There’s a joke among municipal government nerds that goes something like this: A guy’s running for treasurer and he goes to lunch with a bunch of business people who ask him all sorts of questions about how he’ll invest pension funds and manage the city’s cash flow. He says, “Wait a minute, I’m running for treasurer, not deputy treasurer!”
This was recently relayed to me with a chuckle by Michael Belsky, executive director of the Center for Municipal Finance at the University of Chicago. He’s a local government expert who’s pleased to see the city treasurer’s office in an unusual spotlight this election cycle. The April 2 runoff is between 47th Ward alderman Ameya Pawar and 10th District State Rep Melissa Conyears-Ervin; their campaigns have brought the role of the treasurer out of decades-long electoral obscurity.
So what does the treasurer do? In Chicago, this is one of three elected executives, along with the mayor and city clerk (but is the lowest paid of the three, with a salary of about $134,000). The treasurer’s job is to manage the city’s roughly $8 billion cash flow (which includes revenue from property and sales taxes, fees like city tickets, and transfers from the state and federal governments through block grants and other appropriations). The treasurer makes sure there’s money behind the checks the city cuts to pay salaries, workers’ comp, or legal settlements. The treasurer also makes sure city money doesn’t sit idle while not in the process of being paid out. This requires managing relationships with “municipal depositories”—the 17 private banks where municipal funds are kept—and overseeing investments so that cash can generate returns. Finally, the treasurer sits on the boards of the four city worker pension funds—for police officers, firefighters, laborers, and municipal office workers. While on those boards, the treasurer can influence investment decisions and help negotiate the fees financial institutions charge to manage the tens of billions of dollars pooled between the pension funds.
Compared to other municipal government executives, the treasurer’s office has relatively little power. Historically this office hasn’t been a bastion for patronage, since there are fewer than 40 employees and their jobs require some financial expertise. The treasurer’s discretion about investments is narrowly circumscribed by state and city laws governing how taxpayer dollars can be used to generate revenue. Investments have to be safe and adhere to a slew of other proscriptions. Plus, it’s not really the elected head who’ll make minute decisions but rather the experts (hopefully) they hire—that’s what Belsky’s joke is getting at.
Still, Belsky says there’s a benefit to the city when the treasurer takes a more public role, even if it’s mostly symbolic. “It’s a citywide elected official and the job is financial in nature,” he says. “It certainly is a value to taxpayers to have someone who is willing to suggest ideas, engage in the debate on the city’s finances. It’s really up to the person who’s in the office: They could just simply sit there and follow the statutes and go to pension fund meetings and vote. Or they could come up with creative ways to use the city’s dollars to promote economic development, promote financial literacy.”
In recent years, current treasurer Kurt Summers has embraced this way of leading the office. The city treasurer has undertaken various personal finance education efforts and promotes resources for small business development. Summers also developed the idea of a “Catalyst Fund,” which would use $100 million in city funds generated through investment returns and matching dollars from private investors to offer low-interest business loans in struggling communities. The fund, however, has yet to make a single loan; its slow birth could be due to political tension between Mayor Rahm Emanuel (who’s supposed to appoint the board that would manage the fund) and Summers. Progressive critics like 35th Ward alderman Carlos Ramirez-Rosa and 32nd Ward alderman Scott Waguespack have also been skeptical of the idea because, they’ve said, no mechanisms were put in place to actually guarantee investments in underserved areas and prevent conflicts of interest between appointed fund managers, their political backers, and loan recipients.
The skepticism may be warranted, since the treasurer’s office has for many years been a site of political wrangling and politicized decision-making. The current election is the first time since 1999 that the city has had a contested race for treasurer. And it’s the first time in decades that voters can choose between two new candidates, neither of whom are already a mayoral appointee to the office. Between 1979 and 1989 the office was held by Cecil Partee. Upon the election of Mayor Richard M. Daley, Partee was appointed to replace him as Cook County State’s Attorney. Daley’s handpicked replacement, Miriam Santos, was the first Latinx politician to hold a citywide elected office in Chicago.
Santos, too, was the treasurer for a decade, continuing to win elections even after her relationship with Daley soured when she sounded the alarm on the city’s mismanagement of pension funds in the early 1990s. Indeed, she even won reelection while under federal indictment for mail fraud and attempted extortion in 1999. A few months later, she was convicted and was forced to resign. Daley appointed a short-lived replacement, Barbara Lumpkin—short-lived because Santos’s conviction was overturned, which allowed her to leave prison after four months and reclaim her elected position with back pay. She had to re-resign six months later after pleading guilty to a single count of mail fraud rather than face retrial. Santos got time served and retired from public life.
