Early last year, Mayor Rahm Emanuel helped out developer Dan McCaffery by backing McCaffery’s controversial plan to transform the former Children’s Memorial Hospital site in Lincoln Park into apartments, condos and stores.
After the Chicago City Council approved the project in April 2014, McCaffery, his wife and an executive with his McCaffery Interests development company contributed $65,900 to the mayor’s campaign fund between June 30 and Nov. 24.
Asked whether there was a connection between his projects getting approved and the contributions to Emanuel, McCaffery says, “Never. No way.”
It’s not the only time Emanuel has gotten campaign contributions from people who have benefited from actions he or city agencies or pension funds have taken, according to a Chicago Sun-Times examination of the nearly $30 million amassed so far by: the mayor’s campaign committee; a second campaign fund he controls; and a super PAC that supports Emanuel and aldermanic candidates he backs.
About 5 percent of that total — $1.7 million — has come from developers; from employees of companies that do business with City Hall, city pension funds or city agencies; and from Chicago’s two financial exchanges, which Emanuel has supported by speaking out against proposals that would tax stock and futures trades.
Emanuel also appears to be benefiting from the post-recession rise in privately financed building projects approved by the city on his watch, as well as from big-ticket public works initiatives including the CTA Red Line reconstruction and the Chicago Riverwalk extension. Unions representing plumbers, electricians, ironworkers and others put to work by those projects have given the mayor’s two funds and the super PAC nearly $1.9 million since Emanuel left his post as White House chief of staff for President Barack Obama and came home to run for mayor.
That money, along with millions more that has come in from 39 states and Washington, D.C., has helped push Emanuel’s fundraising total to $29.8 million since 2010, records show.
And that’s not counting another $1.1 million that Emanuel, who formerly represented a Northwest Side district in Congress, transferred to his mayoral fund from his congressional campaign fund.
The mayor’s fundraising might be even higher if not for an executive order he signed in 2011 that bans city contractors, subcontractors and their owners and spouses from giving money to his Chicago for Rahm Emanuel fund.
The mayor also voluntarily applies the terms of the order to his second fund, The Chicago Committee, which supports state and local candidates, says Emanuel campaign spokesman Steve Mayberry.
“The contributions noted are fully compliant with the law and the higher standards the mayor voluntarily imposes on himself,” Mayberry says.
The order doesn’t ban contributions, though, from employees of companies that have city business. Nor does it bar contributions from employees of financial firms that invest city pension money. Nor does it apply to the Chicago Forward super PAC, created by Rebecca Carroll — a former Chicago Public Schools communications chief — to help aldermanic candidates who support the mayor’s agenda.
When Carroll formed Chicago Forward in June 2014, Emanuel’s mayoral fund was bound by the state’s $5,300-per-person contribution limit. A super PAC can take in unlimited contributions, though state law bars it from coordinating with or contributing money directly to Emanuel or any other candidate.
Since the super PAC was started, fundraising limits in the mayor’s race were lifted when a would-be candidate who later decided not to run, William J. Kelly, filed papers showing he’d given himself $100,000 for a possible mayoral bid. That allowed other mayoral candidates to raise unlimited funds.
Though Kelly decided not to run, his maneuver has allowed Emanuel’s campaign committee to begin accepting big campaign checks — including $50,000 from McCaffery on Nov. 24 — that otherwise might have been written to Chicago Forward. Emanuel can transfer the money to candidates he backs.
Emanuel’s haul totals more than four times the combined amount of money that his four challengers in the city’s Feb. 24 election have raised in their entire political careers, state records show. His total includes:
- $246,600 from developers whose projects have won, or will need to get, city approval. Besides McCaffery, it includes $75,000 from Mark Fishman, who got Emanuel’s approval in 2012 to have the city subsidize his $5.6 million redevelopment of the century-old Logan Theatre and eight adjacent storefronts in Logan Square with $1 million in tax-increment financing. Mayberry says Fishman’s contributions “had no influence on the project,” noting that the city’s Community Development Commission recommended TIF assistance for Fishman’s project shortly before Emanuel took office in 2011. Had Emanuel not acted on that recommendation, though, Fishman probably wouldn’t have been able to win City Council approval for the subsidy, which he did in 2013. Emanuel’s administration also is allowing liquor sales at the theater complex, which also includes 18 upper-floor apartments, four of which have been set aside as affordable housing.
