There are so many things I like about the Tribune‘s recent series on the Chicago Public Schools’ bond-borrowing machinations that it’s hard to name them all.
I’ll start with the ironic fact that this hard-hitting critique of capitalism gone wild appears in, of all places, the Tribune. Its editorialists are probably the only people in America who watch It’s a Wonderful Life and root for Mr. Potter.
But let’s give three cheers to reporters Heather Gillers and Jason Grotto, whose intrepid efforts to pry this public financial information out of Mayor Rahm Emanuel’s tightly clenched fist probably landed them a prime spot on the City Hall shit list.
An honorable place for any journalist to be.
In the scheme they describe, CPS officials decided to engage in a risky borrowing venture to raise the $1 billion or so they needed to build and rehab schools.
By a conservative estimate, these highly speculative moves ended up adding at least $100 million to CPS’s borrowing costs.
Think of it this way: the watchdogs in charge of protecting our fiduciary well-being found a way to take at least $100 million from the schoolchildren of Chicago and give it to a bunch of superrich bankers.
According to the Trib, the architect of the borrowing plan was David Vitale, former CEO of the Chicago Board of Trade, who went to work as the chief administrative officer for CPS in 2003, back in the go-go days of Mayor Daley’s reign.
Mayor Emanuel was obviously so impressed with Vitale’s money-managing acumen that he gave him a promotion, naming Vitale president of the school board.
Now Vitale is the guy who sits in his leather swivel chair at board meetings and tells parents—outraged over cuts and closings—that they don’t understand the intricate nuances of running a big and complicated public school system.
So shut up already!
I don’t want to blame everything on Vitale. CPS had the authority to engage in the bond swaps thanks to a law that the General Assembly passed in 2003 by a margin of victory that was almost as bad as the Packers over the Bears: 102-13 in the house and 48-9 in the senate.
That bill was drafted by an attorney for Chapman and Cutler, a law firm that represented banks involved in $770 million worth of CPS bond deals between 2004 and 2009, according to the Tribune.
A spokesman for Chapman told the Trib that the division of the law firm that represented those banks is separate from the division that wrote the bill.
I think I speak for all of Chicago when I say that’s a relief!
The bill was sponsored by state senator John Cullerton—for whom I recently voted again.
So you could blame the whole thing on me.
Another great moment in the Trib series comes when Gillers and Grotto note that New Jersey has tighter oversight laws to guard against such skullduggery than we do. You know things are bad when your state is even worse at financial oversight than New Jersey.
Finally, there’s the part of the series that deals with Mayor Emanuel.
Let me set this up with a little context.
If you recall, Emanuel stormed into office more than three years ago vowing to clean up the financial mess at CPS.
Right off the bat, he snatched away a raise the teachers had been promised in their previous union contract. He said we couldn’t afford it.
Then, claiming that money-grubbing teachers had given kids “the shaft,” he ordered the teachers to work longer for less.
Next he cut more funding—we can’t even afford a chess program. Then he closed 50-some schools. The mayor followed that by firing more teachers and janitors.
When parents complained, he said he was only looking out for their own good, and one day we’d all thank him.
And not once did he ever breathe a word about the extra $100 million that CPS gambled away to those bankers.
No wonder so many students, parents, teachers, janitors, and principals loathe this administration.
Now, in Mayor Emanuel’s defense, CPS made those borrowing deals between 2003 and 2007—years before he took office.
Which is why I’ll never understand why the mayor—who brags that he runs a “transparent” administration—was so reluctant to release information about those bond transactions to the Tribune.
As a result, it took the newspaper more than six months to get the info they first asked for in a Freedom of Information Act request last December. By March, the Tribune was so frustrated that it retained a lawyer to demand that CPS stop stonewalling.
That means it cost the Tribune money to get basic financial information that should be available online for anyone to see.
After the lawyer got involved, CPS invited Gillers and Grotto in for a meeting that featured a CPS lawyer, the CPS treasurer, and a press operative. The officials promised to send the Trib the info they requested.
But days passed and they didn’t send it. When the reporters called back, CPS officials told them to submit another FOIA request.
They did—which prompted CPS to tell the reporters that their FOIA request was too burdensome. So they scaled back the request.
Finally, in May, CPS sent over some files.
By then Gillers and Grotto had connected with a secret source who gave them documents that weren’t in the batch that CPS had provided.
So even after CPS made the Trib wait half a year for basic information, officials still weren’t being transparent.
No wonder so many reporters loathe this administration even more than parents and teachers do.
Presumably, CPS has handed over all the files. But you never know with this bunch.
We might have to wait for another mayor to take over before we know the full story.