By Mary Wisniewski

CHICAGO (Reuters) - Prosecutors on Thursday charged two former Chicago area politicians with accepting kickbacks in return for making sure a public hospital bought bandages from a favored company, the latest corruption case in a city known for its unscrupulous politicians.

Former Chicago city councilman, or alderman, Ambrosio Medrano, 58, who had been convicted of bribery in the 1990s and served two years in prison, and former Cook County Commissioner Joseph Mario Moreno, 59, were charged along with three local businessmen.

James Barta, 70, the owner of Sav-RX, a Fremont, Nebraska-based company, was also charged with Medrano and another Barta associate with a scheme using bribes and kickbacks to get business from an unnamed hospital system outside of Illinois.

In a third scheme, Moreno allegedly took a $5,000 bribe to ensure the development of a waste transfer station in the Chicago suburb of Cicero while he sat on the town's economic development panel.

"Public officials who solicit and obtain bribes, and private individuals who pay bribes, undermine trust in honest government," Patrick J. Fitzgerald, U.S. attorney for the Northern District of Illinois, said in a statement. "The defendants in these cases are alleged to have done just that."

Moreno and Medrano allegedly agreed to take kickbacks for using their influence to ensure that Stroger Hospital, a public hospital in Chicago, buy bandages from two agents for a disabled veterans-owned business, according to the U.S. Attorney's office. Moreno later sponsored a county ordinance to benefit disabled veterans-owned businesses, prosecutors said.

Barta and Medrano, along with an associate of Barta, allegedly agreed to bribe an undercover Federal Bureau of Investigation agent and a fictitious hospital official to do business with Sav-RX, prosecutors said. Barta made a $6,500 payment to the FBI agent last week, prosecutors said.

Chicago and the state of Illinois have a long history of political graft. Numerous alderman and city officials have been convicted over the years and two consecutive governors - George Ryan and Rod Blagojevich - are serving sentences for improper actions.

Medrano and Moreno appeared in federal court Thursday to hear the charges against them, along with one of the Chicago businessmen charged with a crime.

Moreno's attorney, Richard Kling, said his client is "aware of the seriousness of the charges" and that they will be "resolved in court and not in the media."

Medrano's attorney, Gal Pissetzky, said he is working now to get his client out on bond. "We will be fighting that case in court," Pissetzky said.

Barta could not be reached at his offices Thursday afternoon.

(Reporting By Mary Wisniewski; editing by Greg McCune and Todd Eastham)