Welcome to Chicago Newsroom

Welcome to the Chicago Newsroom home page and archive.

Scroll down to see this week’s show and all previous shows.

The big idea behind Chicago Newsroom is that we assemble a small group of involved, knowledgeable people around the table and we yak about the week’s local news. Most often we tap journalists, but you’ll also find historians, political activists, academicians and newsmakers in the mix, too.

Now you can subscribe in iTunes. Just visit the right column and choose the link for either the video or audio only version of Chicago Newsroom. You can watch the show as a stream, download individual shows, or – best of all – subscribe. As a subscriber, the show will automatically download every Thursday right into your iPod or mp3 player. Join up today!

And don’t forget – you can watch the show every Thursday night at 6:30 on CAN TV 19.

It’s repeated on Fridays at 1:30 PM on CAN TV 19, and again on Saturdays at 7 PM on CAN TV 21. CAN TV is available to all Chicago subscribers of Comcast, WOW and RCN.

Posted in Uncategorized | Leave a comment

CN August 27, 2015

 

Wanna spend a half-hour talking about the Illinois budget mess and the neutron-bomb that is the Illinois pension situation? No? Who could blame you?

But this conversation’s a little different, because it’s with a guy who was there. For pretty much the whole thing. A reporter who covered the Thompson 3% compounded COLAs, the Edgar Ramp, the Ryan Buy-Out. The Blagojevich borrowing and the Quinn/Madigan “pension reform” that got killed in the Illinois Supreme Court.  And the unions who went along with it all. And the City officials who accessed the money to build new, gleaming schools and maybe pay off a few of their own pensions.

Dave McKinney tells us that, in essence, nobody who ever got involved with the pension mess has clean hands today.

For 19 years, McKinney covered the goings-on in Springfield as the Sun-Times Springfield Bureau Chief. He’s not with the S-T any more, but in recent weeks he’s done some excellent work for Crain’s and for Chicago Magazine, in which he laid out the whole sordid 30-year history of under-funded pensions – and he attempts to pin a letter grade on Bruce Rauner.

No episode of Game of Thrones to House of Cards has ever depicted the level of deceit, ignorance, pandering and raw power-politics as this. And the best part? The folks who make these decisions know they won’t be around a generation later when the bills come due.

Ladies and Gentlemen, we present a full, unedited transcript of today’s conversation.

 

Ken:                Dave McKinney for the first time is sitting at our table and I am thrilled to have you here, David. Good to have you.

Dave M:          Thanks Ken.

Ken:                So, there is a vast amount to cover, but I thought I would begin the program today by quoting you to yourself.

Dave M:          Okay.

Ken:                This is from your Crain’s piece which we will talk about later.

For more than a quarter of a century governors and state legislatures, republicans and democrats alike made a series of financially toxic moves in the pension system for state employees and public school teachers. Proposals to fix the perennially underfunded pensions were based on botched calculations or no calculations at all. They were driven by misguided rationales that weren’t fully vetted. Everyone was to blame yet few people accepted the responsibility, even the public sector Unions that stood to lose the most sometimes embraced those choices.”

Dave M:          Well that spells out 25 years of dysfunction in the state pension systems. And it’s an issue that a lot of Illinoisans if they’re not one of those people getting a pension or in line for one have a hard time getting their arms around it. We’re talking about a $104-billion problem right now for the state and it gets worse every year. And what I saw – I went back and I looked at four or five critical moments going back all the way to the late 80s where time after time after time these decisions get made, they are doing them without really any hint of what the long-term ramifications of them might be. The Unions as you mentioned are sometimes going along for the ride and supporting these things. Pension holidays for example…

Ken:                Are they getting little sweeteners to help them along?

Dave M:          Yeah. But in the end what we see is this problem getting worse every year to the point where now it’s crippling the state and will continue to do so for the next 30 years. One out of every four state dollars are going to be going to pensions.

Ken:                What’s most fascinating to me about this is the narrative of course, that we’re all asked to swallow, that the cause of all of this is those greedy teachers and cops and social workers and firefighters and all these public employee people who have caused this to happen. Now it may be that their leadership was complicit in it, but the blame is not there. The blame is in pandering politicians who in order to get re-elected are willing to throw these different things on the fire.

Screenshot 2015-08-27 18.34.45

This is the coolest thing of all, this piece in Crain’s. This is a graphic (copied above) that I’m sure you can’t really see all that well on television, but this is kind of where the unfunded pension is over the years and this is the Thompson years and so forth. Here, my friends, is the Edgar Ramp. Tell me about the Edgar Ramp. Governor Edgar is supposed to be one of the smartest and cleverest governors we ever had. How did he commit this to us?

Dave M:          Well this was a scheme… I called it a scheme, it was a plan that Edgar and House speaker Michael Madigan came up with in 1994. And at the time to their credit it was viewed as a responsible way to finally get this pension problem under control, because for years, especially under former Governor Thompson when it came time to put together a budget and X-amount needed to go to the pensions they would always short the pensions and put it towards schools or whatever else. And so in 1994 they came up with a plan that set out over 50 years to get these pension systems at 90% funding, and that involved basically about a 15-year ramp-up where these payments would gradually increase to the point where finally in the early to mid 2000s they would start going up. That’s the ramp part that has just thrown the state on its back now.

Ken:                But it’s important though from the way I understand your description of this, the next few years in 1994, those adjacent years when these guys would all still be in office, that ramp didn’t go up very far. It was pretty flat.

Dave M:          Well it was pretty flat and there were some who would say that was by design. It helped them manage a budget in the late 90s and early 2000s without having to commit enormous sums of money. But in the process, the Supreme Court opinion in May that tossed out Senate Bill 1 pointed to the Edgar Ramp as one of the main causes for our dysfunction. And effectively what those 15 years did, it shorted the pension systems what they were really owed. I mean in the mid to late 90s I think it was like about $600-million the state was committing to the five pension systems. You know now, this year we’re on the hook for $7.6-billion.

Ken:                So it’s fair to say that Edgar’s policies coughed up this hairball onto our carpet in the last few years. I mean that’s not an unfair statement, right?

Dave M:          Well I mean that ramp is what’s still in place. I mean every year we’re following the dictates of that ramp and what the dollar amount every year is prescribed at. But what Edgar would say and in his defense he would say that there were a series of actions after this ramp was put into place that changed the whole equation. Things like pension enhancements, things like the early retirement program you alluded to under George Ryan. Pension holidays under Blagojevich, these things should have necessitated that ramp being recalibrated and it never happened.

Ken:                But it wasn’t, so we ended up with it. I’m just so intrigued by all of the different levels on this. We kind of started in the middle but we really needed to start with the great Governor Jim Thompson, right, because Jim Thompson gave us the 3% compounded raises that we keep talking about. I mean everybody says these raises, if compounded, look what they’ve compounded to over the last 20-25 years. That was a Jim Thompson creation. Why?

