How Oscar D’Angelo, Mayor of Little Italy and a Daley crony, got entangled in a crooked Bridgeport bank

For six decades, Oscar D’Angelo was one of Chicago’s most influential powerbrokers, a behind-the-scenes mover and shaker who had the ears of eight mayors as he reshaped his Little Italy neighborhood.

He helped mayors win support for controversial projects, such as the University of Illinois Chicago campus Mayor Richard J. Daley built after demolishing acres of homes and businesses in Little Italy.

Daley's son, Mayor Richard M. Daley, had D'Angelo's support when he leveled the Maxwell Street market two decades ago, replacing it with University Village, a development of homes and stores abutting the university and Little Italy.

D'Angelo loved doing favors, like providing free rental cars to Cook County judges and city officials, a corrupt practice that caused the Illinois Supreme Court to revoke his law license forever.

But the man who fancied himself as the "mayor of Little Italy" never lost his clout with City Hall.

D'Angelo's extensive power at City Hall has been well documented. He also had close ties to a couple of crooks who looted more than $90 million dollars from a scandal-ridden Bridgeport bank called Washington Federal Bank for Savings, the Chicago Sun-Times has found. That's documented in a trove of 230 boxes of memos, papers and records D’Angelo’s widow donated to the Richard J. Daley Library at the University of Illinois Chicago. Those files, examined by the Sun-Times, are kept alongside the files of the two Daley mayors to whom D'Angelo was so closely tied.

Those two Bridgeport bank figures were:

• John F. Gembara, the president, CEO and chairman of the bank who was found dead with a rope around his neck inside the Park Ridge bedroom of a crooked customer as federal regulators were preparing to shut the bank in December 2017.
  
• Robert M. Kowalski, an attorney, developer and Gembara’s close friend who is serving a 25-year prison sentence for embezzling more than $8 million from the bank. 

When federal regulators shut down the century-old bank with countless ties to the Daley family and its political organization, they were left with a long list of clout-heavy customers who had been skipping their loan payments for years. D'Angelo, who died in 2016 a year before the bank closed, was on that list of deadbeats.

D’Angelo and Kowalski were mixed up in a deal 25 years ago to sell a Little Italy three-flat to Patrick R. Daley, though his father, Mayor Richard M. Daley, reportedly squelched the sale after D’Angelo arranged for government-owned equipment to rehab the building. Kowalski has told the Sun-Times that Gembara planned to finance the deal for the mayor’s son.

D’Angelo’s records reveal how he used his political influence to help expand Gembara’s bank. The institution loaned millions of dollars to city workers who were part of the Daley family’s 11th Ward Regular Democratic Organization that has ruled the Bridgeport neighborhood for decades. Those records also show that D'Angelo relied upon Kowalski to build and rehab homes and businesses in Little Italy.

With Patrick Daley, a father-son kind of relationship

Patrick Daley is repeatedly referenced in D’Angelo’s files, including a failed proposal for him to team up with restaurant impresario Jerry Kleiner to open a dining establishment on Taylor Street. Kleiner says he never attempted to work with the mayor’s son, although he did try to open in a restaurant in a building Kowalski owned while he was rehabbing the building for Daley's son.

Patrick Daley, who reportedly had a “father-son” relationship with D’Angelo, didn’t return messages to discuss his failed real estate deal with D’Angelo, Kowalski and Gembara.

Federal investigators examined the Daley family’s connections to Gembara’s bank, according to sources familiar to the probe, which led to criminal charges against then-Ald. Patrick Daley Thompson, a grandson and nephew of the Daley mayors. Thompson had to resign his City Council seat, and went to prison for tax fraud and lying to federal agents about the money he personally owed the bank.

A few weeks before the bank failed, Thompson also secured a loan from Gembara to repair the family’s 11th Ward Democratic headquarters at 3659 S. Halsted St.

Overall, 16 people were charged following the bank collapse, including William Mahon, a bank board member who also worked as a top city official while he was a member of the Daley’s political organization.

D’Angelo’s records shed no light on a $100,000 loan he received from Gembara in 2013, promising to repay the money in five years. He made few payments before he died three years later, leaving an unpaid balance of $93,515 on the bank’s books for regulators to collect, according to federal records from Kowalski’s criminal trial.

It’s unclear if D’Angelo’s loan was ever repaid by his estate. His widow couldn’t be reached for comment.

The Federal Deposit Insurance Corp. spent some $140 million covering the losses for the bank’s customers. Some of those customers, however, didn’t get back all of their money because their deposits exceeded the FDIC’s insurance limit of $250,000.

