Former Mob Bookie Re-Hired as IDOT Supervisor, Taxpayers Shoulder $130K in Back Pay

Chicago - FOX Chicago's investigators have learned that the state of Illinois has been ordered to re-hire a former mob bookie, and cut him a check for more than $100,000.

Ralph Peluso was fired in 2010 after we started asking questions about how he landed on the state payroll.

He is now back on the job, thanks to the powerful Teamsters union.

Peluso allegedly took plenty of bets during his long career as an outfit bookmaker. But even he may be stunned at how he beat the odds and scored a major payday at the expense of Illinois taxpayers.

The man who was supposed to kill Peluso certainly can't believe it.

"It blew me away!” Frank Calabrese Jr. said. “This is something that the people of Illinois have to look at."

Frank Calabrese Jr., spoke with FOX Chicago News in an exclusive interview via Skype from his home in Phoenix, Ariz.

He said Pelsuo was a key part of his father's outfit street crew in the 1980s and 1990s. Peluso paid Frank Calabrese Sr. $1,000 a week in street tax, in return for the mob muscle to run one of Chicago’s largest bookmaking operations.

"He handled juice loans. He handled gambling,” Calabrese Jr. said. “He was our go-to guy for politicians."

Peluso - nicknamed "Curly" for obvious reasons – later fell out of favor and Calabrese Sr. wanted him killed.

His feelings are clear in this prison conversation secretly recorded by the FBI.

"Gotta watch Curly,” Calabrese Jr. said. “Curly's a very treacherous son of a b****."

Peluso was scheduled to testify against Calabrese Sr., in the historic family secrets mob trial in 2007. But he got cold feet at the last minute.

Still, Peluso's name surfaced 24 times during the trial, which led to the convictions of several longtime outfit leaders for nearly 20 murders going back decades.

Just months after the trial ended, Peluso quietly landed a $76,000 a year supervisor's job at the Illinois Department of Transportation.

In 2010, FOX Chicago broke the story of the ex-mobster's state job and Peluso was fired for "conduct unbecoming a state employee."

Well, guess who's back on the state payroll?

"I'm shocked,” Calabrese Jr. said. “I'd love to know who's backing this guy."

The teamsters are backing Peluso. They appealed his termination and won.

According to IDOT, an arbitrator recently ruled the state did not have "just cause" to fire Peluso. The arbitrator ordered him reinstated to his job, including back pay totaling more than $103,000.

IDOT said in a statement that it is disappointed: "The department aggressively defended its position and strongly disagrees with the arbitrator's decision."

"Why would the collective bargaining agreements protect someone like this?” Rep. Ed Sullivan asked.

The Republican state representative is asking for an investigation into Peluso's re-hiring, as well as how the ex-mobster got the job in the first place.

"With unemployment at ten percent,” Rep. Sullivan asked, “how does someone with this questionable background get a job with the state of Illinois?"

The man whose father wanted him to kill Peluso said there's a simple explanation:

"That's called clout,” Calabrese Jr. said.

FOX Chicago managed to reach Peluso by phone at the IDOT maintenance yard in Schaumburg where he works. He said he had no comment and hung up.

The teamsters aren't talking, either. Repeated calls to local 916 in Springfield, which appealed Pelsuo's firing, have gone unanswered.