The managing partner of an accounting firm with deep ties to the Daley family took center stage at Ald. Patrick Daley Thompson’s federal tax trial Wednesday — even winding up in trouble with the judge himself by the time he left the witness stand.
Robert Hannigan of Bansley & Kiener helped prosecutors and Thompson’s defense attorney paint conflicting portraits of the 11th Ward City Council member, as both an attentive, engaged tax client and a procrastinator always rushing to file his returns at the last minute.
Which version of Thompson jurors accept is crucial to the case.
Bansley & Kiener is the same accounting firm that gave a clean bill of health to Washington Federal Bank for Savings in Bridgeport six months before it was shut down by federal regulators. That’s the same bank that gave Thompson the $219,000 at issue in his trial.
Thompson is charged with filing false federal income tax returns for the years 2013 through 2017 and lying to the FDIC about how much money he owed the bank.
The feds say Thompson falsely claimed mortgage-interest deductions for interest paid to Washington Federal. Thompson attorney Chris Gair argued that Thompson didn’t realize Hannigan’s firm had included the deductions on Thompson’s tax returns after the bank wrongly sent him interest forms. The feds say Thompson paid no interest on the money.
Assistant U.S. Attorney Michelle Petersen used her questioning of Hannigan — as well as emails and tax records — to portray Thompson as being involved in the preparation of his returns. For example, Hannigan emailed Thompson in April 2017 so Thompson could review his 2016 tax returns. Thompson emailed back the same day asking about adjustments for his wife’s use of the house as her office, records show.
Hannigan’s firm also had several questions for Thompson in a 2018 “open points” memo about his 2017 returns, including a question about the Washington Federal money. The feds say Thompson responded to several of the questions, but the Washington Federal deduction wrongly remained on the return.
Still, Hannigan told jurors that the $10,000 Washington Federal mortgage-interest claim on Thompson’s 2017 return was actually an “oversight” by Bansley & Kiener, because it was simply an estimate the firm had made. The bank did not send Thompson a 2017 interest form because it had closed by the end of that year.
Gair stressed it during his cross-examination.
“It was a mistake that you made,” Gair told Hannigan.
Hannigan acknowledged for Gair that Thompson often turned in records within days of the tax filing deadline. And he even confirmed that a Bansley & Kiener worker once missed the firm’s end-of-the-tax-year-party because he was still waiting for Thompson’s tax records.
But Hannigan also found himself in trouble after someone overheard him talking to two upcoming witnesses — in violation of a court order — in the courthouse cafeteria during a lunch break while Thompson’s friends and family were seen nearby. Hannigan allegedly called his cross-examination by Gair “just a game of gotcha.”
U.S. District Judge Franklin Valderrama threatened to hold him in contempt.
“There has to be a consequence,” Valderrama said.
But the judge let Hannigan finish his testimony without the incident coming up in front of the jury. Only one of the upcoming witnesses Hannigan spoke to later took the stand. She did so briefly, and denied her handwriting appeared on Thompson’s records. It did not seem the incident would seriously affect Thompson’s trial.
Though Hannigan is a key government witness, Thompson has continued to pay the accounting firm from his political campaign fund. Thompson has paid the firm more than $16,000 for accounting services for his campaign fund, according to records the alderman has filed with the Illinois State Board of Elections.
It’s unclear when Bansley & Kiener began working for Washington Federal. One of the accountants Bansley has used to audit the defunct bank was Michael Huels, a cousin of former Ald. Patrick M. Huels (11th). Michael Huels is the brother-in-law of William Mahon, who served on the Washington Federal board of directors for two decades until the bank shut down in December 2017.
Mahon, who retired last month as a deputy commissioner of the city of Chicago Department of Streets and Sanitation, is among 14 people who have been charged with conspiracy regarding the collapse of the bank.
Bansley & Kiener has agreed to pay a $2.5 million settlement to the Federal Deposit Insurance Corp., the federal insurance program that had to cover most of the bank’s losses.
