Mirage Tavern
Encyclopedia
The Mirage Tavern was a drinking establishment at 731 N. Wells St. in Chicago purchased by the Chicago Sun-Times
in 1977 to investigate widespread allegations of official corruption and shakedowns visited on small businesses by city officials. The journalists used hidden cameras to help ensure that city inspectors caught accepting payoffs for ignoring safety hazards were all properly documented.
In 1978, the Sun-Times broke the story in a 25-part series that documented the many abuses and crimes committed at the tavern, which was shaken down repeatedly by state and local officials. The series was initially awarded the Pulitzer Prize
for general reporting, but the jury's decision was overturned by the Pulitzer board when editor Ben Bradlee of the Washington Post led an attack on the grounds that the reporters used undercover reporting, a form of deception, to report the story.
The Mirage gave rise to major reforms including city code revisions, new procedures in city inspections and investigations at federal, state and city levels. The IRS sent in 20 agents to take a closer look at tax fraud by cash businesses. The Illinois Department of Revenue formed a new investigative unit: the Mirage Audit Unit. An ongoing federal investigation, spurred by the Mirage findings, managed indictments of a third of the city’s electrical inspectors in 1978, with more indictments to come later.
The project was overseen by editors James Hoge, Ralph Otwell, Stuart H. Loory and Joseph Reilly. In May 1977, journalist Pam Zekman
and Better Government Association chief investigator Bill Recktenwald purchased the tavern under the aliases Mr. and Mrs. Ray Patterson. Reporter Zay N. Smith
, who wrote the series, and BGA investigator Jeff Allen posed as the bartender and manager, respectively. Sun-Times photographers Gene Pesek and Jim Frost were in charge of photographing the tavern's activities from a hidden section of the tavern built over the washrooms.
Corrupt practices ran the gamut from shakedowns to tax fraud.
The shakedown amounts were small, typically less than $100, as the reporters learned of what they later called "the supermarket approach to graft--low prices, high volume" that inspectors tended to prefer as the safest way of doing illegal business.
Among others, a city electrical inspector agreed to overlook the tavern's faulty wiring. A fire department lieutenant agreed to sign off on the tavern's grand opening, despite the loose electrical wiring hanging from rafters and a basement piled high with trash against regulations. A city health inspector ignored maggots and sink drains that emptied down to the basement floor. A state liquor inspector ignored fruit flies in the liquor.
(The tavern quietly corrected all its code violations, on its own, after the shakedown inspections.)
Also reported were illegal kickbacks from pinball operators and jukebox operators (A.A. Swingtime Music Company), as well as tax skimming. Philip J. Barasch, a local accountant, gave the new owners of the bar extensive lessons on how to keep two sets of account books to skim profits without paying tax and advised them exactly what time of day inspectors showed up and how much their shakedowns would typically cost. He also suggested including his business card
with any payoffs to help smooth the shakedown process. The only officials he warned against bribing were the police, noting that "if you pay off a cop, they keep coming around every month, like flies, looking for a payoff". The Mirage, after hearing Barash's tax advice, hired six more accountants specializing in small cash businesses and was counseled by all of them to commit fraud.
The tavern, which has had more than one owner since the Sun-Times investigation, is now known, after a number of improvements, as the Brehon Pub.
Chicago Sun-Times
The Chicago Sun-Times is an American daily newspaper published in Chicago, Illinois. It is the flagship paper of the Sun-Times Media Group.-History:The Chicago Sun-Times is the oldest continuously published daily newspaper in the city...
in 1977 to investigate widespread allegations of official corruption and shakedowns visited on small businesses by city officials. The journalists used hidden cameras to help ensure that city inspectors caught accepting payoffs for ignoring safety hazards were all properly documented.
In 1978, the Sun-Times broke the story in a 25-part series that documented the many abuses and crimes committed at the tavern, which was shaken down repeatedly by state and local officials. The series was initially awarded the Pulitzer Prize
Pulitzer Prize
The Pulitzer Prize is a U.S. award for achievements in newspaper and online journalism, literature and musical composition. It was established by American publisher Joseph Pulitzer and is administered by Columbia University in New York City...
for general reporting, but the jury's decision was overturned by the Pulitzer board when editor Ben Bradlee of the Washington Post led an attack on the grounds that the reporters used undercover reporting, a form of deception, to report the story.
The Mirage gave rise to major reforms including city code revisions, new procedures in city inspections and investigations at federal, state and city levels. The IRS sent in 20 agents to take a closer look at tax fraud by cash businesses. The Illinois Department of Revenue formed a new investigative unit: the Mirage Audit Unit. An ongoing federal investigation, spurred by the Mirage findings, managed indictments of a third of the city’s electrical inspectors in 1978, with more indictments to come later.
The project was overseen by editors James Hoge, Ralph Otwell, Stuart H. Loory and Joseph Reilly. In May 1977, journalist Pam Zekman
Pam Zekman
Pam Zekman has been an investigative reporter at WBBM-TV in Chicago since 1981. A graduate of the University of California, Berkeley, Zekman spent over a decade as a newspaper reporter before working in television. Zekman is known for her aggressive investigative work, including the purchase of...
and Better Government Association chief investigator Bill Recktenwald purchased the tavern under the aliases Mr. and Mrs. Ray Patterson. Reporter Zay N. Smith
Zay N. Smith
Zay N. Smith is a journalist known for his work for the Chicago Sun-Times. From 1995 to 2008, he wrote a popular daily column called QT, which was a mixture of humor and political commentary...
, who wrote the series, and BGA investigator Jeff Allen posed as the bartender and manager, respectively. Sun-Times photographers Gene Pesek and Jim Frost were in charge of photographing the tavern's activities from a hidden section of the tavern built over the washrooms.
Corrupt practices ran the gamut from shakedowns to tax fraud.
The shakedown amounts were small, typically less than $100, as the reporters learned of what they later called "the supermarket approach to graft--low prices, high volume" that inspectors tended to prefer as the safest way of doing illegal business.
Among others, a city electrical inspector agreed to overlook the tavern's faulty wiring. A fire department lieutenant agreed to sign off on the tavern's grand opening, despite the loose electrical wiring hanging from rafters and a basement piled high with trash against regulations. A city health inspector ignored maggots and sink drains that emptied down to the basement floor. A state liquor inspector ignored fruit flies in the liquor.
(The tavern quietly corrected all its code violations, on its own, after the shakedown inspections.)
Also reported were illegal kickbacks from pinball operators and jukebox operators (A.A. Swingtime Music Company), as well as tax skimming. Philip J. Barasch, a local accountant, gave the new owners of the bar extensive lessons on how to keep two sets of account books to skim profits without paying tax and advised them exactly what time of day inspectors showed up and how much their shakedowns would typically cost. He also suggested including his business card
Business card
Business cards are cards bearing business information about a company or individual. They are shared during formal introductions as a convenience and a memory aid. A business card typically includes the giver's name, company affiliation and contact information such as street addresses, telephone...
with any payoffs to help smooth the shakedown process. The only officials he warned against bribing were the police, noting that "if you pay off a cop, they keep coming around every month, like flies, looking for a payoff". The Mirage, after hearing Barash's tax advice, hired six more accountants specializing in small cash businesses and was counseled by all of them to commit fraud.
The tavern, which has had more than one owner since the Sun-Times investigation, is now known, after a number of improvements, as the Brehon Pub.