Ethics in Journalism 071

Off Topic

The Story Behind the Chicago Newspaper That Bought a Bar

Journalists will go far for a story and they’ll go far for a drink—but would they buy a bar? In Chicago, that’s exactly what a newspaper did. An oral history of an incredible experiment.

BY 1976, REPORTER PAM ZEKMAN was well-acquainted with the everyday corruption that permeated Chicago. After all, the city was so well-known for shady dealings it birthed its own shorthand: “Chicago-style politics” was used with frequency to describe boss-style rule and graft in government.
Illustration by Jack Jordan/Chicago Sun-Times.

Zekman was part of a four-person Pulitzer Prize-winning investigative team at the Chicago Tribune, where she had gone undercover in a nursing home, for a collections agency, in a hospital, and at a precinct polling place, exposing wrongdoings ranging from medical malpractice to election fraud. “We had become known for doing this kind of undercover reporting with one caveat: When there’s no other way to get the story,” says Zekman. “We didn’t do it just for the idea of doing it and we did not do it cavalierly. ”

When Zekman was poached by a rival paper, the feisty Chicago Sun-Times, she proposed a daring project that would go down in the annals of journalism history as both a feat of reporting and a focal point for ethics debates still raging today. For years, Zekman had been collecting tips about city employees extracting bribes from local businessmen, but couldn’t get sources to go on the record; she figured the only way to get the story would be to get inside the system. So she convinced her paper to buy a bar. They would staff it with newspaper workers, run it like any other watering hole (with some notable exceptions that included concealed photographers), and wait to see what happened. It was named, appropriately, the Mirage. The voices in this story are:

PAM ZEKMAN, reporter, Chicago Sun-Times

ZAY N. SMITH, reporter, Chicago Sun-Times

JIM FROST, photographer, Chicago Sun-Times

BILL RECKTENWALD, investigator, Better Government Association

  Interviews have been condensed and edited for length and clarity.


Bartender Jeff Allen watching water drain from bar sink drain directly onto basement floor. All photographs by Jim Frost of the Chicago Sun-Times

FEBRUARY 1976

Pam: We started getting phone calls from businesses that were complaining about having to pay a steady stream of inspectors that come into the restaurants and bars looking for payoffs to ignore city violations. And we would go out to talk with them or try to talk with them on the phone into going public with this and not a single one would do it for fear that they would have trouble with the city forever if they went public with it and the city would shut them down. We couldn’t get anybody to go on the record.

Zay: Corruption was an everyday thing. It is in any city, but in Chicago we perfected many methods of it over the years.

Jim: In Chicago, in the ‘70s? To go up against City Hall? It’s suicide. Nobody would do it.

Pam: The idea evolved with George Bliss, who was one of my mentors at the Tribune. He and I proposed that the Tribune go undercover and buy a bar. And see what happens to us and see if we’re put through the same thing. The idea was presented to attorneys for the Tribune at the time and they pretty much killed it.

But when Pam ran the same idea to Sun-Times editor James F. Hoge in February 1976, he pounced on it—they would find the money, he told her. In December, Hoge officially greenlit the project. The paper would partner with a local watchdog group, the Better Government Association, which investigated corruption in Chicago. Pam called her contact Bill Recktenwald at the BGA with the news: the Sun-Times was buying a bar. The pair would pose as a married couple, Pam and Ray Patterson, aspiring tavern owners.


Games being carried into the bar.

JANUARY 1977

Pam: Bill Recktenwald from the Better Government Association and I went bar shopping as soon as we got the go-ahead from our bosses.

Bill: We had interesting conversations with people who were owners about, ‘Yeah, you had to pay people off.’ Very frank discussions; it was an open secret. When we were a reporter and an investigator, people wouldn’t talk. Now that we were a husband and wife pretending to buy a tavern, people wouldn’t shut up.

Pam: We looked at several locations. This location was relatively close to the Sun-Times so that people dispatched to the bar when they needed to help us—particularly photographers who were going to be assigned to the project—would be able to get there easily.

 

After months of looking for the right bar, the group landed on an ideal location: An unassuming tavern called the Firehouse on 731 North Wells Street and located about ten minutes from Rush Street, a bustling commerce corridor. In addition to being close to the Sun-Times offices, the bar came with an unexpected perk—a business broker who informed Pam and Bill he would help them cheat on their taxes and buy off officials.