Dave M:          It was something the Unions were pushing at that point. They wanted to basically do more to protect the retirement annuities of their members which is exactly what they should be doing. At the time, though I went back and I looked at the floor debate, this preceded my time in Springfield, but I went back and I looked at the floor debate in both the House and Senate and really nobody was talking about what this might cost. And there was only as I recall one legislator who stood up and said, “Hold on guys, this is going to really be an eye-opener once we get it in place. It went into effect anyway. Thompson signed it and a short time later there was an estimate that came out I believe in 1990 that said that the cost was about a billion-3 of this, and that figure has not been updated since then, but I would just about guarantee you that that number is way out of whack. It’s probably much much more than that.

Ken:                Now you got to interview pretty much all of these guys didn’t you?

Dave M:          Yeah.

Ken:                For this piece you wrote for Crain’s Thompson told you in essence I just had no idea it would be so expensive.

Dave M:          Well yeah, I asked him particularly if he remembered anything about this pension omnibus bill that came to his desk in 1989 and in particular the compounding cola. And he’s like, “I don’t remember the cola part, I just don’t. It’s been so long ago I can’t remember it.” But he pointed out, “If I would have known it was going to cost a billion dollars I would have vetoed it.” And so there’s the first example we have of somebody not having numbers in hand when they make a decision about something that winds up costing the state a great deal of money.

Ken:                And it is just the way of legislators everywhere. It happens in the City Council with the parking meter thing. When these big things come in they are given to you 12 hours before you have to vote. Most of these legislators let’s face it aren’t really sophisticated in these ways. They just look at it. The leadership tells them you’ve got to vote for this, they vote for it.

Dave M:          That’s right, and you know I found that time and time again that the numbers that were generated ahead of these either they didn’t stand up or the numbers didn’t exist at all. And you know if you fast forward from Thompson into the Blagojevich years I started this piece looking at a bill that passed in 2005 that allowed the state to skip two years of pension payments, make partial payments.

Ken:                With the City’s complicity. Everybody wanted that, right?

Dave M:          Well they wanted it. It was part of a bigger thing designed to save the state money on pensions. There were other things in there that took aim for example at school districts that would award school administrators late in their careers these massive pay increases and then the state would have to pay the pension based on those. So they aimed to cut back on that, but these pension holidays I was really curious about what did they cost? Because that wasn’t ever spelled out ever that I remembered. And so I went digging and I found that on the floor the sponsors of this legislation said the whole package would save the state about 30 or $35-billion.

Well two or three months later the research arm of the General Assembly called COGFA they drew up some estimates that said that actually the whole thing was probably going to cost the state close to a billion dollars, and in particular these pension holidays along with clean-up from the Ryan period could wind up costing as much as $6-billion.

Ken:                It’s unbelievable. And we really have to talk about George Ryan and this early retirement plan thing. I worked for the City at the time and this was the big thing, and we can’t forget Mayor Daley’s role in this because he and George Ryan were connected at the hip. I mean they agreed on everything. And this was George Ryan’s idea which helped Daley unload a lot of people off the City payroll and George Ryan was doing the same thing with state payroll, right?

Dave M:          Well this was aimed strictly at the state. I mean this is something that both Ryan and Madigan embraced. When it came in late 2002 it’s a point if you remember it’s when George Ryan when his political career was really in ruin because of the license-for-bribes scandal and the federal investigation of him. It was clear at that point that the democrats had won the right to redraw the legislative boundaries and would take control of the legislature, and it was pretty clear that there probably would be a democrat running the governor’s office.

And so all that being told, there were all these government employees that that had gotten their jobs under republican administrations – Thompson, Edgar, and Ryan. And what this packaged aimed to do was to give those folks a way out. It came at the time too, post-9/11, where there was a true revenue drain and they justified it saying look, if we can clear the payroll of 7,000 people it’s going to cut down our operating costs and thus save money. Never minding the fact that you know by putting those people under the pensions it was going to increase it.

Ken:                The people who are 55 years old and would be on it for maybe 40 years.

Dave M:          This allowed people to retire as young 50. What it did it proved so popular that the estimates were way off. You had people taking out home equity homes to buy enough service credits and time credits to get into this. And so this plan to knock 7,000 people off grew to like 11 or 12,000 and it wound up being about a $2-billion boondoggle for the pensions.

Ken:                Just another one.

Dave M:          Right.

Ken:                I do remember – my view is more from the City side of course, but I know that I was working in the mayor’s office at the time and when that was proposed I was 50 probably, just a little over 50, and if I had been able to come up with $22,000 I could have bought whatever it was, however many years it was that would have allowed me to have retired at full pension. And nobody – nobody stopped to think about wow, is that going to cost our children some money somewhere down the line? It’s insane. It’s just absolutely insane the way it was being done. But as you say, in the state it takes on an even additional level of sinister-ness because it’s actually political. It’s like trying to save some of the folks that would lose their jobs otherwise.

Dave M:          I mean it had a twin purpose. And don’t forget I think everybody’s attitude about money at that point in time was a little different than it is today. Because I mean even though we had 9/11 and the revenues dried up after that, you know we were coming off the late 90s and the housing boom, and so people just thought that money was out there.

Ken:                Money was everywhere.

Dave M:          It would just all take care of itself.

Ken:                And I think Dave that is such an important issue to help put this in perspective, because it is true, in the late 90s and all the way into the 2000 era the tax revenues were going up like crazy. The housing boom was in its zenith and it was possible to kind of think it was going to go on like that forever. The same thing in your personal life right? If you bought your house for $150,000 and suddenly it’s worth $200,000 and you know that soon it’s going to be a quarter of a million dollars.

Dave M:          Oh exactly. When Edgar left office in 1999 I mean the state had a surplus of over a billion dollars. I mean contrast that with what we have now.

Ken:                So let’s also bring our beloved Governor Blagojevich into this because Blagojevich introduced this new concept of borrowing as revenue. It was like oh we have a huge hole, I’ll just borrow $10-billion that will…and it did, it staved it off for a couple of year didn’t it?

Dave M:          It did. They wound up putting I think about 7.8-billion of that 10-billion into the pension systems and almost overnight it changed the unfunded ratios from like 49% to like the low 60s. So for a couple of years you could see the effect of it, but then they used that spike upwards as justification then to get into that pension holiday thing that we talked about a little bit ago.

And one thing I didn’t mention about that was that here we are, you know that pension holiday in 2005 winds up coming onto the laps of the legislators two days before adjournment, no clear-cut estimates on how much it’s going to cost. And then kind of the cherry on the sundae is there were so many things on the docket as there always are at the end of session that they limited the debate with a stopwatch to talk about what eventually could become a multi-billion dollar expenditure. So I mean that gives you an idea of government at work.

Ken:                I want to talk about a few other things in that, but this just takes me off on a little diversion. The now infamous 9% pension pick-up. When did that happen? Do you know? Was that before even Edgar and Thompson?

Dave M:          You know what, that one goes back a ways. I didn’t really delve very deeply into that one to be honest with you, so I need to spend a little time looking into the history.

Ken:                It’s been there for a very long time is the point.

Dave M:          Correct, it has been. Absolutely.

Ken:                Is it reasonable for the CTU to say taking whatever it is, 7% of that away is the same thing as a 7% pay cut? Is that a logical thing to say?