“The mayor has wanted to control who the treasurer is because the treasurer has access to financial information that could be embarrassing to the mayor,” says University of Illinois at Chicago political science professor and former 44th Ward alderman Dick Simpson, referencing the feuds between Daley and Santos. “The treasurer’s office is rather limited but it also has the potential to either help promote the kind of policies that the mayor wants or [the treasurer can] go out on their own.”
Daley’s next pick for the job was trusted ally Judith Rice, who sailed through an uncontested election in 2003 and unexpectedly resigned in 2006. After that, Daley appointed Stephanie Neely, who left the job for the private sector in 2014. Emanuel picked Summers as her successor.
Now that the voters finally get to choose, Conyears-Ervin and Pawar are trying to convince them it’s a choice worth considering seriously.
Conyears-Ervin, who has a bachelor’s degree and an MBA in finance, is a relative newcomer to politics. She was first elected to represent the 10th State House district on the west side in 2016, after more than a decade of working for Allstate.
In her time as a legislator she’s sponsored more than a dozen social welfare bills, including a reduction of state sales taxes on condoms, diapers, and baby wipes; bolstering teachers’ collective bargaining rights; and expanding food stamp access for the elderly, homeless, and people with disabilities. She’s also introduced a bill creating a new crime called “streetgang member loitering” which, if passed, could disproportionately criminalize black and brown youth. (A similar city law was struck down by the state Supreme Court as unconstitutional in the 90s.)
After an uncontested reelection last November, Conyears-Ervin, 43, has been propelled in the treasurer’s race by politicians including Dorothy Brown, Willie Wilson, and all of the area’s black U.S. representatives, and a slew of labor groups including the rare combination of the Chicago Teachers Union and Fraternal Order of Police. She’s campaigned on her educational background in finance, her understanding of the needs and challenges of Chicago’s black neighborhoods, and her plans to pressure the banks where the city parks its money—such as JP Morgan Chase and Bank of America—to eradicate banking deserts.
“It’s important that we leverage the office of city treasurer to help working families,” Conyears-Ervin said on the phone from Springfield last week. “One of the first things I’m going to work on is to bring in the CEOs of financial institutions and we’re gonna make certain that we speak to them and I expect a plan for the unbanked and underbanked population.”
The state rep wants credit unions to be included as municipal depositories. “Credit unions are more inclined to provide capital and financing in underserved communities,” she noted. “A couple of million dollars to a credit union [would] help provide capital and financing to residents” for starting businesses or buying homes. She’s also proposing to move the City Council’s Office of Financial Analysis under the auspices of the treasurer to be a financial watchdog over Chicago’s legislators, and to create new auditing powers for the treasurer to analyze city and CPS finances.
Conyears-Ervin’s biggest donors are labor unions and their associated PACs as well as political committees tied to her husband, 28th Ward alderman Jason Ervin, and other west side elected officials. Among those who’ve given heavily to her campaign coffers (which now tally more than $920,000) is Leaders for Tomorrow, which is an unregistered PAC led by Cornelius Griggs, the president of GMA Construction Group. GMA is one of the AECOM subcontractors that was awarded the contract for the controversial new police and fire training academy in Conyears-Ervin’s district.
Though unregistered PACs can be fined by the State Board of Elections, accepting money from them doesn’t constitute a violation for a candidate. A spokesman said that the Board is working with the group to “straighten out” the registration issue. Griggs said he wasn’t aware that the PAC was unregistered and that Leaders for Tomorrow consists of dozens of “individuals under 40” looking to back progressive candidates supporting minority- and women-owned small businesses. He added the PAC had given to other candidates over the last six months but wouldn’t say which ones, and the state has no records of donations to anyone but Conyears-Ervin.
Many have attributed Conyears-Ervin’s political rise to her marriage. She says it’s fair to ask about her relationship with Ervin, but denied it’s the reason for her success. She also hinted that there’s something sexist about the scrutiny. “I do believe there’s some questions asked of me that’s not asked of the male candidate in the race,” she said, bringing up the fact that Pawar’s wife, Charna Epstein, used to work as his chief of staff.
On the way to a campaign appearance with the striking Chicago Symphony Orchestra musicians last week, Pawar took offense to the insinuation that there was something improper about Epstein’s work with his office. “We went to grad school together, wrote a book together, we’ve worked together . . . she’s my best friend,” Pawar said, claiming that their romantic relationship developed after she left the job in the early months of 2014. (The two were married in December of that year.) The alderman also expressed disappointment that his opponent has repeatedly emphasized that she’s the only candidate born and raised in Chicago, saying that such statements are part of a “coded language” that’s “playing on the existing black and brown divide.”