Pam: Phil Barasch was the business broker who was handling the sale. He had also been the accountant for the former bar owner and Bill Recktenwald and I went to meet with Phil about this bar and we knew immediately after meeting this business broker that this was going to be the bar. We also felt extremely comfortable about the possible future of the project because he laid out for us, with no prompting on our part, how he was going to steer us through the process of getting licensed and getting inspected and getting our inspections approved—he would be contacting the building inspector and the fire inspector and whatever inspector we would have to deal with and we should leave an envelope with a certain amount of cash, and he told us what the cash amount should be for each inspector. And how to do it all!

Bill: He was one of those guys, after you shake his hand, you want to go wash.


A city inspector checks the beer cooler.

JUNE 1977

Pam and Bill bought the bar—for $5,000 down on the $18,000 asking price. (By the end of the project, the net cost to the Sun-Times and BGA would be $25,000.) Now they just had to open it, all while maintaining secrecy and following strict journalistic ground rules.

Bill: One of the things we wanted to make sure was that if anybody was indicted because of this, that it wasn’t us. And that meant that any papers we signed, like the application for the license, had to be 100 percent truthful because it was being signed under penalty of perjury; that the money being used to finance this came from a legal source. And we looked at the entrapment laws because we knew people would say it was entrapment.

Pam: The rule we followed the whole time was not to say anything, or pressure anybody to do anything they weren’t normally inclined to do.

Zay: It was a very highly kept secret. Three editors, Pam and I, and two photographers participated from a hidden loft. That was it from our paper. We didn’t even tell the publisher.

Pam: The newsroom did not know what we were working on.

Jim: I didn’t even tell my wife what I was up to.

Zay: It was a big chance. The cover could be blown at any time. What if someone was killed in the tavern? It happens, in a city like Chicago. It was a very nervy thing to do.

Pam: It was a constant, almost 24/7 reporting project where, at any given time, something could go wrong.


A Chicago inspector in the bar. It turned out to be incredibly easy to catch city officials taking bribes.

JULY-OCTOBER 1977

After rejecting a few tavern names—such as “Le Tappe Lloyd”, a play on “tabloid”—the team settled on an inside-joke: “Mirage,” an idealmoniker for a building riddled with code violations and coated in pigeon droppings.

Pam: The basement was a mess in terms of leaking water from pipes creating unsanitary conditions. The bathrooms were not up to code. There were just a whole variety of problems that we knew inspectors would likely have trouble with.

Bill: There was a point that we did bring a person in who was a structural expert to assure us that the building would not collapse if we filled it up with people.

Zay: It was dirty, badly kept, just kind of a hang-out for a few tipplers in the neighborhood. We cleaned it up as best we could, opened for business, and waited to see what the city would bring us.

 

The reporters decorated the Mirage with hanging plants and Marimekko prints and installed a jukebox and pinball machine. A sign outside offered a jaunty drawing of a cactus. Zay went by his college nickname, Norty; Bill (aka Ray) grew out muttonchops and a mustache to disguise his appearance, and Pam tied a scarf over her most recognizable feature, a head of bright red hair. The Mirage officially opened for business on August 17th, but evidence of corruption arrived much earlier.

Zay: The payoff parade began before we opened. The health inspector, when he inspected us— I mean, the basement just had maggots glistening on the floor. Upstairs it was no better. He shook us down for a few bucks and passed the place.

Pam: I think one of the things that amazed us is that these inspectors sold out public safety on the cheap. They were not taking huge amounts. We were told to leave $10 for one inspector, and $25 for another inspector.

Bill: The plumbing inspectors, the building inspectors, the electric inspectors, the fire inspectors— they all took envelopes with money in them and they all passed us. And we should never have passed.

Throughout the process, the Mirage staff assiduously documented every trespass.

Pam: We took notes immediately after having an encounter with one of the inspectors. When there was an obvious journalistic thing to record and report, I took a lot of notes and so did whoever else involved in whatever the event was. We kept, in essence, a diary.

Zay: We wanted to have photographers for various events, and luckily, at the back of the bar, there was a storage space and then a ladder up to another storage space about ten feet up. And it was the perfect place for them to be, there was a ventilation opening at that point and they rigged that so they could shoot through it without being seen.

Jim:  Our cover was we were repairmen. Both Gene [Gene Pesek, another Sun-Times photographer assigned to the story] and I, in our car trunk, we had overalls, caps, and gloves and whatever a serviceman might have. And then we had a big tool box and the big tool box was to put your camera in to get it in and out. And so we would get the call that an inspector had shown up—and sometimes they showed up as a surprise. When you got that call on your two-way radio, whatever you were doing, you just walked out. You go to your car, pull on your coveralls, grab your toolbox, drive over there and walk in and say something to the bartender as you walked in, ‘Hey is that outlet still shorting out in the back?’ He’d say, ‘Yeah, yeah, yeah,’ and you’d fade into the back and go up into the loft and take your camera out and sit and wait for the exchange to take place.