Dave M:          I mean if you’re them it’s absolutely a logical thing to say. But I mean there’s an interesting thing and I think the Tribune had a piece a few days ago that looked at some of the suburban school districts and how it’s written into all the teacher contracts that the various school districts are going to be paying the employer share of that and not passing it on to the teachers, so it is a bit of a double standard.

Ken:                It is especially – I have lots of friends on CTU who are not going to like hearing this, but when the Unions say ‘hey, this is all on the government because we made our payment every single time. It was the government that was on pension holiday.’ Well yeah, except that that was taxpayer money that was coming in to make those pension payments. You weren’t paying them out of your pocket.

Dave M:          That’s true, that’s true. You know the thing with the Unions is they obviously want what is best for their members, but when it comes to the long-term security, the pension systems what I found in this piece is that desire often conflicted with the desire to have money up front to put into classrooms, to put a roof on a building. I mean those things seem to take precedence over the…

Ken:                And that’s what makes this so complicated and not just so black and white that there are just a bunch of villains here. Because during some of these years I mean if you think about it there was an astounding building boom in Chicago for the public schools. Beautiful new buildings were built and a lot of older buildings were rehabbed, so there was a lot of money spent, appropriately so, for this. But again, what it comes down to is well if we could just put that little pension thing off for another 20 years we could use that money now.

Dave M:          It’s so easy to do and you can understand why that behavior happens if you’re on a state legislature or city council or whatever because you’re not going to be around when the bill comes due. And what you have to face is that immediate need to make sure the school is open on time or that people have a contract to work under.

Ken:                So talk to me about Rahm Emanuel. I’m baffled by Rahm Emanuel and all of this. He appears to be engaged but then I’m not seeing – again, this is easy for me to say, but I’m not seeing what appears to me to be clever leadership on this. We think about him as being the guy who was with the DNCC who was the arm twister in Congress who could make all things happen and he’s reminded us many times of how effective he was. So why isn’t he more engaged in Springfield and saying – this is what you are going to do?

Dave M:          Well because I think he still doesn’t have the gravitas that a Richard J. Daley had. Richard J. Daley could order up something like that.

Ken:                Richard J. Daley?

Dave M:          Correct, and you know to some extent Richard M. Daley, but Richard J. Daley set the template. You know and Emanuel during my time there Emanuel came to visit I believe one time. And even Richard M. Daley would make it a habit every year of at least coming down once in May and opening up a big tent, Taste of Chicago tent. It was really kind of the goodwill, and with Rahm it’s much more kind of behind the scenes, on the phone, meetings in his office, stuff that we don’t see out in the open often.

Ken:                Does this lead you to a conclusion that he’s decided that it’s just not possible and he’s not going to spend political capital on it?

Dave M:          You mean on the pension question about how to solve it?

Ken:                Yeah.

Dave M:          You know in terms of the state pension problem I would guess he views that as somebody’s else’s problem. He’s got his own problems with the various pension funds on his watch, and what’s pretty clear is as long as there is the dysfunction in Springfield between Governor Rauner and Mike Madigan, you know Rahm has to be on the sidelines like the rest of us. I mean those two have to get on the same page before there can be any kind of movement on some of these other problems that the state faces including local pensions.

Ken:                I just thought that he was going to be the perfect logical connective tissue between Rauner and Madigan, that he would be able to sit them both down and just say, “Shut up, do this.” Apparently that’s not the way it works though.

Dave M:          That would be nice, but I mean don’t forget in Rauner and Madigan you’re dealing with two exceptionally strong-willed people, and Rahm is that way too, but Rauner is not accustomed to taking orders from anybody, nor is Madigan.

Ken:                Right. None of them are. None of them have ever had the experience of having somebody say no.

Dave M:          Right.

Ken:                Especially our delightful governor, which again is sort of like the whole thing about him leading toward…just bankrupt it, because that’s the way he handled businesses, right. Come in, bankrupt it, you take the money out, you reconstitute things and you take the profit out and you move on.

Dave M:          Yeah.

Ken:                And guess what, this doesn’t work quite that way.

Dave M:          Yeah.

 

Screenshot 2015-08-27 18.40.29Ken:                You did another piece recently for Chicago Magazine, grading the governor, and I just thought it was… It’s been about a month and a half ago.

Dave M:          Yeah, August.

Ken:                So maybe your grades have changed, but you gave the governor a C+ average although I find that kind of deceptive when you add all the things in because you gave him a D for fixing the budget, a D for playing well with others, a D for reforming pensions. The only thing he got an A on was taking on the Unions.

Dave M:          Well he deserves an A for taking on the Unions.

Ken:                Yes he does, I agree.

Dave M:          He came into office at every opportunity saying he was going to do that. Now has he succeeded in getting concessions from them? Has he succeeded in changing the landscape much with them? No, not really, but I think what you have to measure any governor on is what’s the product. And at that point in time when I was looking at him, you know I went back all the way to Edgar in 1991 and the first six to seven months in office, that’s that honeymoon period that new governors have and goodwill is out there, and I just looked at kind of what did they all get. And when I did the piece for Chicago Magazine at that point Rauner the only thing really that he could point to was he had kind of patched together a fix to the fiscal ’15 budget and he had signed off on the legislation for the Obama Library in Chicago. Two things that in the broader scope of our problems don’t seem to amount to much. You look at other governors you’re talking multi-billion-dollar capital programs. You’re talking about under Blagojevich there was all this pent-up social stuff that was done.

Ryan had a first 100 days that would blow you away and even Edgar. Edgar had, in 1991 when he first took office he had a democratic-controlled Senate and House and he was able to wrest a lot out of Madigan then. I mean he got property tax caps. He got the education piece with the income surcharge back then extended permanently, two major concessions that he got in a budget stalemate then.

Ken:                I think that’s what’s been one of Edgar’s frustrations, right, is looking at this and saying why can’t you do this? I won’t say it’s not hard but it’s doable, even if you’re on opposite parties you can get some of these things done.

Dave M:          Rauner as much as he went after Unions he also went after Madigan, and since being elected those attacks against Madigan have not stopped. And you know most of these people who after they get elected there’s a certain pragmatism that takes hold because they know that they have to get things passed through the House, and starting with a budget. And if they don’t get just those basic things done they don’t get anything else, and I think that’s the challenge for Rauner going forward.

Ken:                So Dave what happens now? I mean we’re, I don’t know how many months into this; we have no budget. The courts are basically running the state as I see it now because the different…people go to court and say ‘I need this money’ and the court says ‘Yes, you can be paid,’ and then the comptroller says, ‘Well we don’t have a budget; we don’t have any money.’ This is insanity. Things are always wacky in Illinois, but this is a level of wackiness that’sunprecedented.

Dave M:          I think most of government now is functioning one way or the other with the exception of the human service people. Their money is still being held up and that’s the choke point here, and that’s where I think Rauner is hoping to leverage movement by the democrats on some of this turnaround agenda that he wants. And on the flip side, the democrats are saying look, we’re not going to let you gore labor unions or the trial lawyers and we’re prepared to just wait and let you take ownership of this. And so I don’t know. I think under Blagojevich in ’06 if I’m not mistaken we had an impasse that lasted all the way into November until we had sort of a final conclusion on the state budget. And I would not be surprised to see us go to that point if not beyond this year.

