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City ethics chair: Loophole could nix oversight of campaign funds

The City Council’s handpicked inspector general is appealing for more money, manpower and authority with an assist from Mayor Rahm Emanuel’s revamped Board of Ethics.

In a letter to aldermen attached to Legislative Inspector General Faisal Khan’s semi-annual report, Board of Ethics Chairman Stephen W. Beard warns that, unless the City Council moves immediately to close a legislative loophole, “Chicago will head into a municipal election year with no oversight of contributions made to aldermen or their challengers.”

The regulatory vacuum stems from ethics reforms championed by the mayor last summer and grudgingly approved by the City Council.

The ordinance empowered the Board of Ethics to levy fines triple the illegal contribution against both contributors and recipient elected officials or candidate committees. But it also shifted investigative responsibility to Khan, who can initiate investigations only after receiving signed and sworn complaints.

“Properly enforcing these laws is a pro-active business. It requires that investigators be able to comb through contributions and other government records, then initiate investigations — not sit and wait for such complaints to come in,” Beard wrote.

“The city inspector general has that authority. . . . The legislative inspector does not. This means that, for 50 of the 53 elected city offices, there is no effective enforcement mechanism for our municipal campaign financing laws. Unless this void is fixed legislatively, Chicago will head into a municipal election year with no oversight of contributions made to incumbent aldermen or their challengers.”

In his own letter attached to the June 16 report, Khan argued that an ordinance introduced by the mayor’s City Council floor leader to close the legal loophole has languished for eight months.

The vacuum “has allowed potential campaign finance violations by members of the City Council to go unchecked for the past 11 months,” Khan wrote. “It is imperative that this legal impasse end so effective oversight can begin immediately.”

Since his arrival, Khan’s annual budget has been increased from $60,000 to $260,000 last year and $354,000 in 2013 and 2014.

In the letter, Khan states his case for yet another, unspecified increase “now and for fiscal 2015.”

“While recognizing governmental fiscal constraints, an investigative agency cannot operate on a shoestring budget and still be expected to complete its mandate and engage in effective oversight,” he wrote.

Noting that his appeals for more money have been “rebuffed at every turn,” Khan wrote: “This not only greatly hinders this agency’s ability to complete its work, but continue to give rise to the claim that [the legislative IG] is not an independent and effective investigative body.”

Aldermen questioned this week were in no mood to give Khan more money or the oversight authority he seeks over City Council hiring.

They were still furious about Khan’s 2012 demand for two years’ worth of time sheets for their full- and part-time City Council employees.

They were equally upset about Khan’s decision to go public about prior investigations of aldermen they consider “penny ante” and about the legislative IG’s decision to let his chief of staff take a 10-week leave of absence to work on a legislative campaign.

“I wouldn’t give him a dime,” said Budget Committee Chairman Carrie Austin (34th).

“He came in with one attitude and, now that he’s in the job, he has changed faces,” she said. “The question that I asked when we hired him was, ‘Are you gonna be like [city Inspector General Joe] Ferguson with the, ‘I got you [mentality]?’ Thus far, that’s what he’s been. . . . He thinks he has [authority] over any and everything and listens at nothing.”

Last year, Khan accused Ald. Joe Moore (49th) of using his taxpayer-funded ward office to do political work, firing an employee who blew the whistle on it and giving the former staffer an $8,709 payment equal to 81 days worth of severance try and cover it up.

Moore tried to salvage his reputation as a self-declared champion for ethics reform by accusing Khan of violating a legal mandate to get prior approval from the city’s Board of Ethics before launching an investigation or referring matters to law enforcement; keep investigations confidential; and give the subject of an investigation notice of allegations against him.

Still, the furor over Khan’s investigation prompted the White House to put off giving Moore a good-government award — even though the alderman had traveled to Washington to receive it.

Khan’s four-year term expires at the end of 2015. His latest report claims that his office fielded 111 complaints and launched 74 formal investigations between July 15 and Dec. 31 of last year.