Because mayors of Chicago have been known to die in office, the city has a need for a statutorily designated successor. But because the vice mayor has no duties besides waiting in the wings, his office would seem to have no need for an annual budget of more than $100,000.

But that’s the budget that’s allocated to the vice mayor’s office, and in recent weeks, the Web site Lake Effect News has posted two long articles examining that allocation. The vice mayor is 50th Ward alderman Bernie Stone, and the March 26 story, “Another City Council Stealth Budget?” reported that his expenses as vice mayor “routinely” run some 15 to 22 percent over that budget. The beneficiaries of those expenses, it added, have included a variety of friends and relatives of other aldermen. The April 1 story, “156 Paid out of Vice Mayor’s Budget,” named more names, asserting what it called “a distinct pattern of considerable overlap and frequent juggling of payees between City Council accounts, including many instances of possible double, triple and even quadruple dipping.” It said city documents “showed over 1,300 expenditures that were made to 156 individuals throughout the city’s 50 aldermanic wards between 2006 and late 2009.”

The stories, both by Hugh Devlin, were provocative but clumsily written and hard to follow. Like a lot of low-budget, new-media journalism, they could be interpreted as flares sent aloft to alert the mainstream media: “Good story possibility here—come running.”

That was the effect Devlin’s reporting had on at least two other journalists who read it. Patrick Boylan runs a site of his own, the Welles Park Bulldog. When he spotted the name of Monica Schulter—the daughter of his local alderman, the 47th Ward’s Eugene Schulter—in the list of vice-mayoral budget beneficiaries, he called the alderman for comment. He didn’t get it, but he posted a story anyway, scrupulously giving credit where it was due and linking to Devlin’s original.

Aaron Stern, a paid intern serving as a producer for WTTW’s Chicago Tonight, read Devlin, talked to him, and then began working up a story of his own, which aired the evening of April 13. The next morning Boylan called me. He was surprised that the WTTW report hadn’t touched on Devlin’s main point—that the vice mayor’s money was being spread around the aldermen’s families and cronies. And he was ticked that Lake Effect News had gone uncredited. Host Phil Ponce asserted in his introduction: “Chicago Tonight has found a little-known city office that has a budget and staff, but no actual ongoing duties.”

“WTTW didn’t find that,” Boylan said. “It was Lake Effect News.”

Lake Effect News is an archetypal example of hyperlocal new media launched by orphaned veterans of the MSM. Its founder, Lorraine Swanson, was the last editor of the News-Star, a Lerner weekly that changed hands more than once, and was shut down in March 2009 by Wednesday Journal Inc. sold in March 2009 by Wednesday Journal Inc. to Inside Publications. Passionate about neighborhood journalism, Swanson launched Lake Effect News, which covers the News-Star‘s old lakefront neighborhoods and the neighborhoods to the west that had been the domain of the Booster, another Lerner weekly abandoned by Wednesday Journal.

Writing in January about the launch of another local site, Central Square Ledger, I asked Swanson how she was doing. “I probably put like 14 hours a day into it,” she said. “I’m scraping by. I do all my eating at home. I’ve gotten to be a much better cook.” And in five years, what did she dream her site would become? “I think it would be great if we had a full-time writer or two and maybe a sales person.”

She’s a long way from that now. “You know, I wrote those stories for free,” says Devlin, who supports himself as a computer programmer. “I got a falafel sandwich out of it. Lorraine bought me a falafel sandwich.” The sort of wonk who reads city budgets, Devlin spotted the line item for vice mayor and last November FOIA’ed the Office of Management and Budget to find out where the money was going. It took a month of applying “elbow grease,” as Devlin describes the FOIA process, but the city finally turned over the information.

The next decision was what to do with it. Swanson and Devlin discussed turning it over to the Tribune, but when the Trib began pounding the city over what it called a “stealth payroll” controlled by the City Council Finance Committee that was enriching the aldermen’s friends and relatives, they decided to run their story themselves. “This was the other shoe, another account no one’s looked at yet,” Devlin told me. “We thought, ‘We have to contribute to this dialogue.’ It lit a fire under our butts.”