Ken:                You know I had really intended for us to spend a good deal of time on the show today talking about the schools’ funding inequity, the systemic inequity that exists in Illinois that sets us apart from so many other states, but we really don’t have quite enough time for that and I’m hoping maybe sometime we can get you back just to talk about that.

Dave M:          Sure.

Ken:                Because that is a really interesting thing. But in the meantime, we just saw the Board of Education yesterday, CPS Board passed unanimously, as always, the budget. And if Blagojevich introduced the concept of borrowing his revenue the CPS has introduced a whole new thing of fantasy budgets. I mean this is like an entirely new concept. Oh there’s 500-million in there. Trust me, it will come sooner or later maybe, and if it doesn’t how many schools do we have to close? What do we have to do? Well don’t worry about it; we’re going to get it somehow. So this is the kind of game that the mayor and the governor and Madigan are playing with each other. They’re just playing chicken on this stuff.

Dave M:          That’s absolutely right and as a result the state and these… Mark Brown, my former colleague at the Sun Times had a brilliant column today.

Ken:                I highly recommend it.

Dave M:          Yeah. It was about the effects of all this on a family with a developmentally-disabled child and those are the folks that are on the front lines here being subjected to this nonsense.

Ken:                It’s cynical to say but it’s almost as though the governor said, “Well now here’s some sympathetic people who will get media attention. If I screw them then maybe the others will come around and give me what I want in the Union deals.” I don’t get it. I really honestly don’t understand it, but you’re the guy who has been around. You were in Springfield for 19 years or whatever it was, so if you don’t understand it I know I won’t.

Well we’ve run out of time, as we always do. Dave McKinney it was really a thrill having you on the show today because you really are one of those people who have just been around and seen it all and you’ve written so beautifully on it for so long and I hope you will still continue to write in Chicago for a long time to come.

Dave M:          Thanks Ken. That’s really nice of you to say.

00:29:02          File end

Posted in Chicago Newsroom past shows | Tagged , , , , , , , , , , | Leave a comment

CN August 20, 2015

 

The City Council Progressive Caucus. It’s been around for years, and for much of that time it has prompted giggles at the mere mention of its name. But after the last election, the Caucus found itself with eleven declared members and several other Aldermen willing to ally themselves at least partly with the Caucus agenda.  And there’s some evidence that Mayor Emanuel’s at least been listening to some of their ideas.

The major – perhaps only – issue on the agenda right now is the gaping budget hole. And the Mayor and the Caucus are far apart when it comes to finding solutions. But there could be consensus on the need to impose Chicago’s first-ever garbage collection fees.

“It might be a good idea to charge people $5 or $10 a month for trash and kind of force people to recycle more,” explains Ald. Scott Waguespack, who chairs the Caucus and is generally considered one of its founders. “But you have to have an education component with that and we do not do that in the City, and that’s what’s really sad about the fact that he came in, he cut out the Department of Environment. We no longer have one and we need to get that back in. And I think we’ve been talking about a lot of these environmental issues as a progressive caucus and trying to show people that there’s ways to do things better and we just haven’t seen it yet.”

But Waguespack says when it comes to controversial issues like a whole new fee, the Mayor’s quite happy to let the Aldermen lead.

“When you look at the Mayor basically coming out and saying ‘hey, this is a great idea,’ this is one of those things where he kind of throws it to the aldermen because he knows it might be pretty unpopular,” he explains.

As always, it’s about the details. Some aldermen have called for a “pay as you throw” system where a household would pay a separate fee for each container they have. But Ald. Susan Sadlowski Garza, recently elected in the 10th Ward, says that won’t work. “I don’t think pay as you throw is a good idea,” she explains. “We’re going to have people in the middle of the night going and stuffing other peoples’ garbage cans and then we’ll be getting thousands of complaints saying ‘they’re throwing garbage in my can.’”

There’s pretty general agreement that property taxes are about to go up, possibly by a lot. But the Progressive Caucus says it wants to explore cost-saving first. “You can minimize that by doing all the other things that people have pointed out is wrong with the City first and that’s what we haven’t done,” Waguespack explains. “So when the Inspector General says -look, I’ve given you these audits of how you’re poorly running all of your systems within your departments, fix those things first – that will shave off a few hundred million dollars from what could be a major property tax hike.”

And when it comes time for new taxes, the Caucus says there are other sources that could raise large amounts of revenue without hitting homeowners so hard.

“Look, let’s make it fair and equitable,” Waguespack says. “We did propose a financial transaction tax. That’s a State issue as well. (It needs approval by the Legislature.) That could equalize us in terms of what we need in revenue to slow down that property tax hike. The Mayor has flat-out said I’m not interested in most of what you guys have offered. His whole focus is on putting in a casino.” The Caucus members don’t believe the casino will generate nearly as much money as it proponents forecast.

The casino was a big part of Mayor Emanuel’s re-election campaign. But Waguespack says that was never enough.

“He had a plan,” the Alderman asserts, “And the plan was basically I’m going to borrow $1.9-billion and then I’m going to borrow $1.1-billion. And so you look at the borrowing that he’s done that has been his solution. Basically that falls on us now and for our next couple of generations of children who are getting stuck with that bill.”

A key issue for the Caucus is an elected School Board. But their plan has an extra layer.

“You bring people up through the Local School Councils. You have a regional LSC that they go to and then those people would then be able to run for a citywide board. That’s sort of a very simple model,” Waguespack explains.

“Some people say hey, have a hybrid,” he continues. “The Mayor could appoint two or three people, the rest get elected, but they have to have served on LSCs at a local and regional level to get that point so that they already understand it.”

Alderman Garza has a personal connection to the schools funding crisis. “I spent 21 years inside of a school and what’s happening in these schools is an atrocity to me,” she asserts. “Why are charter schools getting more money than neighborhood schools? There has to be somebody that sits on this elected school board that knows what’s happening inside the classroom, and I agree with Scott there has to be a vetting process. But we need people that know what’s happening in the trenches…Bowen High School. Right next to it is a charter school, I’m not going to even say its name, they have literally plucked and plucked and plucked these kids with a marketing scheme and rhetoric and they’ve plucked these kids out of Bowen which has been doing some really great things. And they can’t compete because Bowen’s budget was cut $1.3-million when the school right next door their budget was increased. So I mean you don’t stand a chance.”

We ask whether either Alderman feels optimism about Forrest Claypool, a respected administrator, taking the reins at CPS.

“Not really, no I don’t,” Waguespack claims. “There’s a directive from the Mayor and he takes the directive and that’s what everybody else has done that was before him.”

And finally, TIFs. “We have a city that is one-third of it, I think  covered in TIFS,” explains Waguespack. “That’s more than any other city in the United States. We divert billions of dollars a year. I don’t know what the number is going to be at the end of this year, but we divert billions from the overall tax base. So what that is is basically you and I as homeowners are going to pay more in property taxes because of this imbalance and that’s what people need to understand. Now the Mayor and his floor leader and some of these other folks out there will say – hey, we’re going to have a boon of money when these things end 20 years from now – well, guess what, we have a crisis right now.”