- $741,000 in contributions from lawyers, executives and others who do business with the city, the Chicago Park District, the city’s schools and the Public Building Commission of Chicago. Of that, $134,000 came from attorneys with the firm Jenner & Block, which city records show has been paid more than $4.3 million by City Hall in the past three years, and $112,500 from lawyers with Winston & Strawn, which has gotten $362,332 from the city, mostly for work on bond deals.
- $134,782 from employees of United Airlines and American Airlines, whose operations are heavily affected by leasing, runway and jet noise-abatement decisions made by Emanuel’s aviation department. American Airlines spokesman Matt Miller says, “These donations were made by individuals, not American Airlines. It’s not unusual for executives to contribute to people they support. I’m sure they have great respect for Mayor Emanuel and for what he’s done for the city and his constituents.”
- $262,500 and $35,000, respectively, from the Chicago Mercantile Exchange and the Chicago Board Options Exchange, the trading hubs that Chicago Teachers Union president Karen Lewis and others have said should be subject to taxes on stock, futures and other trades. Emanuel has opposed the transaction-tax idea, calling it illegal.
- $127,600 from a political committee for Illinois employees of AT&T, which charges City Hall about $15 million a year for phone and data services.
- $205,400 from executives of eight companies that manage city pension money — contributions that Emanuel’s critics have seized upon.
Prompted by a series of stories in the International Business Times, Ald. Scott Waguespack (32nd), Ald. John Arena (45th) and Ald. Robert Fioretti (2nd), who is running for mayor, have asked the Securities and Exchange Commission to investigate whether the pension-related contributions violate federal law.
They’ve also asked the SEC to examine contributions linked to financial firms such as Madison Dearborn Partners, whose employees have given $405,900 to Emanuel.
Madison Dearborn — whose chairman is John A. Canning Jr., an investor and director in Wrapports, parent company of the Chicago Sun-Times — doesn’t have any contracts with city pension funds.
A money manager that does have a contract, Adams Street Partners, has invested city pension cash with other investment funds, including funds overseen by Madison Dearborn.
In their Nov. 18 letter to the SEC, the aldermen wrote, “It is our understanding that SEC Rule 206(4)-5(a)(1) specifically prohibits municipal investment advisers and all of their firms, including pooled investment funds or ‘fund of funds,’ ” from being paid by a government pension fund “within two years after contributing to any campaigns or political action committees of public officials who oversee or exert influence over the funds and advisers.”
An SEC official replied Dec. 9 that “the commission’s staff will consider carefully the information” the aldermen provided.
An SEC spokeswoman would not comment.
Mayberry says the agency hasn’t contacted the Emanuel campaign.
Madison Dearborn says it “is in full compliance with all SEC rules and legislation, including the SEC’s explicit guidance dated July 1, 2010, regarding fund of fund investors” and that “none of Chicago’s pension funds are a limited partner in any Madison Dearborn funds.”
Ariel Investments, which has managed city pension money since the 1980s, was paid about $1.3 million in fees in 2012 and 2013, records show. Ariel President Mellody Hobson and another Ariel executive gave the mayor $35,000 between Dec. 13, 2010, and Feb. 17, 2011 — about a month before the SEC rule banning certain contributions took effect, Hobson notes.
“The rule went into effect on March 14, 2011,” says Hobson, adding that the contributions to Emanuel before then had nothing to with Ariel trying to sway him to hold onto its city pension business.
“We never felt it was in jeopardy,” Hobson says. “Our returns have been exemplary.”