Waukegan-based Joel Kennedy Constructing Corp. is fighting a ban from getting any more City of Chicago contracts after City Hall Inspector General Joseph Ferguson determined that the business had cheated to meet the city’s residency requirement for workers employed by a contractor.
Business president Joel Kennedy says the ban would put his company out of business, and is asking city officials to rescind the order, the Chicago Sun-Times reports. The company says it has “taken multiple steps to make sure we are fully compliant with residency requirements in the future.”
Kennedy says in a written statement that if he can’t persuade City Hall to drop the ban, “we intend to challenge the city’s debarment decision in court.”
City Hall’s procurement department issued the ban against Kennedy and his business on April 16 after Furguson’s office investigated and found that the contractor had submitted falsified payroll records on four city contracts.
The documents made it appear that, as a city ordinance requires, more than half of the work that Joel Kennedy Constructing Corp. did on those jobs was done by Chicago residents.
However, the Inspector General’s staff discovered that the payroll records were modified to to make it appear that workers lived in Chicago who didn’t, and to delete the names of workers who live in the suburbs from the payroll records the company submitted to City Hall.
The Sun-Times says Kennedy has acknowledged to city officials that the company submitted falsified payroll records on some city jobs. “But he has told them he blames a disgruntled former employee and business partner, Angelo Milazzo, for that,” the published report says.
Milazzo blew the whistle on Kennedy by filing a federal whistleblower lawsuit against the company in 2017, outlining the scheme. The city of Chicago has since joined the still-pending case. Milazzo stands to share in any financial damages the city is awarded from Kennedy’s company.
The Sun-Times says Milazzo was subpoenaed by Kennedy and his ex-wife to testify in their divorce case as they were haggling over the value of the company as part of the couple’s divorce settlement.
The Sun-Times reported:
Kennedy’s lawyers have asked a judge to dismiss the whistleblower lawsuit, challenging the validity of the residency requirement for contractors, which was passed during the late Mayor Harold Washington’s administration.
Kennedy started his business with his mother and, over three decades, has gotten 32 contracts from City Hall for which he has billed the city more than $295 million.