“I was born and raised in Rogers Park,” he added. “We moved to the suburbs because no one would sell my parents a house at the time.” Pawar’s parents are immigrants from India. After graduating from Maine East High School in Park Ridge, Pawar attended college in Missouri but came back for three master’s degrees at IIT and the University of Chicago. “I’ve served this city for the last ten years, but even if I wasn’t born here what difference would that make? Why does that matter?”
Thirty-eight-year-old Pawar, who was first elected in 2011 and is abiding by a self-imposed two-term limit, is proposing changes to state and local laws that would allow the creation of a public bank. He discounts the notion that private banks can be convinced or regulated into serving neglected communities. “People have been trying to bank the unbanked by putting pressure on the banks for two decades—there hasn’t been a major change in how those banks behave,” he says. Indeed, the federal Community Reinvestment Act, which was passed in 1977 to force private banks to remedy the effects of racist redlining policies and discriminatory lending, has fallen short on many fronts. “We’re one of the biggest actors in the market, we can take our money and investment power and launch our own vehicle to invest in each other,” Pawar said of the city’s purse.
In Pawar’s vision a Chicago public bank, capitalized by investment returns as well as money from the pension funds and state deposits, would refinance student loans, lend to small businesses, and finance affordable housing development and infrastructure projects. Currently, only North Dakota has a public bank, which doesn’t lend directly to consumers and businesses. But there’s a growing movement across the country to establish public banks, which were relatively common at the state level in the 19th century.
Pawar’s critics say a public bank would put taxpayers’ money at too great of a risk. Some write the idea off as a flashy, progressive proposal and are skeptical of Pawar’s ability to follow through. He’s backed many pro-labor measures in City Council and was the chief sponsor of the ordinance that created an Office of Labor Standards to enforce the city’s minimum wage and sick leave laws. However, he’s been criticized for a too-cozy relationship with Rahm Emanuel (who recently asked him to lead a task force exploring a universal basic income program for 1,000 Chicagoans) and for missing half of the City Council meetings in his second term, during which he also ran for governor. Though his biggest campaign donors are service and construction workers’ unions, Pawar’s other financiers include high-speed trading tycoon William Hobert and billionaire asset manager/Emanuel’s top donor Michael Sacks (and relatives of both men). His campaign war chest stands at about $520,000.
The alderman denies that these ties discredit his progressive bona fides, and said that his relationship with Sacks developed “because we see eye to eye on student loans and affordable housing.” He also cited endorsements from U.S. Representatives Jan Schakowsky, Mike Quigley, and Jesus “Chuy” Garcia, both the Tribune and Sun-Times, and several progressive-leaning aldermen.
Asked what he’d do as treasurer based on the powers and capacities the office currently has, Pawar promised to disinvest city money from fossil fuels and move “immediately” to publish a report on how much the city pays in fees to the private banks that hold and manage its money. He said he’d push the pension fund boards to do the same, so that taxpayers know how much large financial institutions profit off managing taxpayers’ dollars. “One thing that often doesn’t get talked about is a lot of these investment vehicles charge you 1 percent a year in fees—that’s 1 percent of principal whether you’re up or down. Over ten years that’s compounded.” He favors a Warren Buffet-style investment approach that would put city money behind index funds (like the kinds most people’s retirement accounts are pegged to), which deliver steady long-term returns.
Whatever the outcome of this election, the chances that the city treasurer will revolutionize anything about anything are slim. The person holding that office can be an advocate for bold new ideas, and help push other executives and legislators in a progressive direction. Or they can do none of that and still be effective in their duties.
The bottom line, Belsky said, is that the treasurer’s office “has to have a high level of integrity and honesty because this is an office where you are handling taxpayers’ dollars and you don’t want to put those at risk and be dishonest about how they’re performing.” Simpson, meanwhile, recommended that to be effective as treasurer “you want to be friendly with the mayor.” In other words, this isn’t exactly a great spot for those seeking to climb higher up the political ladder. If the treasurer is seen as a threat by the mayor—the way Summers, a protege of Toni Preckwinkle, was seen by Emanuel as several sources contended—their initiatives aren’t likely to get far.
Both Conyears-Ervin and Pawar have vowed to finally get Summers’s Catalyst Fund off the ground, but that will depend on their working relationship with the new occupant of the fifth floor of City Hall. Neither candidate would speculate on the pros and cons of working with either Preckwinkle or Lori Lightfoot. v
Correction: An earlier version of this story incorrectly stated that Pawar was endorsed by United Working Families. The group did not endorse any candidates for treasurer.