We can have the committee called up pass it in committee, presented to the full council, place it on defer and publish to avoid any discussion."
When Feldman complained that the council's meeting schedule was such that the increase would be delayed until August, Bryne's memo says Bilandic replied:
"Not necessarily. I can call an emergency meeting the following week. Oh, we won't make the rate increase the reason for the council meeting. We'll blow up some other matter to look important and quietly tack the increase on in unfinished business. That's how it's done."
And that is how Byrne contends the increase was hurried into effect on June 13.