D’Angelo, Burke’s daughter and the storm door tiff

Born to Italian immigrants, D’Angelo was a young attorney in 1960 when he backed Mayor Daley’s controversial plan to bulldoze part of Little Italy and build a campus for the University of Illinois, which had been teaching students on Navy Pier.

D’Angelo spent the rest of his life rebuilding his neighborhood, luring the National Italian American Sports Hall of Fame, businesses and restaurants, while trying to persuade folks to move back to the old neighborhood, all documented in his extensive files.

He was beloved by many, and despised by others who were offended by his heavy-handed tactics, wielding his clout to dictate his visions including the colors people painted their homes.

D’Angelo didn’t seem to care whom he offended. That's reflected in letters he exchanged in 1999 with attorneys Jennifer Burke and James Murphy — the daughter and son-in-law of Edward M. Burke, then Chicago’s most powerful alderman, and his wife, Anne, then an Illinois Appellate Court judge.

In 1999, Burke's daughter and husband drew D'Angelo's attention when they installed a new security door at their home in Little Italy.

“I have noticed that you have had a new storm/security door installed in your home," D'Angelo wrote. "Far be it for me to dictate aesthetics of private property; however, it would appear that the doors [of two neighboring homes] are very aesthetically attractive.

“If you are of a mind to change the door to conform with your neighbors’ doors, I would be willing to pay for one-half of the installation. . . . I hope you accept this suggestion in the same Christian manner in which I offer it,” according to the letter he signed with his familiar “O” on June 16, 1999. He sent a copy to Ed Burke.

D’Angelo got a response two weeks later.

“We appreciate the countless hours you have spent over your lifetime making this a wonderful neighborhood. . . . Our sole motivation for installing the exterior door was security. . . . The doors you admire on my neighbors’ homes do not meet these safety criteria. I will not sacrifice the safety of my family for your opinion of improved aesthetics. Accordingly, we will not change the door and we respectfully refuse your offer to help replace it.

“I suspect that your true motivation is that you do not want visitors to think that a security door is necessary in the neighborhood. . . . Furthermore, we do not share your opinion that each home on our block should look the same. . . . If we wanted to live in a row of identical cookie-cutter houses, we would have moved to the suburbs.”

D’Angelo scrawled a response across the bottom of the couple’s letter:

“Jennifer, Had I known that my somewhat 'innocuous’ note to you and Jim would have been received so offensively . . . I would have sent it nonetheless. Jennifer, please keep in mind that had I not for the past 40 years been so attentive to the whole range of issues that make a real neighborhood — you and Jim would not have elected our neighborhood to live and raise your family.”

D’Angelo sent a copy of his response to Jennifer’s parents with a brief note: “Ed and Anne — We should run Jennifer for alderman in 3 1/2 years. She’s got just the right `spunk.’ Love, O.”

Scandals in D’Angelo’s history

Over the years, D’Angelo was the center of a few scandals that impacted his reputation along with his livelihood, but he never lost his clout with City Hall.

In the fallout from the federal investigation into corruption in the Cook County courts known as Operation Greylord, the Illinois Supreme Court revoked D’Angelo’s law license in 1989 because he was paying the rental car bills for some Cook County judges and city officials.

Two more scandals erupted in 2000. One involved a Chicago Tribune investigation that found D’Angelo gave $10,500 in interest free-loans to Daley’s first deputy chief of staff Terry Teele, who resigned, and his brother. The Sun-Times then revealed that D’Angelo collected a $480,000 fee as an unregistered lobbyist who helped two close friends of Daley’s wife get a stake in a newsstand contract at O’Hare Airport.

D’Angelo’s lucrative fee sparked an FBI investigation, which ended without any criminal charges.

“Presently, D’Angelo `works’ to facilitate business deals between contracting companies and the city of Chicago,” according to D’Angelo’s FBI file. “He substantially influences many business decisions at O’Hare Airport and has made a great deal of money over the past several years.”

The FBI file quotes a 1996 letter D’Angelo sent to the newsstand operators: “I am most pleased to receive your check in the amount of $480,000 — my father probably never earned that sum in 20 years! Hopefully, our joint efforts will lead to a very successful venture over the course of the years.”

As federal agents investigated D’Angelo, his papers show he was doing business with Kowalski and Gembara, but the redacted FBI file makes no mention of those relationships, which would lead to another federal investigation years later.

Back in the early 1990s, Kowalski was in his early 30s, building homes in Bridgeport financed by loans that were approved by Gembara, then a vice president at the bank run by his father.