Read a full transcript of the show here: CN audio 082015

Posted in Chicago Newsroom past shows | Tagged , , , , , , , | Leave a comment

CN August 13, 2015

 

Wanna hear some good news about Illinois? While America whines that President Obama’s new air quality standards are way too stringent and nobody can achieve them, our little State will probably meet, and possibly exceed them pretty quickly.

How? Well, as the Tribune’s Michael Hawthorne tells us, its a mix of (gasp) nuclear power, (yikes) fracking, a pretty aggressive wind power program and a bunch of closed, or soon to be closed, coal-fired clunker plants. And, dear viewer, all those LED bulbs and energy-efficient air conditioners you’ve been buying.

Coal-fired plants are being retrofitted to burn natural gas, which is suddenly abundant due to the fracking boom.

“It burns…it emits a lot less mercury, a lot less smog and soot-forming pollutants,” Hawthorne explains. “And also it emits about half the heat-trapping carbon dioxide. There’s some other issues obviously with fracking, but just in terms of when it’s burned for electric generation it’s a heck of a lot cleaner than coal and right now it’s a lot cheaper.”

Of course, as we’ve discussed previously on Chicago Newsroom, the fracking process itself creates huge amounts of greenhouse gas, and its opponents have found abundant evidence that it seriously pollutes our water.

The President’s new rules acknowledge that market forces are already helping clean the air through reductions in coal burning and huge efficiencies at the consumer level, but as Hawthorne points out, regulation often has the effect of laying down the challenge to more progressive parts of the regulated industries.

“And we’ve seen this time and time again,” he explains. “A rule is put in place that says okay polluting industry, you have to do something and we’re going to set a target for you or we’re going to set a deadline. The regulated industry, the polluting industry complains saying, “Oh my God, we can’t do this, we can’t do this.” And then what ends up happening is we have really smart engineers at a lot of these companies and they figure out a way not only to meet the target, but ultimately to do it in a very much less expensive way, so that’s what we’ve seeing with these light bulbs. You know it wasn’t too long ago that they were $30 a pop.”

It’s ironic that Illinois is in a fairly solid position on clean air improvements. Because of its nuclear fleet, and the fact that it sold all its coal plants years ago, ComEd and its parent Exelon find themselves positioned as a green leader, at least in terms of carbon-dioxide emissions.

“You know they’ve been in Springfield saying they need essentially some kind of give-away from the rate payers of the entire state,” Hawthorne tells us, “Or otherwise they’re going to be shutting down a few of their older nuclear plants or their smaller nuclear plants. Essentially what’s happening right now is at night sometimes the way the electric markets work, at night sometimes these nuclear plants that are constantly running are essentially getting negative prices for their electricity, because at night wind and other things are going full tilt. They are putting a lot of electricity onto the grid and so ComEd is not making money on those plants.”

But here’s a remarkable statistic about the position of electric generation in Illinois today. One company, if it were to convert its plants to gas, could carry Illinois to the finish line on Obama’s targets.

“There’s this company NRG that bought a lot of the old ComEd coal plants,” says Hawthorne. “They’re planning to turn a big plant out in Joliet to natural gas. That right there will get us a long way toward meeting that reduction target in the climate rules. And if a couple of other plants shut down or shut down some of the more inefficient units we’re probably there by the middle of the next decade or early part of the next decade.

Michael Hawthorne wrote a series of provocative articles for the Tribune about the possible role lead poisoning has played in Chicago’s incessant violence. A recent study had some very instructive findings for policymakers in Chicago.

“Well, I came at it initially because I’m interested in why we keep having this violence problem in our poorest neighborhoods. 2012 was an incredibly violent year here in Chicago, with national headlines for the uptick in murders. And there’s a lot of compelling research that links lead exposure early in life with first problems in school and then later a life of crime and especially violent crime. There’s a really interesting study in Cincinnati where they’ve been following people since the late 70s.

“And if you were poisoned by lead as a child, even small amounts of lead, much smaller than what we were talking about when this was a big issue in Chicago in the 1970s and 60s, very small amounts of that can permanently alter the chemistry of the brain or the makeup of the brain, and especially in areas that deal with executive functions like judgment and emotional control.

“And so you have a situation where kids end up doing very poorly in school in part because of what’s happened to their brain early in life through no fault of their own. And then in the case of these kids that were followed and now adults in Cincinnati they are more likely to be in prison and have committed violent crimes later in life. And I got to thinking, could this lead problem, this historic lead problem that we’ve had here in Chicago because we have a lot of older housing, pre-1978 when lead paint was banned in this country. Could that be part of what’s going on?

You can read his articles HERE and HERE. 

And you can read a full transcript of today’s show here:  CN audio 081315

Posted in Chicago Newsroom past shows | Tagged , , , , , , , , , , , | Leave a comment

CN Aug 6, 2015

Chicago has 22 police districts, each with its own police station and commander. But but there’s evidence that police brass believe they need at least one additional place – one that doesn’t appear on the City’s official directory of police stations. It does appear on Google maps, though, as the Chicago Police Department Evidence and Recovered Property Section. But back in February the very well-respected Guardian Newspaper said this facility, at Homan Square, was more than that. That it was also a place where the CPD could “disappear” arrestees for hours at a time, presumably for questioning, and free from such legal niceties as Miranda rights and lawyer representation.

The police denied this, of course, so the Guardian sued, and the results of that litigation just dropped yesterday in a new article. The important numbers – at least 3,540 people have been held there since the place opened for business, apparently in 2004, and fully 2/3 of that activity has happened since Rahm Emanuel became Mayor and appointed Garry McCarthy as his police chief. And it’s important to note that these more than 3,000 people, 80% of them black, are those who ended up getting charged with something. At this point we have no way of knowing how many people have been taken there, interrogated and released.

In media interviews, one of the Guardian’s reporters said he was tipped to the existence of this place by the head of the Chicago Justice Project, Tracy Siska.

Tracy Siska is our sole guest on the program today.

You can watch the show above for the entire conversation, including Sitka’s takes on IPRA (400 police shootings, only one found unjustified), and on the recent advice to African Americans to “comply now, contest later”.  The problem with that, Siska says, is that “in reality though, there is no ‘contest’.”

Transcript:   CN audio 080615 show #104

And here’s the original Guardian story.

Posted in Chicago Newsroom past shows | Tagged , , , , , , , , | Leave a comment

CN July 30, 2015

Is this the new reality? We just pass three and four-week state budgets, because we have to have something, but we can’t agree on anything.

The City’s Comprehensive Annual Financial Report is out, and it shows unfunded holes possibly topping $700 million for next fiscal year. How to plug it? Garbage collection fees. Taxes on sugary drinks. Of course, property and sales taxes. And that’s just the City side of your tax bill. The County’s already dipping in for more, and just wait’ll you see how much the CPS is gonna ding you in the next few months. It’s a huge problem, and, as we’ve said before, not a problem that can be resolved by simply cutting assets and services.

