Daley staff forced TIF winners to give to Maggie Daley's charity, city IG charges

Posted by Greg H. at 10/3/2011 5:48 PM CDT

Former Mayor Richard M. Daley's administration forced more than a dozen firms that received city development subsidies to kick over a share of their grant to a charity run by Mr. Daley's wife, Maggie Daley.

That's the blockbuster charge in a report being released today by Chicago Inspector General Joseph Ferguson.



The report specifically deals with After School Matters, a much-praised but also politically connected youth program that for much of the past decade served as the unofficial charity at City Hall.

According to Mr. Ferguson, the city — often to the surprise of even grant recipients — required firms that got tax increment financing subsidies to donate a share of that money to specific non-profit groups.

Of the 27 grant agreements signed between 1985 and 2009 that directed cash contributions to private non-profits, at least 16, or 59%, specifically designated After School Matters or an affiliate.

Altogether, After School Matters received $915,000 through such "public benefits" clauses, according to the report. This is on top of more than $54.5 million in direct city grants since 2004.

Included in that figure is a $6.5-million contract that, as previously reported, was signed four days before Mr. Daley left office in in May.

Under an agreement with Mr. Ferguson's office, I haven't yet called the Daleys or After School Matters for their reaction. But I'm doing so now, and you can bet they'll have something to say.

Meanwhile, though, Mr. Ferguson isn't holding back.

"The frequent selection of After School Matters for public benefits creates the appearance of preferential treatment for an organization with close ties to the city," his reports states. "Regardless of the nature of the work performed by After School Matters, the lack of transparency in the city's public benefits program undermines the public's trust."

The report suggests Mr. Ferguson effectively stumbled on the TIF donations matter and that he had a hard time getting city employees to detail exactly how things worked.

The figures as to how many TIF deals, technically known as redevelopment agreements, required payments to After School Matters is only a "best estimate" from the city's law department, the report says.

Detailed data were not kept by the city, nor were any rules or standards established as to which groups should get the money, the report says.

The recipients — including such prominent firms as the Wm. Wrigley Jr. Co., LaSalle Street Capital Inc; a building in which bank ABN Amro has offices and Central Station Properties LLC — also were kept in the dark, the reports states.

In interviews with nine recipients, all but one said, "The city unilaterally chose" After School Matters as the agency to which the recipient had to make a cash donation. The recipients generally found out "during later stages of the (TIF) negotiation process."

In the ninth case, the corporation thatreceived TIF aid was headed by a former mayoral deputy chief of staff. But even in that case, the TIF contract with the city specified that TIF aid would be reduced dollar for dollar for any shortfall in required charitable donations.

One other private group actually received more money via the public-benefits clause, but only because of a $1.25-million payment to the Leland Apartments Development in one TIF project.

The city also required some TIF recipients to agree to spend money on city projects.

Mr. Ferguson's report comes at delicate time for Mayor Rahm Emanuel, who has vowed to reform but continue the TIF program.

Other groups want to tap hundreds of millions of dollars being held in reserve for TIF projects and instead use it to shore up the city budget and keep city employees from being laid off.

* * * 2 p.m. update -- Still no response from either the Daleys or After School Matters. I'm told a statement from the latter is coming, sometime today.

* * * 4:10 p.m. update -- After School Matters finally is out with a response.

In a statement, the schools group terms "flat-out false" any "impression" that TIF recipients "had to agree to donate to After School Matters." The organization termed that "an insult to the work that former first lady and After School Matters Chair Maggie continues to do."

The statement notes that "only" 16 of 73 TIF deals over the past 25 years directly benefitted After School Matters, and says the group has helped more than 200,000 school kids since 2003.

Neither the former mayor nor his wife will be available for questions, says the statement, which was issued by Jasculca Terman & Associates, a public relations firm.