Sordid ties to felons tarnish Chicago city police.

Byline: David Jackson

CHICAGO _ Red, white and green lights twinkled overhead as Chicago's police chief stepped onto the Brooklyn street.

Supt. Matt Rodriguez beheld the last strains of the festival of San Cono, a daylong pageant of processions, prayers and food that honored a humble Italian saint.

At Rodriguez's side was his worldly guide, the pal he treasured enough to call "a brother," convicted felon Frank Milito.

A North Side businessman whose maladroit English hardly masked his flinty intelligence, Milito had invested with a Chicago mob boss and come under scrutiny during a high-profile homicide investigation. Yet he also held court at his Wells Street restaurant, filling the plates and glasses of his many friends in law enforcement.

Rodriguez would be forced to resign within weeks of that 1997 New York vacation when he acknowledged a friendship with Milito in a Tribune interview. But Milito's financial and personal ties to Rodriguez were far more extensive than previously known, and Milito's access reached beyond the superintendent to other ranking members of the Police Department.

Since the days of Prohibition, when crooked cops and gangsters bloodied Chicago's neighborhoods and corrupted its courts, police Rule 47 has prohibited officers from fraternizing with criminals. The vast majority of Chicago police officers do their work and risk their lives with unheralded integrity. But Rule 47 has been openly defied and rarely, if ever, enforced.

Crime figures forged ties of money or friendship with certain Chicago police supervisors and officers during the last decade as key investigations drifted or were derailed, a Tribune investigation has found. Records and interviews show:

Even when confronted with disturbing details of the relationship between Rodriguez and Milito, the FBI and U.S. attorney's office reined in investigators for fear of alienating the Chicago Police Department.

Milito's relationships with police and county sheriff's officers tainted the probe into the 1987 slaying of Amoco Oil Co. executive Charles Merriam, in which Milito fell under investigation. At least one witness was hesitant to cooperate because Milito was a friend of Chicago's police chief, and some investigators privately questioned the integrity of the probe.

As the investigation bogged down, Milito and a Chicago police officer invested with a high-ranking sheriff's officer on the Caribbean island of Curacao, where they bought shares of a crime syndicate-linked hotel and casino.

The sordid relationships between police and criminals ranged from the top of the department to the rank and file:

A cluttered Northwest Side tailor shop was a hangout for police and crime figures for more than two decades, according to internal police reports and interviews. Top police officials were seen there with a criminal during a 1994 internal police surveillance.

A crime syndicate figure employed tactical officers for security at his adult bookstores. Those officers also were investigated for the million-dollar rip-off of a drug courier.

In a prepared statement, U.S. Attorney Scott Lassar said, "Police corruption has been and continues to be a high priority of this office."

On Oct. 19, Lassar's office indicted retired Deputy Supt. William Hanhardt for allegedly leading a band of mob-linked thieves who robbed jewelers of $5 million between 1984 and 1996. The charges against Hanhardt, who had influence over personnel decisions and access to internal police information, hint at the all-too-common bonds between cops and criminals, records and interviews show.

Three years ago, just days before Milito's vacation with Rodriguez, a Chicago police official handed Rodriguez a sheaf of internal police reports…