D’Angelo met Kowalski in the fall of 1993 when Kowalski bought property in the 1500 block of West Polk Street to build a home so he could move his family from Downers Grove. Gembara’s bank financed the construction.

“I enjoyed meeting you on Saturday,” D’Angelo wrote Kowalski on Nov. 16, 1993. “We agreed that you shall not use cement block on any of the exterior facades. . . . Bob, let's do something special together.”

Their relationship flourished. D’Angelo helped Kowalski buy a sliver of land from the Chicago Park District to expand his yard. Kowalski began doing construction projects in Little Italy, and he and his wife Martha Padilla served on committees with D’Angelo’s wife, Paula, to help restore a couple of neighborhood churches. D’Angelo and his wife became godparents to Kowalski’s son.

“Oscar loved people who cared about the community,” said former Ald. Ted Mazola, a realtor who represented the Little Italy neighborhood in the City Council. “Bob passed himself off as a builder. Oscar was happy to help anyone who moved into the community.”

A rehab for Daley’s son

After city inspectors found 22 building code violations at a three-flat a few doors east of Little Italy’s popular restaurant Tufano’s Vernon Park Tap, Kowalski bought the property for $200,000 in 1997 from a trust connected to Charles D’Angelo, a doctor at Rush University Medical Center. It’s unclear if the doctor, who has since died, was related to Oscar D’Angelo.

D’Angelo encouraged Kowalski to fix up the property and sell it to Mayor Daley’s son, Patrick, who was in his early 20s and living in an apartment D’Angelo owned. Gembara, according to Kowalski, was going to loan money to the mayor’s son to buy the property.

The deal fell apart in the fall of 1999 after neighbors complained that a hydraulic lift owned by the University of Illinois was being used to help rehab the property. Patrick Daley canceled his contract with Kowalski, who converted the property into three condos with the top floor selling for $500,000, according to a memo D’Angelo’s assistant forwarded to the mayor’s son a few months after he walked away from the project.

As Kowalski was rehabbing the three-flat for Patrick Daley, D’Angelo had been helping Gembara, who was having difficulty buying a neighboring property to expand the bank to add a drive-through at 2869 S. Archer Ave.

“It was of course helpful Bob who made the introduction” between D’Angelo and Gembara, according to an email Kowalski sent the Sun-Times from the federal prison in Thomson, Ill. “The bank needed a driveway permit on Bonfield Avenue to make its new facility plan work. This was, however, hotly contested by a neighborhood group."

The crooked banker reaches out to D’Angelo

Gembara sought D’Angelo’s help in February 1999 after making an offer to pay Josephine Chmura $65,000 for her two-flat next door to the bank, according to D’Angelo’s files. That offer was rejected. The letter says Chmura and her son deferred to a Daley precinct captain, Wayne Garrity, who had “instilled in their minds” that the property was worth $200,000.

After Kowalski sought City Hall’s permission for the bank’s drive-through facility, D’Angelo wrote a letter seeking support from then-Ald. James Balcer, who opposed the drive-through over the neighbors’ traffic concerns.

D’Angelo then appealed to Tim Degnan, a former top aide to Mayor Daley. “Balcer reneged and now opposes even the establishment of the drive-in . . . after two years of discussion. Please advise.”

Two years later, Gembara and his bank gave Chmura a $91,000 mortgage on her two-flat. Eight weeks after that, Chmura sold the property to the bank for $120,000, according to records filed with Cook County Clerk. It’s unclear if she ever repaid the mortgage. Chmura has since died.

Gembara hired Kowalski’s brother, William, to demolish the two-flat in 2001, making way for a drive-through on Archer. In May 2004, Gembara opened the bank’s first branch office inside a residential and commercial building the Kowalski brothers built across the street from the National Italian American Sports Hall of Fame with D’Angelo’s help.

Both bank expansions came while federal prosecutors say Gembara and Kowalski were part of the scheme that looted more than $140 million from Washington Federal Bank for Savings.

D’Angelo was 81 years old when he got the $100,000 loan from Gembara’s bank on Oct. 4, 2013. But D’Angelo never repaid the loan. He died from cancer in August 2016, and federal regulators closed the bank in December 2017, when D’Angelo’s loan balance remained $93,515.

In a 1991 Chicago Sun-Times profile, D'Angelo reflected on the power he amassed as he tried to revive Little Italy, the neighborhood he treated as his fiefdom. "I decided I want to be a dictator, I want to be an anarchist, I want to be a tyrant — hopefully for the good."