Cook County Circuit Court Clerk Morgan Finley has steered thousands of dollars in insurance business from his public office to a longtime friend in whose office Finley operates a small real estate and insurance company.
Acting at Finley`s request and without competitive bids, the Cook County Board has paid nearly $168,000 for insurance coverage obtained since 1980 through Homer Gwinn & Co., a Chicago firm. The company has been the broker on some insurance policies for Finley`s public office since 1974.
Finley`s 23-year-old firm, Morgan M. Finley Inc., rents office space in the Gwinn agency, and the agency pays commissions to Finley`s firm on insurance brokered through it.
Gwinn`s president is James J. Finn, a longtime friend and business acquaintance of Finley`s. Finn said Homer Gwinn & Co. first became the broker on two insurance policies for the Circuit Court clerk`s office shortly after Finley was appointed in 1974.
``Morgan Finley is known to me for many, many years,`` Finn said. ``I`m in the insurance business, and he referred the business to me.``
Peter Deuel, a spokesman for Finley, said the county`s purchase of insurance through Gwinn was a legitimate business transaction.
``There is nothing improper or illegal about that transaction,`` Deuel said. ``He (Finley) doesn`t make any money from it.``
Finley is under federal investigation in connection with allegations that he accepted $25,000 from government informant Michael Raymond. Finley has denied he received any such payment from Raymond, a convicted swindler who worked undercover for the FBI in an investigation of suspected corruption in Chicago government.
An Internal Revenue Service source close to the Finley investigation said agents are just beginning to explore the business relationship Finley has with Gwinn.
According to insurance experts, Gwinn, with offices at 117 W. Harrison St., is a well-respected insurance firm that has a long history of working with Chicago politicians. The firm sells insurance for a variety of national insurance companies and makes its profit through commissions paid by the carriers.
Experts said the agency might have made as much as $30,000 in commissions from the business referred by Finley since 1980.
The policies purchased through the firm include a public officials bond for Finley, a blanket liability bond for Finley`s employees and a money and securities policy. The insurance protects the county in case of theft by Finley or his employees or missing funds at about 25 locations where Finley`s office keeps cash in safes.
Though Cook County didn`t seek competitive bids for its coverage--it is not required by law to do so--officials in neighboring Du Page and Lake Counties said they were able to cut the costs of similar insurance policies by seeking bids or informal price quotations.
Du Page Circuit Court Clerk John W. Cockrell said last week that the county paid $2,175 in 1984 for a $2 million public officials bond for his post.
Cockrell`s office annually handles $27 million in fines and bonds. The $2,175 pays for four years of coverage.
Cockrell said the county was paying $4,200 for a similar $2 million policy until it sought competitive bids in 1984.
Finley`s policy cost $6,214 in 1984 for $500,000 in insurance coverage over four years. The Cook County office handles more than $200 million in fines and bonds a year.
Cook County pays $13,634 a year for the policy insuring against loss of funds at locations where money is handled. Another four-year policy provides up to $1 million in insurance against theft by the 2,200 Cook County Circuit Court employes. It costs $28,176 for four years.
Cockrell said that Du Page`s $500,000 policy insuring against theft by his 153 employees cost $1,719 for four years of coverage.
Deuel contends that to compare the Du Page County court clerk`s office to ``the largest trial court in the United States`` is an ``odious comparison.`` He argues that the rates paid by Cook County are competitive, even though bids weren`t sought.
``We made telephone inquiries in 1976 when it came up for renewal. I`m told it all ended up the same price. The rate they quoted us was the same price from all of them,`` Deuel said.
Deuel said Finley`s office hadn`t sought competitive prices since.
``As far as we know, there is no difference in the cost of our doing it this way,`` he said.
The carriers issuing public officials bonds for Circuit Court clerks draw no distinction based on the size of the office, according to a spokesman for Kemper Insurance Cos. A company spokesman said the $6,214 premium paid by Cook County is the rate usually quoted by the company for the cost of a $500,000 policy.