The former head of the scandal-tainted United Neighborhood Organization and its charter-school network settled a wrongful-termination suit filed by his former top deputy after a judge ordered a powerful alderman and others to testify in the case, court records show.
The terms of former UNO chief executive Juan Rangel’s settlement with Miguel d’Escoto, who was forced out in 2013, weren’t disclosed.
Through a spokesman, d’Escoto declined to comment. Rangel and his lawyer did not return messages.
D’Escoto — who previously was city transportation commissioner under former Mayor Richard M. Daley — made $200,000 a year as senior vice president of operations for the politically connected organization when it ran what at the time was the city’s largest network of taxpayer-supported charter schools.
D’Escoto was forced out in February 2013, eight days after the Chicago Sun-Times reported UNO had paid millions of dollars to two companies owned by his brothers Federico d’Escoto and Rodrigo d’Escoto. The money came from a $98 million state school-construction grant to UNO that was shepherded through Springfield in 2009 by House Speaker Michael Madigan, D-Chicago.
The Sun-Times report led to Rangel’s firing and civil sanctions against UNO by the federal Securities and Exchange Commission.
D’Escoto filed the lawsuit against UNO and Rangel in 2014. He said he’d been made a scapegoat even though he “had no role in the decision-making process” of hiring Federico d’Escoto’s d’Escoto Inc. and Rodrigo d’Escoto’s Reflection Window Co.
The courts threw out his case against UNO but refused to dismiss the complaint against Rangel, who’d been a significant player in Chicago politics. He was co-chairman of Mayor Rahm Emanuel’s 2011 campaign and was a political ally of figures including Madigan, Daley and Ald. Edward Burke (14th).
Court records show Rangel and d’Escoto settled out of court on Dec. 2 — the day that a judge had set as the deadline for testimony in the case from:
• Ald. Danny Solis (25th), a key Emanuel ally who was the leader of UNO before Daley appointed him to the Chicago City Council in 1996 and Rangel succeeded him.
• Mary Patricia Burns, a lawyer for UNO with ties to Madigan.
• Eric Sedler and Eric Herman, whose Chicago public relations firm was founded by Democratic consultant David Axelrod. The company, then known as ASGK Public Relations, worked with Burns’ law firm to blunt fallout from the UNO scandal.
Cook County Circuit Judge Patrick J. Sherlock had ruled that Solis, Burns, Sedler and Herman each “must appear before Dec. 2, 2016 for their deposition” by d’Escoto’s lawyer and ordered each to sit for 1½ hours of questioning under oath.
Solis says he couldn’t answer d’Escoto’s lawyer’s questions anyway: “I was gone from UNO for 18 years” by the time d’Escoto was forced out.
One former longtime UNO official did appear for a deposition before the case was settled. But Phil Mullins, who’d been chief strategy officer, refused to answer nearly every question posed to him under oath on Nov. 9. A transcript of his deposition shows Mullins responded to 30 questions by asserting his Fifth Amendment privilege against self-incrimination.
For years, UNO was getting tens of millions of taxpayer dollars a year from its charter-school network, which serves mostly poor, Hispanic students in neighborhoods across the city.
But state officials froze the last $15 million that was left from the 2009 grant after the Sun-Times’ reports, saying the deals with d’Escoto Inc. and Reflection Window violated conflict-of-interest clauses in UNO’s grant agreement.
And the SEC filed civil fraud charges against UNO and Rangel for not revealing the insider deals to bond investors. UNO settled the SEC case in June 2014, instituting reforms.
The UNO Charter School Network has since severed ties with the nonprofit community organization.
Rangel — who was pushed out from his $275,000-a-year job at UNO in December 2013 — agreed to pay a $10,000 fine last year to settle the SEC’s civil fraud case against him.
Once one of the most influential players in Latino politics in Chicago, Rangel now runs a consulting firm.