Joining us this week to share their observations after covering Wednesday’s City Council meeting are WTTW’s Hunter Clauss and Aldertrack’s Claudia Morell.

Posted in Chicago Newsroom past shows | Tagged , , , , , , , , | Leave a comment

CN July 23, 2015

 

Blaine Elementary principal Troy LaRaviere is our sole guest this week.

School budgets, charter schools,educational achievement and lots more.

Posted in Chicago Newsroom past shows, Uncategorized | Tagged , , , , | Leave a comment

CN July 16, 2015

 

George Schmidt is “mildly” optimistic about the new management team of Forrest Claypool and Frank Clark at Chicago Public School.

And that’s saying something, because the Editor of Substance News, consultant to the CTU and all-around 25-year public-schools gadfly doesn’t have anything nice to say about the old team. In fact, he says of outgoing Board President David Vitale: “He should be indicted.”

Claypool, Schmidt acknowledges, knows Chicago well, and as a three-time mayoral Chief of Staff, head of both the CTA and Park District, he has as much experience in Chicago government as anyone.

“He’s not gonna get a honeymoon and he knows it, but he’s probably one of the few people in this town who can say – I don’t need the honeymoon.” he says.

Already critics are saying that Claypool has no experience in education, and that the CEO should be an educator.

But Schmidt says the system has a separate education chief, and that person can be influential.

“Since we got mayoral control in 1995 there always has been the position of Chief Education Officer,” he explains. “So as long as we’re gonna maintain the myth that we need a Chief Executive Officer instead of a Superintendent of Schools, then the first thing they should do is bring in somebody who really does know education, and is gonna be given the power with the full blessing of the CEO…so I think it’s do-able up to when we get an elected school board and go back to having a Superintendent and end this massive 20-year-old fiction.”

Should this Chief Education Officer be from Chicago, or can this executive come from anywhere?

“You need somebody who doesn’t need a GPS to get from Bogan to Bowen High Schools,” he claims. “Forrest Claypool knows Chicago. He knows Chicago from the parks, from the CTA. You need somebody who actually knows this system, and these places and these people. You can’t bring in somebody from Colorado like they did last time…it was an insult to everybody in Chicago and it was wrong in terms of any serious way of running the organization.”

Do these appointments, which seem to signal a different direction from the Mayor, indicate that he wants to see things done differently? Schmidt says he’ll be watching for a couple of new initiatives.

“One is to see how the new Board and the new CEO handle the Chicago Teachers’ contract negotiations,” he tells us. “The hundred million dollars it would have taken to bring the contract in before June 30 under the old contract, for an extra year, is a small percentage of the five to six, to seven billion dollar budget (depending on whether you include capital). So when Rahm and Vitale said no, it’s not there, we can’t reasonably foresee going for it, they told the union it’s a showdown. That really was a bad idea.”

Second will be watching to see whether the new CEO recognizes the need for more funding.

“CPS needs more revenue,” he states emphatically. “And the revenue has to begin to come from an increase in the local property taxes. It’s that simple.”

And, for his part, he’ll continue to attend every Board meeting, he says, and point out every nickel of waste he can find in the budget.

“The Tribune on July 15 did  great job. They pointed out that the couple of million dollars that was being wasted on the money they’re gonna lose on these variable-rate bond deals – could’ve paid for the elementary school sports coaches.”

Schmidt also calls on Claypool to reconsider the method by which school budgets are formulated, and to “overcome this crazy so-called student-based budgeting that’s basically strangled the real schools and poured the money into the charters.”

In case you’ve been wondering how CPS could, as has been widely reported in the past few days, take tens of millions of dollars from dozens of schools like Lane, Julian, GagePark and Marshall and give millions and millions to charter schools, you’re watching student-based budgeting in action.

“It’s a fiction,” Schmidt says. “It’s a talking point. Student-based budgeting means we’re not gonna budget for the staff we need. We’re not gonna budget for the programs we want. We’re gonna budget based on the narrowest formula to restrict the ability of principals to select the staff and have the programs they want.”

Schmidt says Claypool and Clark must find a different budget mechanism.

“Budgeting for schools should never be student-based,” he asserts. “It should be program-based. It should be people-based partly on the input from the community when we have local school councils.”

For years, he says, the system has been biased strongly in favor of charters.

“Every time they made a decision to put a charter school in an area that didn’t want one, and then subsidized the charter school with an enhancement of revenue, and then gave the charter schools the green light to get all of the privatization revenue…every time they made that decision, it’s part of the project of privatizing as much as possible and also trying to suck away students from the – I call them the real public schools.”

And the pro-charter bias started a long time ago, he explains.

“The formula was set at the beginning of Noble and it hasn’t changed,” he tells us. “The formula is, if you’re a charter, you maximize your numbers up through October, November, whenever the Board asks for your final count and gives you the money. Then you make sure your criteria enable you to kick out the kids you don’t want in January. So if you look in October and April and see how many kids the school has, they’ve reduced it. So it’s a trick that Noble started with their first campus…and it’s been perfected by all the rest of the charters.

“So you will find in every high school around the city…these kids who are refugees from the charters,” he claims. “They were kicked out because they didn’t get enough points …or they didn’t cuff their Dockers or whatever the rule was, so the kid suddenly ends up in Steinmetz or North-Grand or Kelvyn Park or Wells. The blowback on this is, not only are these schools being cut now, but they’re gonna receive the kids that need a public education in the second semester, and it’s gonna be based on dollars they’re not gonna be given, because the Board will not increase the dollars.”

Frank Clark, former CEO of ComEd and a member of numerous boards governing private companies and non-profit enterprises, will have the opportunity to take the Board of Education in some new directions if he thinks it’s appropriate. And George Schmidt says Clark has the credentials. He recalls the long evenings a few years ago when Clark chaired the commission that took public testimony about the closing of what turned out to be 49 schools.

“I watched Mr. Clark chair those meetings on the school closings,” Schmidt remembers. “The man knows how to take the heat. And it wasn’t like we always agreed with him, certainly, about what he was doing.”

“He was at these tumultuous meetings,” he continues. There was one meeting with a thousand people, and the man sat there and listened. And that’s an important skill if you’re gonna work in a democracy.”

Clearly, the Substance founder and long-time union activist sees an opportunity to turn the corner on what he considers a deeply-flawed past administration.

“Vitale and (Vice President Jesse) Ruiz have been almost criminally complicit in an attack on the public schools and a massive privatization. It’s that simple. That’s their tenure. That’s the verdict.”

And now all eyes turn to Forrest Claypool. Schmidt see it as a great opportunity.

“Forrest Claypool can come in and air out the room and let people know that he’s serious about this.”

 

Posted in Chicago Newsroom past shows | Tagged , , , , , , , , , , , | Leave a comment

CN July 9, 2015

 

There’s a provocative article in the latest In These Times that should be mandatory reading for everyone concerned about the pension/budget crisis that’s gripping Illinois.

It’s titled Why Chicago Won’t go Bankrupt, and Detroit Didn’t Have To. It’s written by Saqib Bhatti of the Roosevelt Institution, and he was our guest on today’s program.