As for Boylan, anyone thinking of launching a hyperlocal news site should ask him out for a cup of coffee first. In January Boylan, a freelance reporter, and Mike Fourcher, a political consultant, launched the Center Square Ledger to cover Lincoln Square, North Center, and Ravenswood Manor. The partnership didn’t last; Fourcher relaunched the site as the Center Square Journal and Boylan is now competing against him with the Welles Park Bulldog.

Boylan supports himself by freelancing for publications other than his own. “The weekends are critical,” he tells me. For example, two Saturdays ago he spent the day out in the neighborhoods covering stories for his site while his wife, Jane Rickard, took pictures for it at other events. In the evening they met up and drove to Milwaukee together to cover a Chicago Wolves game for the Tribune.

The next day they were at it again. “Today someone’s planting a tree,” Boylan told me Sunday morning. “That’s sort of our life.”

WTTW is struggling too—when Chicago Tonight correspondent Rich Samuels was dropped at the end of last year, Rob Feder reported that sources blamed a “seven-figure shortfall” in the station’s budget. But from the perspective of a Boylan or a Swanson or a Devlin, WTTW might as well be Fox News. So the whiff of self-aggrandization stung. “I’m still sore about the phrase ‘Chicago Tonight found,’ Devlin told me a few days later. “That one word, found, is sticking in my craw.”

“I think we’re talking about two different sets of ethics,” says Boylan. The traditional response of mainstream media to a good story by the competition has been to try to recover the story and advance it, if possible, while giving the competition not an ounce of credit. The ethos of new media is far more collective: they’re all in this together, and when one breaks a good story that the others pick up, everyone benefits if the originator receives not only conspicuous credit but a link.

By MSM standards, WTTW’s performance was mixed. Lake Effect News went unmentioned by reporter Ash-har Quraishi, though he did name Devlin in a postscript at the end of his story. But Devlin’s been dropped from the version of the report you can watch on the WTTW Web site, and he never made it into the written version of the story, also posted there. But there is a link to his stories on the page.

The WTTW story was nothing much. Swanson says it struck her “as a story about a cute little old man who’s the vice mayor. They didn’t even ask him about what was in our stories.” Quraishi was content to relate the office’s history, tell us about its budget and lack of duties, and give the incumbent, Bernie Stone, a chance to say he pays two staffers out of the vice mayor’s budget and keeps them busy. “You use your staff to do whatever you have to do,” Stone said. The apparent contradiction between this and Devlin’s finding of “expenditures” to 156 different people wasn’t noted, much less explored.

An important thing to know, however, is that WTTW not only paid attention to Devlin’s financial reporting but spotted an error in it. In one of his charts Devlin had switched two columns: expenditures and appropriations. The mistake compromised the story sufficiently for WTTW to back off, though nobody at the station wanted to discuss the details on the record. When he finally found out from Stern about his mistake, Devlin was chastened. “So he was justified in not rushing ahead with the financial part of the story,” he told me. “It turned out being slow and careful paid off.”

Chicago Tonight‘s executive producer, Mary Field, defends the WTTW story but assures me she appreciates the efforts of Devlin and Swanson. “They’re the ones filing the FOIAs,” she says. “They’re doing that for all of us.”

In which case, Boylan argues, tiny new media sites like his own and Swanson’s need more from the MSM than mere appreciation. They need muscle. “The $100,000 line item isn’t important. It’s how they used it,” he said. “I went to Schulter to ask for comment. He hasn’t called me back on anything. He’s shut me down.”

Ideally, Boylan went on, “if he doesn’t want to talk about it, somebody else will get him to talk about it. The blinding light of WTTW or the mainstream media will be incredibly more blinding and effective than what Lorraine is able to do. Somebody has to come and follow up. It’s important for local Web sites to be recognized. When they do good work they’ve got to be recognized because a lot of the time they’re going to be stonewalled and—”

The idea was clear, but he was too worked up to express it. In other words, I offered, if the mainstream media ignore you, it’ll be a lot easier for City Hall to ignore you?

“Thank you for putting it in those words,” Boylan said.