Juan Rangel left his job as chief executive officer of the taxpayer-subsidized United Neighborhood Organization amid a scandal, but he didn’t go away empty-handed, records obtained by the Chicago Sun-Times show.
Rangel got a payout of $206,250 when he was “terminated” in December 2013 by UNO, the longtime operator of one of the city’s biggest taxpayer-funded charter-school networks.
That’s according to records UNO fought for more than a year to keep secret.
When Rangel left following reports in the Sun-Times revealing UNO had paid millions of dollars from a $98 million state school-construction grant to contractors owned by brothers of his top deputy, Miguel d’Escoto, UNO officials said it was “by mutual agreement.”
In its tax returns the following year, though, the private, not-for-profit organization said it “terminated” Rangel from his $250,000-a-year post as the leader of one of the city’s most influential Hispanic groups.
Less than two months after Rangel departed, UNO’s board chairman, Freddy Santiago, signed a severance deal providing the lump-sum payment of $206,250, according to the records obtained by the Sun-Times.
That “confidential separation agreement and general release” also gave Rangel the right to continue to receive health insurance through the organization for six months.
In exchange, Rangel promised not to sue UNO, the records show.
Santiago promised to make the terms of the severance deal public once it was finalized. Instead, UNO refused until now to release that information.
“The severance with Juan Rangel, while unfortunate, was necessary and not out of line with the practice of private and other nonprofit organizations with regard to CEO packages,” Santiago says. “The board stands by its decision. More importantly, it has upmost confidence in our new, reform CEO Rick Cerda, who has ushered in best practices and a culture of accountability.”
Rangel, 49, began working for UNO in 1992. He became chief executive in 1996, replacing Danny Solis when then-Mayor Richard M. Daley appointed Solis to fill a Chicago City Council vacancy.
Rangel, who was UNO’s CEO for 17 years, founded what became one of the city’s largest government-funded charter-school networks in 1998. It now has 16 schools, all in Chicago, with about 8,000 students.
The privately run schools are funded almost entirely with taxpayer dollars coming through the Chicago Public Schools. In recent years, UNO has gotten the vast majority of its revenue from managing the schools.
Even after the UNO Charter School Network — which formerly shared offices and most of its board members with UNO — began operating with a separate board in a post-scandal reform, UNO continued to run the schools under a management contract through June 26. It’s now fighting to hold onto its management deal,
Rangel, who didn’t respond to interview requests, cultivated key political supporters over the years. Among them were Mayor Rahm Emanuel, whose first mayoral campaign he co-chaired; Illinois House Speaker Michael Madigan, who pushed through the $98 million state grant to UNO; and Ald. Edward Burke (14th).
But Rangel saw his clout slip away after the Sun-Times reports on the insider dealings prompted the state to withhold millions of dollars remaining in grant funding and the federal Securities and Exchange Commission to step in.
Rangel offered a public apology for the insider deals in May 2013, saying he’d “failed to exercise proper oversight.”
But that wasn’t enough to hang onto his job.
The SEC investigation led to civil charges — which UNO agreed to settle last year by agreeing to outside oversight — that the group had defrauded bond investors on Rangel’s watch.
In addition to the state grant, which helped UNO build four new schools, it also borrowed tens of millions more by issuing bonds. The SEC accused it of misleading bond investors about the insider deals and about the threat the contracting scandal posed to the organization’s finances.
The SEC also said Rangel had made false statements during a March 2013 conference call with investors in UNO bonds.
Rangel has kept a low public profile since leaving UNO. In October, he started a company called Mastery Consulting LLC. Rangel is the only officer of the company, according to documents he filed with the state that list Mastery’s address as his home in Little Village.
Rangel’s business card says the firm offers “strategy/planning/public affairs” services. In an online business networking profile, he says he provides help with community organizing, “adept political acumen,” leadership development and other services.