CHICAGO (CBS) — The City Council Finance Committee has recommend approving a $560,000 settlement for some city employees who complained about the racist and sexist rantings of their boss, the nephew of former Congressman Frank Annunzio.

WBBM Newsradio Political Editor Craig Dellimore reports aldermen gave a preliminary green light to the settlement at a hearing on Friday, sending the proposed settlement to the full City Council for a vote next week.

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First Assistant Corporation Counsel Leslie Darling said about three dozen Chicago Department of Transportation employees filed a harassment lawsuit, alleging racist and sexist behavior by CDOT supervisor Joseph Annunzio.

“There is corroborated evidence of extreme and outrageous racial statements, and actions allegedly committed in 2005 and 2006,” she said.

Annunzio allegedly went on racist and sexist rants against CDOT employees, and also allegedly attended an office party with a red tablecloth over his head, and called himself a “grand wizard,” a term used by the head of the Ku Klux Klan.

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Annunzio was fired in 2007, but the city’s Human Resources Board later overruled the city’s inspector general and CDOT. A Cook County judge and an Illinois Appellate Court panel later upheld his firing.

Darling said procedures for handling such harassment complaints have been improved since then.

Ald. Tom Tunney (44th) expressed disbelief.

“We have 26,000-plus employees, and it takes a lawsuit for us to figure out what the Human Resources Department is monitoring?” he said.

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The full City Council should take up the proposed settlement when it meets on Wednesday.