By Steve Rhodes
“A Tribune review of dozens of complicated public financing transactions shows [the city’s chief financial officer Lois] Scott has repeatedly selected firms with ties to her either to serve as financial advisers to the city or underwriters for billions of dollars in taxpayer-supported bonds,” the paper reports.
Scott, of course, is under scrutiny because she recommended that her boss, Mayor Rahm Emanuel, hire Amer Ahmad as comptroller. Ahmad, whom Scott had previously done business with, is now under indictment.
The Trib’s key findings:
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- The investment arm of KeyCorp, an Ohio-based banking company where Ahmad was working before Emanuel hired him, received $91,000 for work on a bond deal, after receiving fees in just one previous bond issue at City Hall, according to records.
- Two bond firms represented by former state officials who signed off on Scott Balice [her former consulting firm] deals with the state of Illinois years ago have received more than half a million dollars in City Hall business at Scott’s recommendation.
- A former senior vice president at Scott’s firm, DePaul University professor Marty Luby, was selected by his former boss for $100,000 worth of city consulting contracts.
- Acacia Financial Group, which picked up top Scott lieutenants when she left her firm, was paid $100,000 to analyze green energy plans for the Chicago Infrastructure Trust set up by Emanuel and Scott to identify city projects that could be funded with private investment.
- PFM Group, a giant firm that bought Scott’s business in 2011, was given the influential but unpaid role of financial adviser to the infrastructure trust. Two key members of Scott’s old firm now work at PFM.
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And, true to form:
“Scott has declined repeated Tribune requests for an interview since the Ahmad controversy surfaced.”
Gump Claypool
“CTA Chief Calls Proposal To Put Transit Agencies Under One Umbrella ‘Crazy’.”
“Power flows from the ballot box,” Claypool told the Chicago Sun-Times Editorial Board Monday. Voters’ ability to hold Mayor Rahm Emanuel accountable at the ballot box if they don’t like CTA decisions is the ‘model” governance structure, Claypool said.
Riiight.
Robbin’ Robbins
Developer conspires with village to kick poor people out of 100 homes so they can build a quarry.
Today’s Worst Person In Chicago
“The attorney charging $600 an hour to decide how much lawyers and other professionals should get paid for shepherding Detroit through its record bankruptcy gets his first batch of bills to review today,” Bloomberg reports.
“Robert Fishman, 59, of Shaw Fishman Glantz & Towbin LLC in Chicago, is the rare fee examiner to be appointed in a municipal bankruptcy. His job is to inspect and approve, or reject, bills that so far total about $19 million and may reach $60 million under contracts approved by the city.”
Really, Robert?
*
“This city is learning that it is expensive to go broke,” Monica Davey wrote for the New York Times earlier this month.
Even as it wrestles with the $18 billion of debt that has overwhelmed it, Detroit has already been billed more than $19.1 million by firms hired to sort through that debt, search for ways to restructure it, and now guide the city through court. That does not include more costs that the city is expected to bear for the support staff for its state-appointed emergency manager, and for another set of lawyers and consultants to represent city retirees.
“It’s just ridiculous,” Edward L. McNeil, an official with the local council of the American Federation of State, County and Municipal Employees, said of the mounting costs. “The only thing that’s getting done is that these people are getting paid big-time while the citizens of Detroit are getting ripped off.”
To be fair, Fishman is actually giving Detroit a discount – he usually bills $675 an hour.
His bill for August seeks $28,407.85 for his work so far, in addition to more than $14,000 for his law firm and $5,000 more for a consulting financial firm.”
There are limits, though: A judge ruled last month that expenses for booze, first-class flights and motel room movies would generally not be subjected to city repayment. Generally.
Celebrity Embeds
The Tribune has considered Kristin Cavallari’s tweets “Breaking News” two days in a row now.
The Obamacare Poster Boy Who Wasn’t
New Yorker writer caught in White House tweet charades.
Inside Michael Jordan’s House
Another celebrity auction means another special Beachwood report.
Here Comes ArchTV
Chicago Internet station readies for launch.
Meet The Pilgrim Jubilees
Chicago group revolutionized gospel.
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The Beachwood Tip Line: Heaven-sent.
Posted on October 22, 2013