Former Orland Park village manager La Margo files lawsuit against Pekau, personally and officially
Former Orland Park Village Manager Joe La Margo accused Mayor Keith Pekau of violating a separation agreement he signed with the village following his forced resignation in May 2019. La Margo was forced to resign after initiating an investigation into allegations of bid-rigging that involved two firms including one owned by Pekau, and after Pekau’s slate of trustees gave him control of the board. The agreement stipulates that neither side would comment about the other, but in his lawsuit, La Margo details numerous instances where after the agreement was signed, Pekau viciously and constantly attacked La Margo and allegedly sought to prevent him from finding new work.
By Ray Hanania
Former Orland Park Village Manager Joseph La Margo filed a lawsuit on April 10, 2020 accusing Mayor Pekau of breaching his departure contract, of defamation, and of “intentionally” causing him “emotional distress.”
Named as defendants are the Village of Orland Park, Orland Park Mayor Keith Pekau, both officially and personally, and Trustee William Healy personally. The lawsuit demands a total in excess of $225,000 in damages for the three claims.
The lawsuit spells out specific instances where Pekau went out of his way to defame La Margo and to undermine his ability to find subsequent work, after the two parties signed a separation agreement in which both agreed not to disparage each other.
La Margo, who worked for the Village of Orland Park in various positions for 13 years including when named village manager in April 2015, was the target of a vicious defamation campaign, the lawsuit details, that included Mayor Pekau filing complaints with La Margo’s “professional association,” a reference to La Margo’s membership in an association for village managers.
In the lawsuit, La Margo’s attorneys said the harassment began after Pekau’s endorsed slate of candidates, Healy, Cindy Katsenes and Michael Milani, won the April 4, 2019 municipal elections giving Pekau control of the village board.
Two days after the election, according to the lawsuit, Pekau demanded La Margo resign as Village Manager, apparently angry over an investigation that La Margo had initiated after receiving confidential information before the election about irregularities involving Pekau’s business.
La Margo’s lawsuit states that an unnamed employee reported to him in November 2018 that “irregularities” might exist in the “billing and bidding practices” of two landscape companies, including Groundskeeper Landscape Care, LLC, which is owned by Pekau.
La Margo, following village protocol, hired an outside legal firm, Jones Day with a retainer of up to $15,000. LaMargo, the lawsuit notes, had the contractual authority to contract up to $20,000.
The public debate on the investigation before, during and after the election was contentious and often very personal.
After Pekau won control of the board, La Margo and the Pekau administration reached a separation agreement for La Margo’s resignation. LaMargo agreed to resign on May 6, 2019 and the investigation into the allegations of bid-rigging were terminated.
Approved by the Village, the agreement required both sides, Pekau and La Margo, to not make “disparaging comments” about each other. The agreement states:
“Employee agree that he will not make any disparaging comments about the Village or its employees or agents. The Village agrees that its Mayor and Board, as a Mayor and Board, shall not make any public statement during a meeting that is disparaging to Employee.”
But in fact, La Margo’s lawsuit details, Pekau launched a high profile and vicious campaign slandering La Margo 14 days after the agreement was signed. The lawsuit alleges Pekau encouraged public criticism to prevent La Margo from finding new work. It cites a letter from an unnamed writer that was sent to LaMargo’s new employer accusing him of ethical lapses and misconduct.
The lawsuit documents a series of public incidents by Pekau against La Margo:
On May 20, 14 days after signing the agreement, Pekau accused La Margo during a closed-door executive session, of leaking details of the bid rigging investigation. The verbatim minutes of the meeting were released on a vote by Pekau and his board allies, the lawsuit contends, in an unprecedented move. Executive Session comments are always kept confidential so board members can address sensitive issues without concern, especially about personnel matters.
Pekau held a press conference continuing his attacks against La Margo after the board meeting repeating his accusations. An attorney with Klein, Thorpe and Jenkins, the village attorneys, were with Pekau as he outlined his accusations against La Margo.
On May 29, Pekau held another press conference and accused La Margo of “committing criminal acts of official misconduct” and “dissemination of information.” Pekau called the now abandoned bid-rigging probe “unethical, potentially illegal.” Pekau accused LaMargo publicly of “questionable judgment” and “nefarious political intentions.”
