House Speaker Mike Madigan is No. 1 with UNO

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Illinois House Speaker and state Democratic Party leader Michael Madigan — long a friend to Chicago’s United Neighborhood Organization — had a campaign fund-raiser last Oct. 30 hosted by the influential group’s chief executive, Juan Rangel, and its lobbyist, attorney Victor Reyes.

The turnout was good. And so was the money, records show, with UNO contractors writing checks for more than $24,000 to campaign funds controlled by Madigan, the Chicago Democrat whose district has grown increasingly Hispanic in recent years.

Madigan had given a big boost to the group’s aspirations to be a major operator of charter schools in the city when he helped it get a $98 million state school-construction grant in 2009, without any requirement for competitive bidding on the work, as government agencies typically must do. The state money helped fuel UNO’s rapid growth as the operator of publicly funded schools that offer an alternative to Chicago’s public schools in heavily Latino neighborhoods.

Millions of dollars from the state grant ended up going to family members of UNO’s political allies and of a top executive of the group, Miguel d’Escoto, the Chicago Sun-Times reported earlier this month. The stories prompted d’Escoto to resign his $200,000-a-year UNO post and triggering a state review.

After the Madigan benefit was held, a bill was introduced in Springfield on Jan. 2 that would have provided another $35.2 million in state money UNO was seeking to build more charter schools. The author of the bill, state Sen. Heather Steans (D-Chicago), says she isn’t sure who wrote the provision benefiting UNO into her broader bill.

UNO and Madigan already had their eyes on where two more charter schools could go — in Bedford Park, on property in Madigan’s district that Rangel hopes to get annexed by the city of Chicago.

With support from Springfield and City Hall, UNO has grown in less than a decade from what was primarily a Latino activist organization into one of the largest charter-school operators in the city. In 2005, it had one school. Now, it has 13 locations with about 6,500 students.

UNO’s close ties to Mayor Rahm Emanuel, whose campaign he co-chaired, and former Mayor Richard M. Daley are well known. But Madigan quietly has provided the group with perhaps its most valuable assistance.

Madigan introduced the amendment that yielded the $98 million grant to UNO in 2009. That’s believed to be the largest government investment in charter schools anywhere in the country.

The Madigan breakfast fund-raiser took place shortly before the state legislative elections in November, at Petterino’s Restaurant in downtown Chicago. In addition to Rangel and Reyes, its hosts included Federico “Fred” d’Escoto, president of d’Escoto Inc. and Miguel d’Escoto’s brother.

The Sun-Times reported Feb. 4 that d’Escoto Inc. and a company owned by another d’Escoto brother were among the contractors UNO paid with money from the state grant. Six days after the story was published, d’Escoto Inc. was suspended from getting any work from UNO pending an internal review of the organization’s contracting process. Two days later, on Feb. 12, Miguel d’Escoto resigned as UNO’s senior vice president of operations and chief of staff.

Reyes says he was the main organizer of the fund-raiser, which Madigan attended, and did so “for everything the speaker has done on behalf of the Latino community.” Reyes credited Madigan for the creation of new Latino-majority legislative districts.

Rangel declined interview requests about the Madigan fund-raiser but, in a written statement, said: “It is important that I take every opportunity to brief elected officials about the many issues facing the Hispanic community in Chicago, such as the chronic overcrowding of our neighborhood schools and the need for quality education options.”

Madigan spokesman Steve Brown says there was no connection between the contributions and Madigan’s support for UNO.

“You can draw whatever implication you want, but I don’t know any element of the Hispanic community that has not been supportive of what the Illinois Democratic Party is doing,” Brown says, adding that UNO has a “pretty good” record of academic achievement.

Regarding the UNO contracts that went to companies with ties to the group, Brown says, “I’ve not seen any reports suggesting that people who were hired to do the work didn’t do the work.”

State officials are reviewing whether UNO violated conflict-of-interest restrictions in its grant contract.

In addition to the two d’Escoto brothers, contractors hired by UNO and paid with state money included Reyes’ sister and the brothers of state Rep. Edward Acevedo, a Chicago Democrat who voted to approve the grant.

The $98 million grant came after lobbying by Reyes and former Madigan aide Mike Noonan, who served as campaign manager for the speaker’s daughter, Lisa Madigan, when she was first elected attorney general in 2002.

At the October fund-raiser for Michael Madigan, the hosts also included the Roosevelt Group lobbying group — led by Reyes and Noonan — and the Reyes Kurson law firm.

UNO recently hired Reyes’ law firm to lobby for a zoning change from City Hall for a new high school on the Southwest Side, city records show. Construction, expected to cost $31 million, is being funded entirely by state taxpayes. Reyes Kurson will be paid an estimated $25,000 in state funds for their work on the project.

Illinois campaign-finance law doesn’t restrict contributions from state-government contractors — or from companies paid with state grant money — to state lawmakers.

Madigan and the state Democratic Party reported contributions from the October fund-raiser including:

• More than $7,000 from the political action committee for the Hispanic American Construction Industry Association, which UNO paid $40,000 in state grant money for “outreach” to minority- and women-owned contractors.

The HACIA PAC filed its “statement of organization” with state elections officials at 2 p.m. Friday, saying it was created three weeks before the fund-raiser. If that’s the case, it should have registered with the state within days of its creation in October and could face fines, according to Rupert Borgsmiller, the Illinois election board’s executive director.

• $5,000 from Wight & Co., the main contractor on UNO’s current high school project.

• $5,000 from d’Escoto Inc.

• $2,500 from Reflection Window Co. Owned by Rodrigo d’Escoto, another brother of Miguel d’Escoto, Reflection has been a contractor on every UNO project funded by the state grant.

• $2,500 from the Reyes Kurson firm.

• $1,500 from Primera Engineers Inc., a contractor for UNO on the Soccer Academy Elementary and the new high school.

• $500 from Pioneer Environmental Services, a consultant on the construction of two new, state-funded UNO schools.

Another $1,500 came from the Chicago Latino Public Affairs Committee, headed by UNO lawyer Homero Tristan.

On the flyer for the Madigan event, Rangel was described as UNO’s CEO with an asterisk by his name and a note that his title was included “for identification purposes only.” Rangel says he was acting on his own, not on behalf of UNO, which, as a non-profit organization, can’t get involved in politics without risking its tax-exempt status.

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