About 40 percent of the 170,000 cars towed in Chicago in 2003 ended up being sold in an exclusive contract to a towing firm that is under investigation by federal authorities, according to a report Wednesday in the Chicago Sun-Times.
The city paid Environmental Auto Removal to tow more than 129,000 cars last year. Almost 70,000 cars went unclaimed, and City Hall sold them to EAR for $4.3 million.
The city treats all the cars like junk, whether the car is a burned-out hulk or a luxury vehicle. The city sells those cars to the towing contractor at scrap prices. The towing company pays the city up to $130 for each car, except abandoned cars, which go for $15 apiece. But some angry car owners say their brand-new cars were sold for almost nothing.
Many cars that are too valuable to be scrapped end up being sold for considerable profit by Environmental Auto Removal, with the city getting little or no return. It turns out that tens of thousands of people, particularly the poor and elderly, cannot afford the city´s escalating fees to get their cars back, the Sun-Times found in an investigation of the program.
Another company, Triangle Towing and Recycling Network Inc., wanted to give the city a piece of the profits from all the car sales -- a cut of about 70 percent. The city rejected that offer last year, saying Triangle wanted to charge it more money for towing cars, resulting in a bad deal for the city and car owners.