Report: Firm fees from Chicago schools borrowing tops $18M
CHICAGO (AP) — Dozens of legal and financial firms have been paid roughly $18 million in fees from borrowing and debt-refinancing deals with Chicago Public Schools since 2011 when Mayor Rahm Emanuel first won office, according to a newspaper report published Saturday.
Those who benefited from the Chicago Board of Education’s decision to keep borrowing were a select group of businesspeople, some with connections to Emanuel, according to the Chicago Sun-Times (http://bit.ly/1NGyxuP). The report comes as the district borrowed and made $200 million in cuts, including layoffs, to make a $634 million payment to the pension fund earlier this week.
The newspaper cited records it obtained, saying one firm is Quarles & Brady, which was paid $300,000. The firm and its attorneys gave $4,500 to Emanuel’s campaign fund. Another firm, Mayer Brown, was paid $175,000 for legal work on a $109 million bond sale in 2012. Its attorneys have contributed nearly $70,000 to Emanuel’s campaign fund. In another case, Thompson Coburn, whose partners include Senate President John Cullerton, was paid $350,000. Cullerton has been one of the mayor’s allies.
Spokespeople for the firms and Cullerton have said the contributions were within legal limits and had nothing to do with politics.
Emanuel’s spokesman Adam Collins said there isn’t a connection between awarding the bond work and the mayor’s political fund.
“These firms have done this type of work with the city and with sister agencies for years, in some cases for decades,” he said. “Beyond that, to the question of CPS borrowing, sister governments are separate legal entities and decide for themselves which firms to use on their bond transactions.”
The nation’s third-largest school district still owes billions of dollars on borrowing deals stretching back to the mid-1990s when then-Mayor Richard Daley took control of the schools. Emanuel continued borrowing when he first took office in 2011, including a bond deal of nearly a half-billion dollars this spring.
The newspaper notes that the fees on BPS bond deals usually equaled less than 1 percent of money borrowed, which is typical when compared with fees on state of Illinois and other government bond sales.
Information from: Chicago Sun-Times, http://chicago.suntimes.com/