From left are: Sun-Times reporters William Recktenwald, better Government Ass. Investigator, Pamela Zekman, Zay Smith and Jeff Allen, who posed as the Mirage’s owner.

Meanwhile, amidst the payoffs and reporting, the crew—most of whom had no experience operating a small business—still had to run a bar.

 

Zay: I always put on the jukebox Peggy Lee singing “Fever” which seems to me a suitable song for that place. Also on the jukebox was the Star Wars cantina theme. Which seemed very fitting for our clientele.

Bill: We were on a strict budget, so we had taken a lot of stuff in. Pam brought in her microwave from home and her blender.

Pam: Sometimes in the morning I was there by myself. Some people would walk in and ask for a drink that I had no idea how to make. One couple wanted a margarita at 11 in the morning, two margaritas. I didn’t have a clue as to what went into a margarita or how to make the salt stick around the top of the glass. Another guy wanted a shot and beer and I didn’t know exactly what that was and I put the shot into the beer. Which I now know is a terrible thing to do.

Zay: We finally decided, you know what, I’m going to go to bartender school, because a) I’d learn bartending, and b) I’d learn about how you handle tips and taxes and find another angle from which to view the corruptions that might exist. It was a good bartending school; I learned how to make 85 drinks. I came back having a rough idea of how to work behind the bar.

Bill: There was a fight and I’m not sure exactly who started it or how it started because I wasn’t watching carefully at the beginning part, but what occurred to me as being really strange is that people who had previously been sitting having nice conversations with each other all of a sudden are in this slugfest. People pushing, chairs going over. One of the bartenders was an intern at the BGA, skinny kid, jumps over the bar and all of a sudden I see him going back over the other direction. I don’t know if he was pushed or tossed.

Zay: One of our customers who came in every day, suddenly said to no one in particular, but loudly, “I’ve figured it out, I’ve finally figured it out, this place is a front! It’s gotta be a front for something.” I just laughed him off.


Pam in kitchen. The Mirage was given permits to sell and prepare food even though its kitchen contained at least two flagrant code violations: a hood above a grill with no exhaust fan and a sink that had been painted over.

The Mirage shuttered on Halloween; it was cleaned up and resold. During its scant four months in operation, the team been shaken down by everyone from pinball machine operators to state liquor officials and had collected evidence of a widespread culture of payoffs and negligence among city inspectors, including systematic tax fraud that was costing the city an estimated $16 million annually. Zay commandeered his own room at the Sun-Times to begin turning stacks of notes into a series of stories; Pam commenced months of follow-up reporting. On January 8, 1978, the Sun-Times debuted its first story in a 25-part series detailing the goings on at the Mirage. The story was an instant hit.

 

Bill: I’d take the L in and see people reading the paper, you know they’re reading your story. I knew where the jumps were and what was in the jumps, and you’d see people start to smile or chuckle at things that were in the stories.

Pam: Zay Smith did an incredible job [with the writing] and it was something people were talking about every day. And it wound up getting international attention, much to my amazement. It played in other countries and it was a huge, huge success.

Jim: There was probably five or six months after the thing broke that we were just going everywhere. Pam and Zay and Gene and I would go as a team to do appearances at universities, journalism schools, city clubs, journalism clubs.

Zay: I walked back down from the City Room, heading to my desk, and we had a row of desks down the middle and it was called “Murderers Row” because columnists—the stars—sat in that row. And as I walked past them, they looked up at me—they were obviously reading the papers that had just come out—and they smiled and gave me a thumbs-up. And I thought, ‘Well, that’s nice! They liked it!’ And it made me feel good. I was later told they gave me a thumbs-up because I got the word ‘ass’ in the paper. They’d been trying to get the word ‘ass’ past the copy desk for years.


Grand opening party.