Bhatti echoes the theme that has been heard often on Chicago Newsroom – that more than anything else, we have a revenue problem. That for decades municipal governments have been starved of tax increases that keep up with the rising cost of providing desirable services, and that, forced to decide between dropping services and going into debt, they have most often chosen borrowing, to the delight of the financial sector.

“The banks played a huge role in the bankruptcy in Detroit, Bhatti explains. ” What it speaks to is the issue that, you need to figure out a way to raise revenue and you’re unable to do it. So the banks come peddling you a deal, saying, hey – we see that you’re hard-up for cash. Here’s a deal you can do. Much the same way that they targeted cash-strapped homeowners. They sold them mortgages that theoretically were great deals but their hidden risk and hidden costs were really complex, and often designed to fail. And Detroit got basically the municipal version of those sub-prime mortgages.”

And the result was predictable.

“Down the line those deals backfired in a really big way,” he reports.”They ended up costing billions more than they should have. The interest-rate swaps in particular blew up fantastically. The City ended up … paying hundreds of millions in fees on the swaps.”

It’s widely accepted that Mayor Daley obligated the City to a large number of these questionable financial arrangements, and that he left a pile of them for Rahm Emanuel to deal with. Has the Mayor succeeded in cleaning up a significant portion of these obligations?

No, Bhatti asserts. “He’s done more kicking the can down the road. More of the short-term fixes. Gimmicks like red-light cameras and speeding cameras to balance the budget. He hasn’t done the difficult thing which needs to be done – figure out how to raise progressive revenue in this city…but he’s not willing to do that because progressive revenue means making rich people pay their fair share instead of pushing all the burden onto those who can least afford it.”

Beat addresses in his article a perverse cycle in which the wealthiest forces in our society profit from the general misery.

“Municipal bonds are tax exempt, which means they tend to pay lower interest rates,” he explains. And because that’s the case, major institutional investors tend not to invest in a big way in municipal bonds.”

“We’ve created this system in which they create a crisis and then they profit off of it,” he explains.  “The privatizer, the wealthy, the Wall Street banks, they’re the ones who are not paying their fair share in taxes…they’re lobbying to keep taxes down, and that’s what creates the crisis and allows them to come in with their solutions… They say the government is the problem not the solution, but really, they love government. They just love to be able to take over government. They love government cash. They don’t really want small government.”

 

As we all know, pensions are being blamed for creating this mess, But Bhatti doesn’t buy it.  Before a decade of pension holidays, he says, most pension systems were solvent. But more importantly, they are a moral and legal commitment to the work force.

“Pensions are actually deferred wages,” he asserts. “As you’re working, the same way your employer might pay into your 401-K in the private sector, or pay Social Security taxes for you, they’re supposed to do that with every single paycheck. The State, the City, the school systems, they’re supposed to do that, too, and in their case it goes into the pensions. But in years with budget crises, instead of finding ways to raise taxes, you have the mayor or the legislature saying this year we’re just not gonna pay. We’re gonna take a pension holiday. So pensions are actually wages for work they’ve already done. And they don’t want to pay it.  Instead they say the problem is that you have too many pensions, even though most pensioners don’t get Social Security and they’ve had modest salaries all their lives.”

And the unfortunate result is that constituencies that might have normally been allies become enemies.

“You have this thing where pensions become the easy scapegoat so that you can pit workers against the community that they serve, and when you have workers pitted against the broader community, the people at the top are off the hook,” he says.

Detroit was forced into bankruptcy. As you’ll see if you watch the first five minutes of this discussion, (it’s a bit complicated), Detroit was only about $200 million behind in its payments. A lot of money, but something that could have been overcome. But the Republican Governor and Legislature scapegoated the City, he says, because they really wanted to bust the pension system, and bankruptcy was the only legal way to do it. Can this happen in Illinois?

“Currently municipalities in Illinois cannot file bankruptcy,” Bhatti explains. “Under the federal bankruptcy code, municipalities, school districts and public agencies can file bankruptcy only if the states authorize them. 26 states including Illinois do not authorize it. So there’s a bill in the Legislature to change that…Rauner’s been touting it as part of his turnaround agenda. He’s created a situation where he’s trying to entice municipal officials to support it, and part of how he’s doing that is by cutting State aid to them.”

In fact, his proposal is to cut by half the amount of revenue the State shares with cities and towns. The hardship this places on smaller towns is intense. Here’s how Bhatti described it in In These Times:

“Like state officials did to Detroit, Rauner inflicted financial hardship on cities and then dangled bankruptcy in front of them as the solution.”

So what does Bhatti recommend at this critical point?

“We need progressive revenue solutions in this state. So we need to pass a millionaire’s tax. We need to restore the higher corporate tax rate that just sun-setted. we need to start looking at a financial transaction tax that taxes transactions at the exchanges on LaSalle Street. We need to start looking at other options like taking some of these bad deals the City entered into like interest rate swaps, and actually suing the banks to get that money back.”

 

Posted in Chicago Newsroom past shows | Tagged , , , , , , , , | Leave a comment

CN July 2, 2015

 

How do you define corruption? Is it Governor Ryan soliciting cash birthday presents from his workers, or a gaggle of aldermen carving up the City Council ward boundaries to make sure everyone can get re-elected forever?

The authors of Corrupt Illinois say both are corruption. But some activities, like gerrymandering, have long-term corrosive effects on our politics.

Tom Gradel and Dick Simpson join us this week to talk about their new book, which chronicles corrupt activities and corrupt people for almost 200 years in Illinois. It isn’t pretty.

For example, suburban mayors, police chiefs and council members.

“We think of it as the evil city that’s corrupt with the nice, clean suburbs, explains Simpson. “But that’s simply not true. We found nearly 200 cases of suburban officials who are corrupt and have been convicted by the federal government in 60 different suburbs. The suburbs seem to by vying to see how many they can increase that number to.”

And Simpson has a suggestion. “We need to create suburban inspectors general,” he asserts.

By the way, corruption in Illinois didn’t start with Rod Blagojevich and the Golden Senate Seat. Simpson and Gradel take us all the way back to the beginning.

“We did two important votes, in 1833 and again in 1837,” Simpson explains. “When we did the first vote to incorporate Chicago as a town, they cast their votes to, yes, incorporate. They were meeting in a tavern, which was very appropriate to Chicago (but it was a hotel tavern) and so when they counted the votes, they got more votes than there were citizens in the town. And then when they elected the aldermen and the trustees, they found that a number of people who voted weren’t eligible to vote. So ghost voting started in 1833 in the City of Chicago.”

And if you were appalled by the SUPES contract fiasco, how about this?

“In 1869, City Hall was a  wooden structure, so it needed a paint job, just like any wooden house does,” Simpson tells us. “It was a big building. So they hired someone for $127,000 to paint City Hall. They hired this contractor. He doesn’t use paint. He used whitewash. A couple of rainstorms later it’s obvious to everyone. So they indicted fourteen aldermen and county commissioners. They convicted four of them, sent them to jail, and most of the others lost their election in 1871. We have been corrupt since we were a territory.” We probably don’t need to remind you that $127,000 was a LOT of money in 1867.

