It just keeps on coming....

Fraud case targets grants awarded by President Obama’s friend

By CHRIS FUSCO & DAVE McKINNEYStaff Reporters / cfusco@suntimes.com September 19, 2011 2:26AM

Updated: September 21, 2011 10:01AM

The indictment of a Chicago nurse accused of diverting hundreds of thousands of dollars in taxpayer funds for her personal use has turned a spotlight on an Illinois state agency that awarded her money while it was headed by one of President Barack Obama’s closest friends, Dr. Eric E. Whitaker, records show.

Under Whitaker, the Illinois Department of Public Health awarded Margaret A. Davis — the former program director of the Chicago Chapter of the National Black Nurses Association — a no-bid contract and seven AIDS- and cancer-related grants that became part of her $500,000 cash-siphoning scheme, prosecutors say.

According to federal subpoenas and other records, Davis’ June 9 indictment by a federal grand jury in Springfield is part of a larger criminal investigation involving the health department and other state agencies.

Whitaker — who’s now a top executive at the University of Chicago Medical Center — has not been accused of any wrongdoing. He says he couldn’t have known about the problems the Davis indictment describes and that he and his staff acted quickly when they became aware of problems with other contractors.

Since 2009 and as recently as March, federal authorities have sent the health department a total of four subpoenas seeking information on a broad range of “faith-based initiativesâ€