The 25-part series had immediate and lasting impact. Over a dozen officials were suspended or fired. By June 1979, 18 city electrical inspectors had been convicted of bribery. Mayor Michael A. Bilandic created an Office of Professional Review to ferret out corrupt city employees, and the Illinois Department of Revenue created a task force to uncover tax fraud dubbed the “Mirage Unit.” The series, which had exposed citywide corruption with cinematic flair, was an obvious candidate for a Pulitzer, and was subsequently nominated by the Pulitzer jury in the category of Local Investigative Reporting. But when the nomination reached the board, things derailed quickly. Eugene C. Patterson, board member and editor and president of the St. Petersburg Times, declared that the nomination sparked “the most fascinating debate ever heard at Pulitzer.” The Mirage story, he said, “had an element of entrapment.” Benjamin C. Bradlee, executive editor of The Washington Post and also a board member, stated that, “We instruct our reporters not to misrepresent themselves, period. We felt a Sun-Times award for this entry could send journalism on a wrong course.” The Pulitzer was awarded to Pennsylvania’s Pottsville Republicanfor a series on coal and organized crime.

 

Pam: We found that we were in the middle of a growing controversy over undercover reporting and should you identify yourself as a reporter at all costs and never do this—that was one of the criticisms. There was a controversy that grew over the use of undercover reporting to expose wrongdoing versus reporting on wrongdoing based on anonymous sources. There was a standard at the time that was developed by TheWashington Post in the Watergate era of ‘two anonymous sources makes it okay’. My problem with that is I really feel that undercover reporting—when there’s no other way to get a story, and when there’s a substantial abuse that affects a lot of people—is a far more reliable method of reporting than charging somebody with wrongdoing based on anonymous sources so they don’t know where it’s coming from.

Zay: A few weeks later, The Washington Post started a series—and it was a good series—called “Down & Out.” And what was the series? A Washington Post reporter pretended to be homeless for a period of time to see what was going on. So you tell me the difference.

Bill: Everybody we talked about we had names for and everybody had an opportunity to respond. No one said, ‘No, I wasn’t there,’ ‘No, that didn’t happen’. They just shut up.

Pam: These inspectors walked in the bar and did what they apparently were doing in all of their inspections or a good part of their inspections. They were accepting payoffs and encouraging or pressuring businesses to make the pay offs by holding the idea of passing or failing an inspection over the heads of the business people. We just opened up for business and let them do what they normally do.

Patterson and Bradlee were not unanimous in their objection; board member Clayton Kirkpatrick, editor and vice-president of Zekman’s former employer, The Chicago Tribune, objected, saying later, “I don’t see any other way they could have exposed what they did.” The Columbia Journalism Review ran a Publisher’s Notes column in which it awarded the project its own “imaginary award”.


Photographers Jim Frost and Gene Pesek.

In conversations about the validity of undercover reporting, the Mirage is a perennial subject. Today, the Society of Professional Journalism includes in its Code of Ethics the edict that reporters should “Avoid undercover or other surreptitious methods of gathering information unless traditional, open methods will not yield the information vital to the public.” Recent high-profile instances of undercover reporting include reporter Suki Kim’s months posing as a missionary and teacherin North Korea and an expose on for-profit prisons in Mother Jones in which a reporter went undercover as a prison guard. In an article addressing the story, Mother Jones editor-in-chiefClara Jeffery wrote, “Shane’s story will draw a fair bit of curiosity around the newsgathering methods employed. But don’t let anyone distract you from the story itself. Because the story itself is revealing as hell.”

 

PAM ZEKMAN worked at the Sun-Times until 1981, when she became an on-air investigative reporter at WBBM, Chicago’s CBS affiliate, where she still works. She shares two Pulitzer Prizes for work done at the Tribune and Sun-Times. She continued to work undercover after the Mirage, includingposing as a patient at an abortion clinic as part of an investigation that exposed unnecessary procedures being performed on women for profit.

BILL RECKTENWALD joined the staff of the Tribune as a reporter not long after the Mirage story broke. Among his many projects was a series of stories written about his time undercover as a prison guard at Pontiac State Prison, which resulted in the restructuring of the state prison system. He is currently a senior lecturer and journalist-in-residence at the School of Journalism at Southern Illinois University.

ZAY N. SMITH continued to work as an investigative reporter at the Sun-Times until he became a columnist. His popular column QT ran from 1995 to 2008. He still writes online. Smith and Zekman wrote a book about the Mirage, published in 1979, titled, simply, The Mirage.

JIM FROST worked at the Sun-Times until 2006. After the Mirage project he focused on feature story photography, though he was paired up with Zekman again for the abortion clinic story, for which he took photographs with a camera hidden in a briefcase. He now runs his own photography business and lives in Wisconsin.

 

Photograph at top: The grand opening of the bar in the late summer of 1978.

Share this story