Pekau told reporters, according to the lawsuit, “The people of Orland Park should be appalled … We have an obvious abuse of power that wasted $46,000 of taxpayer money on a politically motivated fishing expedition against a duly elected mayor.”
Pekau continued his assertions of criminal behavior by La Margo accusing him of “violating the law.”
All of the above accusations and attacks were also repeated on the “Keith Pekau for Mayor” political blog, which was then reposted by Healy on his personal Facebook page.
In emails to the news media sent from his personal Gmail account, Pekau contended that La Margo’s probe of his company was a “fabrication.”
On June 3, 2019, Pekau told the Village Board the investigation was intended to influence the April 4 election and that “a couple of trustees” along with La Margo had “colluded” to “run a clandestine investigation on a sitting mayor for the political purpose of influencing a campaign in an attempt to overturn a mayoral election.”
At the same meeting, Pekau asserted La Margo lacked the “legal authority” and “violated the Open Meetings Act” accessing records improperly.
During the meeting, the lawsuit states, Healy also made disparaging statements about La Margo.
The personal attacks against LaMargo continued at the June 17, 2019 board meeting in which Trustee Kathy Fenton questioned why the minutes of the May 20 executive session were being released to the public.
The lawsuit also alleges that Pekau told Trustee Jim Dodge and former Trustee Carole Ruzich “that he would do his best to make sure plaintiff would be unable to obtain future employment after leaving the village.”
In fact, the allegations of “bid rigging” that LaMargo investigated was not conducted in secret.
“The investigation was not conducted in secret. Attorneys James Roche, Dennis Walsh and Kenneth Friker; trustees Carole Ruzich, Patricia Gira, Michael Carroll, Jim Dodge, Kathleen Fenton and Daniel Calandriello; former Assistant Village Manager John Keating; and the seven employees interviewed as part of the investigation, were all informed of and had knowledge of the investigation.”
“Defendants’ public comments encouraged citizens to repeat the comments and attempt to interfere with Plaintiff’s ability to gain subsequent employment. On or about November 3, 2019, an Orland Park resident sent a letter to Plaintiff’s subsequent employer repeating the false statements published by Defendants claiming that Plaintiff “CANNOT be trusted” and claiming “he was asked to [leave] Orland Park because of his unethical conduct,” the lawsuit details.
“Defendants’ conduct not only caused Plaintiff to lose his employment in Orland Park, but also caused permanent damage for any subsequent employment causing Plaintiff to lose future employment contracts.”
The lawsuit notes that La Margo “was unable to find comparable employment in Illinois as a result of the false statements made about him and has had to accept employment out of Illinois.”
La Margo, who was very popular and well-liked in Orland Park, was hired by the City of Portage, Michigan on Sept. 3, 2019. During his time as village manager, La Margo was praised for his leadership and was considered effective in managing the Village of Orland Park, which is a Village Manager form of government when the mayor is part-time. Pekau was elected after his predecessor Dan McLaughlin forced through ordinances that dramatically increased the mayor’s salary from $40,000 to $150,000, which also created a pension estimated to be at about $140,000 a year. McLaughlin was thrown out of office by Voters in 2017 and Pekau, a political unknown, won by default. Previously, La Margo served as the president of School District 135, which was considered one of the best in Illinois, serving from 2011 until 2015.
Orland Park Village Manager George Koczwara said Friday (April 17) he has not seen the lawsuit, adding, “The Village of Orland Park addresses all complaints – including lawsuits – in a very serious fashion. Since this is the first we are hearing of a lawsuit, it would be impossible to comment on its merits, or lack thereof.”
UPDATE: LaMargo’s attorneys said the Village’s attorney’s, Klein, Thorpe & Jenkins and attorney Dennis Walsh at the firm, were provided a copy of the lawsuit. They said that because of the unusual circumstances caused by the coronavirus COVID-19 pandemic, service did not happen normally through the Cook County Sheriff’s office, which is understandable.
Click this link to read the lawsuit obtained upon request from the attorneys at the law firm of Kurt, Sleper & Exline LLC. O4-10-20 LaMargo Lawsuti Complaint
Click here to read the separation agreement:
04-10-20 LaMargo Complaint Ex A
UPDATE: The attorneys for La Margo, Kurt, Sleper & Exline LLC, also issued this press release. 04-20-20 La Margo Press Release from attorneys FINAL