We asked Gradel whether the apparent sexual misconduct by former House Speaker Denny Hastert counts as corruption.  Yes, he says, but adds that Hastert was not without his own allegations of straight-out fiscal corruption.

“He passed a bill that gave $207 million to Prairie Parkway. the Parkway cut right next to the land which he sold, and he made a $2 million profit. Sold it for $3 million, made $2 million off of it. And his ownership in that was hidden when the law was passed. It wasn’t until afterwards that people found out he owned that property,” he says.

Corrupt Illinois is a remarkable compendium of stories about corrupt people and their misdeeds. Elected officials and public servants of all ranks are listed, and it can be fascinating to go back into recent history to refresh your memory. A good example: Dan Rostenkowski. What did he do again, steal some postage stamps?  So he went down for a few bucks in stamps?

“It was $50,000 to be exact,” says Gradel. Rosty would be given thousands of stamps, and he’d return them to the post office and pocket the money.

“But he also did a number of other things,” says Gradel. “He had people on the federal payroll who were cleaning his house. There’s testimony that people who worked for him on the federal payroll were made to kick back money.”

Many of us have deep concerns about the corrupting influence of big money on political campaigns.  But here again, Simpson says it’s really nothing  new.

“Al Capone left Chicago to go to Cicero when Big Bill Thompson was out of office for four years. He wanted Big Bill to come back, so he provided large campaign donations. He also provided election day workers,” says Simpson. Big Bill won.

But although the thread of corruption snakes through our entire history, the digital age is changing the way corruption occurs. Changing, but not reducing it. For example:

“The police have changed their pattern. They no longer take bribes from the mob to the police superintendent or the commander. Now the bribes are more retail. They’re direct from the street gangs to the local beat cop or to the special units that get assigned to drugs and to gangs,” Simpson says.

The delivery system for boodle and payoffs is no longer the bag man. It’s the contract. The authors recall a newspaper editorial that sums it up most effectively.

“Corruption was written as thievery between the lines of the contracts,” it said. Says Gradel: “Contracts have more than conflicts of interests. They have outright stealing.”

 

 

Posted in Chicago Newsroom past shows | Tagged , , , , , , | Leave a comment

CN June 25, 2015

At last night’s CPS meeting, the Board voted to borrow more than a billion dollars to keep the schools operating another year. But about 24 hours earlier pretty much nobody knew this was the plan. How did this happen?

“I don’t know,” says Sun-Times education reporter Lauren FitzPatrick.”In the sense that it was not discussed. It looks like it’s two chunks of borrowing – $200 million, andsome $935 million. But the Board of Education didn’t say a word about it other than to cast a unanimous vote at the end of the meeting to approve both pieces of borrowing.”

“Not even roll-call vote,” adds Sarah Karp, now an investigative reporter with the Better Government Association.

Despite Interim CEO Jesse Ruiz’s vow that he’d run a more transparent operation, there was no public involvement of any kind before the vote for this massive borrowing. “They did discuss a couple of other big items on the agenda,” says Fitzpatrick, “So I was waiting for the money people to come out and talk about the borrowing, but it just never happened.”

Any discussion that did occur at the Board level happened in a back room outside the public view. A day later there still aren’t any more details about the loan – how it will be structured, when it will take effect, or when the first checks will arrive. “There’s no real reason I can see why they would discuss this is executive session,” asserts Karp. “This is not real estate, or personnel…the public would like to know a little more about this. My grandkids are going to be paying for it.”

When we taped our discussion this morning there was optimism in the air that a new one-year placeholder contract was about to be drawn up between CPS and the CTU. But that was dashed a few hours later when the CTU published a statement that talks had broken off.

We asked how this deal would have been different from a one-year contract extension (provided for in the old, expiring contract) that both sides rejected at different times over the past few months.

“From the sound of it, this one-year deal that’s being talked about right now would not have included a pay raise,” explains Catalyst Chicago reporter Melissa Sanchez. “The previous one-year deal would have, if they had extended the contract. What they’re getting at the moment is that CPS has backed off of their desire to stop paying the seven percent of the nine-percent pension pickup. That’s what we’re hearing. So for the union, they’re at a standstill. They’re not losing. And it gives them time to rally their troops.”

Earlier this week, Mayor Emanuel said he had requested from Springfield a 40-day extension on the payment of about $635 million into the Chicago Teachers Pension Fund. But when the bill came before the House it fell well short of passage. It was mysterious. “Clearly CPS thought this was going to happen,’ explains Fitzpatrick, “because Jesse Ruiz, somebody packed him up into a car and he appeared before committees and the full House, and he was there to make his case and turned up in person. I can’t believe that if he thought this wasn’t going to happen, he’d have taken the time to go.”

It was widely believed that all the legislative leaders, the Governor, the Mayor and CPS were on board, and that the union and the pension fund were not in opposition. It seemed relatively non-controversial.

“The idea of the delay is that tax money will be coming in, in August,” says FitzPatrick, “which is not in their pockets now. And if they could have forty days then they would be able to make the full pension payment as opposed to no payment or even a partial payment which was getting batted around for a while.”

So what happened?

“I’ll tell you the gossip I’ve heard, which is unconfirmed, that  the Republicans were about to be able to take credit for solving the CPS problem. So if the deal, which was supposed to be a done deal, got pushed off, here comes Mike Madigan to the rescue a week later – and he gets to save the day, instead of the Republicans that were willing to cross the aisle in support of the 40-day delay.”

Some good news this week, though, was Governor Rauner’s announcement that he planned to sign that portion of the State budget that funds the schools. So, although almost everything else is still being debated, schools now know the size of the checks they’ll be receiving from Springfield in August.

And finally, the Ernst and Young report. It was commissioned by CPS presumably to show the public just how bad things are.

“While we’ve all been waiting for the latest trick, they came in and said, there kind of aren’t any,” FitzPatrick tells us. I think it’s page 24 of the report that lists all of the things that will pretty much all be needed to pull this off this year. Some are taxes, some is help from Springfield, some is classroom cuts. One of the other points that the report tried to make is that solving this problem can’t just come from CPS alone. That there are all these other people who are gonna have to sign off on a lot of these proposals to pull them off too. The State, the City Council, retirees, unions – CPS cannot get out of this on its own, Ernst and Young was paid to say.”

The CTU has said, and often repeated, that the financial mess was created by CPS, and that it’s “broke on purpose”. We ask if that’s a credible claim.

“I don’t think that they ever intended to go broke or spend themselves into oblivion,” Fitzpatrick explains. “But I think the union would argue that it’s a cute way of saying that they’re not acting as though they’re actually in financial crisis – that they’re spending on big-ticket items and things that are not working, like the Aramark contract for example, the SUPES contract, which has blown up in their faces, they continue to open new schools. They’re not acting like they’re broke, and that they’re digging themselves in even deeper.”

And after last night’s vote, about 1.1 billion dollars deeper.

Posted in Chicago Newsroom past shows | Tagged , , , , , , , , , , | Leave a comment