Federal authorities are conducting a criminal investigation into a clout-heavy company that’s a major player in Chicago Mayor Rahm Emanuel’s highly touted expansion of concessions at Midway Airport, according to documents obtained by WBEZ.
John Lausch, the U.S. attorney in Chicago, sent a grand jury subpoena to the Chicago Transit Authority on June 7 for an array of records pertaining to a local company called NorthAmerican Concessions Inc.
The company’s owner is Deven Rand – whose politically connected father, Timothy, long had brought in tens of millions of dollars a year from concessions at Midway.
The CTA has certified NorthAmerican as an “Airport Concessions Disadvantaged Business Enterprise,” or ACDBE. That gives the company preferential status in landing work at the airport.
In his letter to the CTA, Lausch asked the agency to send “any and all” documents regarding NorthAmerican to the FBI’s Chicago office by June 28.
“The accompanying federal grand jury subpoena seeks records pursuant to an official criminal investigation,” Lausch wrote.
Lausch asked that the CTA not disclose that it has received the subpoena. But the CTA provided WBEZ with a copy of it in response to a Freedom of Information Act request. Under Illinois’ open records law, subpoenas received by government agencies are public documents.
The federal subpoena specifically sought “all certification files” for NorthAmerican as well as any correspondences that the CTA had with the company and “all internal communications” about the firm.
Emanuel appeared at Midway on Tuesday for a ribbon-cutting event marking the opening of the new $75 million concessions at the Southwest Side airport.
NorthAmerican stands to profit from two concessions at the new food hall at Midway’s Concourse A, where Emanuel held the news conference.
The company is partnering with the owners of Arami, a sushi bar, and Woodgrain Neapolitan Pizzeria, according to Deven Rand and Sammy Patel, the chief executive of the company that won the new concession deal approved by Emanuel and aldermen last year.
Rand stood in front of Woodfire offering samples of the pizza after the news conference where Emanuel appeared with Patel and other city officials.
Rand said she could not comment on the subpoena because “I can only be responsible for what I’m directly over.”
“I apologize,” she said. “I actually have to get to work, so I don’t have time to do interviews right now.”
The spokesman for Lausch and a spokeswoman for the FBI in Chicago also declined to comment.
CTA spokesman Steve Mayberry declined to comment on the subpoena Tuesday.
A spokeswoman for Emanuel’s Department of Aviation said Tuesday that officials “validated the certifications of all of the members of the Midway Partnership” before they presented the deal for City Council approval.
The city requires that certified minority- and women-owned businesses get a percentage of contracts with Chicago.
Emanuel did not take questions after the news conference at the airport.
But the mayor proudly cut a red ribbon and sampled the food from Arami.
City officials say the Midway Partnership -- the team that won the 15-year airport concessions deal last year – will invest $75 million to bring 70 new food and retail brands to the city’s second airport by 2020. That will create 1,000 jobs, Emanuel said.
Patel, the Midway Partnership chief executive, told WBEZ he had not known about the federal investigation involving NorthAmerican. He described the company as a “key partner” in the concessions overhaul at the airport.
“That’s not something I was aware of,” Patel said of the subpoena. “All I do know is they’re a certified ACDBE operator, and we’ve gone through the process of making sure they are certified, and they’re a strong partner here for us.”
For many years, Timothy Rand was among the most successful African-American businessmen working with City Hall. His company had been the biggest player in Midway concessions before the city bid out the deal again in recent years.
Timothy Rand’s company reaped total revenues of more than $30 million at the airport in 2014, the Chicago Sun-Times has reported, and he and his companies have contributed hundreds of thousands of dollars to local political campaigns.
NorthAmerican was led by Geneva Mansaw, Timothy Rand’s stepmother, until 2016, according to state records.
But those documents show that Deven Rand replaced Mansaw as NorthAmerican’s president during the Midway concessions bidding process.
When aldermen approved the Midway Partnership deal in February 2017, then-Aviation Commissioner Ginger Evans deflected questions about NorthAmerican and Timothy Rand, saying Deven Rand was the company’s owner.
“Their certification was reviewed carefully and verified,” Evans said at the time. “We have no basis to question these certifications.”