The Mystery of Sanfelippo’s Taxicab Empire

It was back in July 2010 that reporter Tom Daykin wrote a story for the Milwaukee Journal Sentinel describing American United Taxicab Co. as Joe Sanfelippo’s “family owned business” operated by Joe and his brother Michael Sanfelippo. But Joe, the Republican state representative from West Allis, tells me that Daykin’s article was incorrect: “That company is owned by my brother Michael,” Joe says.

The curious thing is that, according to records filed with the state Department of Financial Institutions, which tracks Wisconsin corporations, the registered agent for American United Taxicab Co is Joseph J. Sanfelippo.

Nor is that all. Joseph J. Sanfelippo is also registered agent for six taxicab companies, which are believed to be owned by his brother Michael:  Joe Sanfelippo Cabs, Inc., American United Taxicab Company, Inc., G.C.C Inc., Frenchy’s Cab Company, Inc., Roy WMS, Inc., and 2 Sweets, LLC.  He is also listed as registered agent for Sanfelippo Auto Repair Inc.

Then there are the 160 or so city permits owned by Michael Sanfelippo, giving him control of about half of all cabs permitted in the city, and which has some cab drivers complaining he overcharges them to lease his taxis. The registered agent for all those permits, with an estimated market value of some $24 million, is Joseph J. Sanfelippo.

Why is Joe the front man for Michael’s entire empire? “It’s because my brother spends a lot of time out of state,” says Joe. “He is a Florida resident, not a Wisconsin resident.”

Not according to Michael. “I have dual residency,” he claims. The permits are registered in Joe’s name, Michael says, “because I’m out of town a lot. If I’m not in town, the company has to keep running.”

You could take your pick of either of these explanations, or go with a third suggested by city records. Deputy City Clerk Rebecca Grill, who oversees city licenses, says Michael made a request to add a permit which was denied by the city in July 2007 because of some citations against him by police. (However, the handwritten note on the city records says it was a “change of ownership application” which was denied.)

On June 28, 2007, the Milwaukee Police Department License Investigation Unit investigated Michael Senfelippo and found there were 11 cases of American United Cabs working in Milwaukee without a city license. Seven of the cabs were owned directly by Michael Sanfelippo’s cab companies, which were cited for operating in the city without a license. Four cabs were owned by other companies but were part of Sanfelippo’s American United dispatch system, which police cited for dispatching unlicensed cabs in the city.

When asked about this, Michael Sanfelippo denies all responsibility.  “These cars were permitted in West Allis. The drivers cabs are independently run and snuck into the city.” But seven of the drivers worked for Sanfelippo (whose American United company also provides cabs in West Allis) and all of the vehicles were part of his dispatch system.

Do these citations against Michael explain why the city cab permits remain registered in Joe Sanfelippo’s name? If Joe has no ownership in any part of his brother’s empire, he has certainly been very involved in it. Joe says he that while serving as a Milwaukee County Supervisor, he worked full time for American United. “Since being elected to the assembly, it’s taking more of my time so I’m no longer down at the cab business so much.”

“He does not own this company. He does not run this company,” Michael says of Joe. Still, when asked what he charges those who lease cabs from him, Michael says he’s not sure of the precise details and suggests I talk to Joe, because he is more on top of this information.

As for why the state assemblyman continues as registered agent for everything, Joe says that is up to Michael. “I don’t know when it will change,” Joe says. “That’s all Mike’s business, what he does with the legal process.”

The details of the Senfelippo business are of particular interest since a successful suit by the libertarian advocacy group, Institute for Justice, against the city permit system. Milwaukee Circuit Judge Jane Carroll ruled that the city’s cap on the number of permits violate the state constitution’s equal protection and due process clauses.

Cab drivers have complained that Sanfelippo’s domination of the market allows him to overcharge them for leasing cabs, but Michael adamantly denies this. “That’s pure hogwash,” he says. “If you’re a good cab driver you’ll make money.” And he denies that the gas card they must pay for (with gas provided by Sanfelippo’s company) overcharges them, as some drivers have charged. “They get seven cents off the pump price,” he says.

As for the push by the Institute for Justice to end the city cap on permits, Sanfelippo says he welcomes this. “I believe (the city) should open it up once and for all. Let ‘em open it up so I can apply for more permits. I haven’t applied for years because I refuse to pay what they’re asking.”

That’s quite a change from his previous comments. Back in September 2011, Michael Sanfelippo told the Journal Sentinel he was still buying cab permits and “the last couple” he bought were $80,000, far less than the $150,000 price estimated in a study by the Institute for Justice.

He also said that back when Milwaukee had more permits, no one could make a decent living and the quality of cabs and service suffered.

So does the city have enough cabs now? I asked him. “Some days they do and some days they don’t,” he says. The violations from 2007 documented by the police department’s License Investigation Unit portray Sanfelippo’s dispatch company directing cabs from West Allis to Milwaukee, which suggest there might have been a shortage of cabs in the city at that point.

As Sanfelippo tells it, his dispatch company is the key driver of business for cabbies. “Years ago I went down to Yellow Cab in Chicago and they were serving less rides from their dispatch center than we do in Milwaukee.” Chicago is a “hail town,” Sanfelippo says, where most customers hail their cabs on the street, while any Milwaukee customers hailing a cab “are few and far between.”

“You look at the color of all those cabs lined up at hotels, they’re Yellow Cabs,” he contends. “They want all the airport rides, the most expensive fares.”

Whereas the red American United Cabs are more likely to be on the move, responding to his computerized dispatch company, which gives a cabbie the next closest customer’s call as soon as his/her last ride is completed. “Rolling wheels make money,” he says. “Our guys if they keep moving will make money. The only value a cab has is if it has the orders (from dispatch) to sustain it.”

While Sanfelippo now seems to want the cap lifted, he also suggests the city should create a taxi-cab commission “like other cities do,” to monitor whether cabs are being properly run and maintained. The Common Council is still deliberating as to how to change the system, and Ald. Bob Bauman has called on consumers who use taxis to share their input at the next city hearing on this issue.

Short Take 

Beginning today, the Citizens for Responsible Government is running ads on radio stations WTMJ and WISN to rally people in favor of state legislation to downsize the Milwaukee County Board. The ads will culminate in a gathering at Serb Hall, which held a key rally organized by CRG in the 2002 campaign that helped drive former Milwaukee County Executive F. Thomas Ament out of office because of the infamous pension plan he passed.

CRG spokesperson Chris Kliesmet say that up to now, all the grass-roots organizing on this issue has been by liberals. “There are people on both sides of the issue,” he notes. “There hasn’t been a lot of conservative grass-roots action. I think it’s important for people to understand, just like with Ament, if you want change it’s up to us.”

Most observers have suggested the state legislation to downsize the board is likely to be passed by the legislature. That has a worried Kliesmet thinking Yogi Berra thoughts. “People think it’s all over. But it’s not over till it’s over.”

The CRG ads could perhaps backfire, identifying the issue as a conservative vs liberal one, when there appear to be some liberals who support downsizing. Or it could activate supporters and help dramatize the issue. Only time will tell.

Update 4:40 p.m. May 1: Kliesmet wrote to provide this clarification of his group’s aims: CRG supports reducing the cost of Milwaukee County Board governance by reducing board supervisor pay and operational budget.  It also supports shifting certain county board duties and powers to the county executive in order to return the county board to a part-time, policy-making board as it was originally envisioned to be when it was created by state statute.  CRG does not support downsizing the number of county board supervisors.