Orland Park settles lawsuit filed by former manager against Mayor Keith Pekau
Orland Park’s former village manager will pay $30,000 to settle a lawsuit filed in the wake of an investigation he launched into possible bid rigging by Mayor Keith Pekau.
Pekau and a company he owned were ultimately cleared of any wrongdoing, and trustees approved the settlement at a special Village Board meeting Wednesday.
“We’ve been fully exonerated like we knew we would be,” Pekau said after the vote to accept terms of the settlement. “I’m glad it is over.”
In a June 2023 decision, a Cook County Circuit Court judge handed a victory to the village by rebuffing defamation claims by Joseph La Margo against village officials, including Pekau.
Judge John Curry also cleared the path for the village to continue its own lawsuit against La Margo, which alleged breach of employment agreement, breach of fiduciary duty and breach of duty of loyalty.
In his ruling granting summary judgment to the village, Curry essentially said La Margo would not have been successful in the case should it have gone to trial. La Margo’s appeal of that decision is pending, according to the settlement agreement.
Pekau said Wednesday “we knew we did nothing wrong and we knew this day was coming.”
He said the village would dismiss the lawsuit it has pending against La Margo.
Trustee Sean Kampas said the investigation and La Margo’s lawsuit were “an entirely unnecessary distraction from the business of the village.”
“It took us four years to get here and for what?” Kampas said after the vote.
La Margo filed the lawsuit in April 2020, also naming the village and Pekau’s campaign committee.
La Margo, who resigned as manager in early May 2019, hired the law firm Jones Day that January to investigate possible bidding irregularities involving the business formerly owned by the mayor, GroundsKeeper Landscape Care, which had done work for the village for several years.
The investigation centered on the awarding of a contract for toppling trees in Orland Park that had been decimated by the emerald ash borer.
In a March 2019 draft report, the law firm said it could not “conclusively establish that there were any clear violations of existing law or policy” in connection with the bidding processes, and recommended additional investigation would be needed.
A subsequent investigation by Joseph P. Mitchell, then the village’s interim assistant village manager and deputy police chief, picked up where Jones Day had finished, concluding there was “no evidence of any misconduct” on Pekau’s part as mayor or as the owner of GroundsKeeper.
La Margo said Pekau and Village Trustee William Healy had defamed him with comments about La Margo having abused his authority in launching the probe on his own.
Pekau “enjoyed an absolute privilege in making all of his alleged defamatory statements, as they bore upon subjects reasonably related to his duties as mayor,” Curry wrote in his decision.
The judge wrote that any alleged defamatory statements “were protected statements of opinion” by Pekau and Healy.
Curry also wrote that La Margo had other options apart from hiring the law firm.
“His objective could have been accomplished by means other than the path he took,” the judge wrote. “He could have left the matter entirely at the hands of the village attorney, or he could have raised the concerns before the Board of Trustees, or he could have reported the matter to state or federal prosecutors.”
Pekau held a news conference in May 2019, following La Margo’s resignation, where he lashed out at the former manager for wasting taxpayer funds in hiring Jones Day, and that “anyone with reasonable judgment would have recognized in minutes that these allegations were unfounded.”
La Margo said at the time he consulted with lawyers who do work for the village before hiring the law firm, and said they advised him to look for an outside firm.
He said at the time the village needed an “independent, objective look” into the allegations, and that it “would have been unethical of me to ignore this.”
La Margo was hired by the village in 2006 as deputy village clerk and in 2012 given the additional duties of public information officer, then bumped up to assistant village manager in 2015.
He was named interim village manager in April 2017, taking over the job from Tim McCarthy, then the village’s police chief. The Village Board approved La Margo as village manager in September 2017.
Pekau, elected to his first term in April 2017, had opposed La Margo being named village manager.
“Mayor Pekau and Manager La Margo were not compatible, and Pekau wanted La Margo out as soon as he achieved majority support on the Village Board,” Curry wrote of their rocky relationship.
The spring 2019 election saw three trustees backed by Pekau winning seats on the Village Board, giving the mayor a 4-3 majority. La Margo’s resignation was approved at the Village Board meeting after the new trustees were sworn in.
La Margo, in his lawsuit, alleged Pekau forced him out of his job and subsequently defamed him. La Margo also alleged breach of contract and “intentional infliction of emotional distress.”
In his lawsuit, La Margo alleged comments made by Pekau at the news conference and during a Village Board executive session May 20, 2019, a little more than a week before the news conference and after La Margo’s resignation, violated a clause of the severance agreement that neither side make disparaging comments toward each other.
As part of the recent settlement, La Margo made a sworn statement “setting forth information within La Margo’s knowledge regarding certain topics.”
In the statement, La Margo said he “took great pride in working for the community, and “my number one responsibility was to serve the people of Orland Park.”
“Every decision I made was based on what I believe to be in their best interest,” he wrote. “I was not motivated by politics or political party.”
