The City of Chicago has permanently barred an electrical contractor and four members of the family that runs the business from getting city work on the grounds they lied to skirt city rules meant to help companies owned by women and minorities.
Windy City Electric Co. can no longer bid for city contracts, and four McMahon family members are forbidden to work for the city in any capacity after the Procurement Department determined the company was run by two men, John and Anthony McMahon. The company claimed to be run by the duo's wives, which qualified it for preferential treatment in bidding as a women-owned business.
City Inspector General Joseph Ferguson first brought evidence of the alleged fraud to the attention of city officials last summer. The McMahons fought the accusations, but procurement officials sent a letter banning them this week, according to documents obtained by the Tribune under state open records request.
According to a procurement department report on the company, Nancy and Kathleen McMahon said they ran the business, when in fact their husbands were calling the shots.
Several years ago, John and Anthony McMahon paid an employee $50,000 to pretend to own another company they ran, Ace Mechanical Co., so it would qualify as minority-owned for city contracting purposes, according to the Procurement Department report. Ace Mechanical has since dissolved.
Windy City Electric is in the midst of a five-year, $12.8 million city contract to maintain power distribution equipment for various departments. That contract is scheduled to lapse at the end of this year, but the city will seek a replacement firm before then, according to a senior official in the city Procurement Department.
The company also has a $762,600 contract with Cook County to upgrade electrical systems in the county building. But Windy City did not claim to be women-owned in bidding for that work, so it apparently has not run afoul of county contracting rules.
Officials at Windy City Electric and an attorney for the McMahons were not available to comment Friday.
A separate investigation is underway into a contract held by the McMahon Food Corp., also owned by members of the McMahon family, to deliver milk to
Members of the McMahon family have been heavy political contributors to a number of candidates, particularly Ald.
"This administration will continue to expand opportunities for MBE and WBE companies so they grow and thrive, while rooting out the bad actors that are essentially stealing city business away from those it rightfully belongs to," Emanuel said.