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Chicago aldermen get rare warning on city contracts

The letter from corporation counsel Mark Flessner warns aldermen not to cross the line when it comes to demanding minority participation in city contracts. Ald. Ray Lopez called the letter “a little bit insulting.”

Chicago City Council, meeting on May 29, 2019.
One alderman said it was “insulting” to get a warning from the mayor’s corporation counsel.
Sun-Times file

In a move that outraged Mayor Lori Lightfoot’s harshest critics, corporation counsel Mark Flessner warned Chicago aldermen on Tuesday not to cross the line when it comes to demanding minority participation on city contracts.

Flessner’s letter comes just weeks after aldermen stalled a cargo expansion project at O’Hare Airport — and $55.6 million in bonds to help bankroll the next phase of work — after complaining that Aeroterm had failed to meet its hiring and contracting benchmarks on the first two phases of the cargo project.

Flessner’s letter, dated Tuesday, didn’t mention the Aeroterm controversy.

It simply warns aldermen how far they can and cannot go “when a proposed transaction comes before a committee for consideration.”

Aldermen have every right to “express concern about particular vendors that may be part of a particular transaction,” Flessner wrote. But, they “may not demand the inclusion or exclusion of particular vendors or categories of vendors, such as by race or ethnic origin in order to secure their vote.”

If a transaction is presented to Council committee in which “individual companies have formed clear contractual plans or binding alliances,” any aldermanic “demand for the inclusion of a different vendor or exclusion of a planned vendor could be an interference with those contractual relations” that could result in “civil court action” against the alderman, the city or both, Flessner warned.

“Therefore, I strongly caution against any actions or comments that appear as a demand for the inclusion or exclusion of any vendor by name or race or ethnicity to a particular transaction,” the corporation counsel wrote.

The same goes for the city’s set-aside requirements for businesses owned by minorities and women.

By law, set-aside goals for each transaction are established “in accordance with the availability of vendors in the local marketplace” after a “disparity study conducted by subject matter experts,” Flessner said.

Therefore, it is imperative for aldermen to “avoid trying to unilaterally amend the terms of a deal” and set specific goals for including businesses owned by minorities and women, the corporation counsel said.

If aldermen “have questions about how those goals were determined” or about “measures to ensure compliance,” all that is fair game, he wrote.

“What is not appropriate and could result in legal liability is `on the fly’ attempts to re-write city law and impose new requirements on a transaction during a committee hearing. Those kinds of actions are not appropriate and are legally difficult to justify,” Flessner said.

Flessner said there is a “significant difference” between asking questions in a committee hearing or “even making suggestions as to whether a particular proposal can be amended” and insisting that a proposed ordinance be “drastically and fundamentally amended through the imposition of compelled concessions unrelated to that ordinance as a pre-condition for committee approval.”

“The former is defensible. The latter is difficult to justify,” he wrote.

Ald. Ray Lopez (15th), one of Lightfoot’s most outspoken City Council critics, said he can’t remember a corporation counsel issuing such a sharply-worded warning to aldermen about how to conduct themselves.

“It is a little bit insulting. It’s fairly obvious that no alderman should be using the legislative process as an end-run to steer business towards a particular vendor. We know that. We’ve seen plenty of that kind of stuff in the headlines all the time. I don’t know why anyone would think we need a refresher course,” Lopez said.

Lopez was apparently referring to the ongoing federal corruption scandal that led to the indictment of Ald. Edward Burke (14th). Burke is accused of muscling businesses — including the developer of Chicago’s Old Post Office — to hire his law firm, which specializes in property tax appeals.

“If anything, this should motivate my colleagues to engage in the discussion around increasing” goals for minority and women-owned businesses, Lopez said, “so we don’t have to worry about what Flessner calls the ‘on-the-fly’ amendments. Why don’t we just raise them now and be done with it?”

Ald. Anthony Beale (9th), another Lightfoot critic, was livid about Flessner’s letter.

“If we cannot advocate for more minority participation, then we might as well get rid of” such programs. “Because the only way we can continue to move forward with getting a bigger piece of the pie is to advocate for our community,” Beale said.

“If it’s his goal for us to not advocate for our community, that will set us back over 40 years in the fight for equality. We still don’t get our fair share of contracts. We have to make these contractors do the right thing. If he won’t defend us, then he needs to resign.”