Mayor: City wrong to compel donations to After School Matters

The city should not be dictating which charities recipients of city subsidies should donate to, Mayor Rahm Emanuel said Wednesday, attempting to walk a political tightrope on allegations of favoritism against an after-school charity run by former First Lady Maggie Daley.

One day after Inspector General Joe Ferguson shined the light on $915,000 in city-mandated contributions to After School Matters, Emanuel acknowledged that it was wrong for City Hall to compel such charitable giving as a condition of receiving city help through tax increment financing (TIF) funds.

But, as a former board member of After School Matters whose wife still serves in that capacity, Emanuel was clearly uncomfortable with the subject.

“What I don’t want to see happen is because of one report that we shut down after school activities that will affect everybody’s neighborhoods and their children. I want to keep encouraging corporations to step up in the public way they have done,” the mayor said.

“The question is, if TIF is not the right vehicle, how do we still do this and what are the reforms necessary? We’ll take the appropriate steps so there’s clarity to that.”

He added, “I believe in the economic benefits and job creation of TIFs. That doesn’t mean we are not for reforms necessary to the TIFs to make sure that people are not being in any way told what to do but they do it correctly.”

After the news conference, the mayor’s communications director Chris Mather was even more emphatic about the impropriety uncovered by the inspector general.

“Absolutely not. The city should not be telling grant recipients that they have to donate to specific charities,” Mather said.

“To ensure that there is absolutely no question as to whether or not this is acceptable, the mayor has asked [Community Development] Commissioner [Andy] Mooney to immediately install whatever safeguards are necessary.”

Ferguson has fast become a thorn in Emanuel’s side as he was to Daley. He has issued a string of politically-explosive audits and served up a tantalizing menu of 63 cost-cutting and revenue-raising ideas that together would put Chicago on a $3 billion roadmap to financial stability.

Emanuel was forced to shoot down the most controversial of Ferguson’s ideas, including imposing a city income tax and installing toll booths on Lake Shore Drive.

Earlier this week, the inspector general dropped another political hot potato in the new mayor’s lap.

He charged that After School Matters, the charity Maggie Daley founded to occupy and educate teenagers, received $915,000 in contributions over a 10-year period from companies that received tax increment financing subsidies from the city.

According to Ferguson, After School Matters was the beneficiary of 59 percent of the redevelopment agreements that directed charitable contributions to non-profits.

Even more troubling, TIF recipients interviewed by Ferguson’s investigators reported that, in the vast majority of cases, the charities were “unilaterally chosen” by the city with no specific standards for making those decisions.

After School Matters responded by claiming the suggestion that companies were compelled to donate to the award-winning charity as a condition for receiving city help was “flat-out false” and an insult to Maggie Daley’s life’s work on behalf of Chicago teenagers.

After School Matters was an outgrowth of Gallery 37, the award-winning arts and education program at Block 37 in the North Loop that celebrated its 20-year anniversary last month at a gala attended by Emanuel and many of the city’s movers and shakers.

The non-profit had an annual operating budget of $27.5 million in 2010. Since 2004, the organization has received more than $54.5 million in city funds through eight city grants for operating expenses and special programs, according to the IG’s report.

The most recent grant – for nearly $6.5 million – was made on May 12, just four days before Maggie Daley’s husband, former Mayor Richard M. Daley, left office.