When the cops originally spoke to that particular person he had an alibi which was given by his boss and two of the waitresses.
The confession was not a confession to police but rather to the 2 journalists. They tape-recorded the conversation and gave transcripts to the DA and the cops. However, when playing the tapes for the parents, the journalists indicated that it was unlikely anything would ever come of it. The case had proved to be an embarrassment to the authorities and they wanted it to die down; arresting the real killer would not have helped since the parents had pointed a finger at them from the very beginning. Also, the whole point of pursuing the parents was to help get Daley elected and now that he was, he did not need this high profile case. The journalists also said that he would likely have been acquitted because of his mental illness.
FYI- that last fact is not true. After Hinkley's assassination attempt of Reagan in the early 80's, the mental illness defense changed. Not guilty by reason of insanity is only possible if the person knew he was doing wrong at the time of the crime. Even if the suspect had been found innocent by reason of mental illness for the actual murder, he could have been found guilty of concealment after the fact, interfering with a federal investigation, etc.
Although the DA never pursued anything against the suspect, the parents could theoretically sue for a wrongful death I think.
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