Lori Lightfoot orders review of Rev. Leon Finney Jr.’s ‘significant portfolio’ of CHA buildings

The Rev. Leon Finney Jr. has “done good work over the course of his life,” and his downfall is “clearly disappointing,” Mayor Lori Lightfoot said Monday.

Lightfoot said she has ordered a review of Finney’s “significant portfolio” of public housing after the Chicago Sun-Times shined a light on a federal judge’s stunning allegations of fraud, self-dealing and mis-management against Finney’s former nonprofit.

“I read those articles. I was surprised. I mean — Leon Finney obviously has been an iconic person ... When someone of his stature falls, clearly it’s disappointing,” the mayor said.

Lightfoot was asked whether former Mayors Richard M. Daley and Rahm Emanuel had been too lax in policing Finney’s stewardship of CHA properties because of Finney’s role as a perennial power player in Chicago politics.

Ashlee Rezin Garcia / Sun-Times

Finney backed Cook County Board President Toni Preckwinkle over Lightfoot in the mayoral election earlier this year.

Lightfoot never answered the question directly, saying only that she plans to take a closer look in light of Finney’s new troubles.

“Obviously, we have to look at that and make sure because he had such a significant portfolio of CHA business. We are looking and making sure that everything there was compliant with our ethics ordinance to make sure that it’s compliant with all the relevant laws,” the mayor said.

CHA spokesperson Molly Sullivan had no immediate comment on the nature of the review ordered by the mayor’s office.

Ashlee Rezin Garcia / Sun-Times

Lightfoot is in the process of conducting a nationwide search for a new CEO after Chicago Housing Authority CEO Eugene Jones Jr. abruptly resigned last month, ending a highly acclaimed, 4-1/2-year run that brought stability to an agency that sorely needed it and compassion to public housing residents.

City Hall sources insisted then that the decision to step down more than a year before his $291,500-a-year contract expired was made by Jones alone. He was not pushed out the door. To the contrary. The mayor wanted him to stay.

And CHA sources have insisted Jones’ resignation had nothing to do with Finney’s troubles.

Judge Carol A. Doyle is presiding over the bankruptcy case for Finney’s Woodlawn Community Development Corporation.

Doyle has called Finney’s decision to divert payroll taxes from the Chicago Housing Authority “equivalent to the theft of the employees’ wages,” court records show.

In the past decade, Finney’s nonprofits have collected more than $20 million in taxpayer money while managing about a quarter of all public housing units in Chicago.

In April, as the bankruptcy proceeding ramped up, the CHA sought permission to sever ties with The Woodlawn Organization.

While the bankruptcy proceedings initially revealed that Woodlawn owed the IRS $1.8 million, an updated claim against the nonprofit now seeks $4.2 million in taxes, interest and penalties.

After Finney’s initial claim of complete surprise at the unpaid payroll taxes, he reversed course during his deposition and said the company skipped a quarterly payment to free up $150,000 to forestall foreclosure on a Woodlawn property at 63^rd Street and Woodlawn Avenue, records show.

Doyle said she was “basically obligated” to inform federal prosecutors of Finney’s contradicting statements, but it was unknown whether she had done so.

The bankruptcy case also exposed allegations of self-dealing against Finney involving his control of a strip mall in the 1500 block of East 63rd Street.

Woodlawn owns the strip mall but began leasing it to Lincoln South Central Real Estate Corporation in 2013. At the time, Finney led Woodlawn and controlled Lincoln South Central. Few, if any, rent payments were ever made to Woodlawn, according to records in the bankruptcy case.

In court, Doyle accused Finney of “pocketing the rents” from Lincoln South Central’s subtenants rather than pay the nonprofit he headed.

Finney has declined to talk to the Sun-Times or to answer questions submitted in writing. A statement from his spokesman did not address any questions surrounding Finney’s financial dealings.

Contributing: Jon Seidel, Carlos Ballesteros, Rachel Hinton, Tom Schuba

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