THE WATCHDOGS: Rush's tech center dream dead; where did $1 million go?

In 2000, in the midst of a bruising but ultimately victorious Democratic primary battle against then-state Sen. Barack Obama, U.S. Rep. Bobby Rush, (D-Ill.) launched the Rebirth of Englewood Community Development Corp.Funded with a $1 million grant from telecommunications giant SBC and the promise of another $175,000 from Congress, the not-for-profit agency’s aim was to help revive the violence-plagued South Side neighborhood, Rush said.

A key element of that, Rush and SBC said, would be the creation of the Bobby L. Rush Center for Community Technology.

“This tech center would level the playing field for economically disadvantaged students and the unemployed so that they may one day enter the field of high technology,” Rush said in an announcement posted on his congressional website. “Many communities across this nation have been mostly absent from the high-tech revolution. This technology center will help to remedy this problem by giving community residents a chance to become competitive.”

The money from SBC — now called AT&T — would go toward the center, which was supposed to teach computer skills to neighborhood residents and serve as a small-business incubator in a community that badly needed one.

And the $175,000 in taxpayer money later approved by Rush’s colleagues in Congress was supposed to buy and renovate a building near 68th and Halsted to house the facility.

More than a decade later, though, there’s no technology center. And it’s unclear what happened to the money.

“Every penny of that money went toward programs for the Englewood community,” Rush said in an interview.

But the congressman said he doesn’t know exactly where the money went. He said he didn’t run the day-to-day operation and doesn’t have records of how the money was spent.

Rush also said that, contrary to the written announcements in 2003 from his office and SBC, the $1 million never was intended for a building but, instead, for programs.

The first installment of the grant from SBC’s charitable arm came in 2001 – the same year the company was seeking support for legislation from a House committee on which Rush sits.

According to Rush, the money went for computer training at churches, libraries and other locations.

Asked what the training programs covered, Rush said: “I couldn’t answer whether they were high-tech or low-tech. A lot of it was technology. Most of it was technology. . . . Let’s stop splitting hairs.”

Rush said he didn’t know whether any of the money helped pay for other programs from Rebirth.

“That was many years ago,” Rush said. “I have no answer for that. I have no way of knowing that.”

Beside founding Rebirth, Rush served on its board, which also included his wife Carolyn Rush. His son Flynn Rush was on Rebirth’s staff as an employment placement specialist. Vincent Barnes, who was Rebirth’s executive director until 2007, previously worked on Rush’s congressional staff as legislative counsel.

According to Rush, “SBC was quite pleased with how their money was spent.”

An AT&T spokesman would not comment. In 2006, an AT&T official told the Chicago Sun-Times that company officials were “hopeful” the tech center would still open.

People formerly affiliated with Rebirth, which was dissolved in 2010, couldn’t be reached for comment or said they didn’t know how the money was spent.

“No, no, I do not,” said Stanley Rakestraw, a former Metra board member who was on Rebirth’s board at the time of the grant and was its president before Rebirth dissolved.

Stanley C. Rakestraw

Englewood businessman Johnny Smith, who served on Rebirth’s board, said he left several years after the organization got the million-dollar grant when the agency’s staff informed him the money would go to programs rather than a tech center.

“That was the first time I heard it,” Smith said. “I thought I should have been made aware of that initially.”

The $175,000 from Congress was approved in 2004 in the form of an earmark – a grant requested by a member of Congress for a specific project – for the purchase and renovation of a center, federal records show.

That summer, Rebirth bought an abandoned storefront at 6821 S. Halsted for $142,500, Cook County records show.

Architect Vernon Williams said he was paid $70,230 to complete designs for the project, including computer technology studios, office space for startup businesses and an Internet cafe. His plans also called for the nearly 100-year-old building to get a modern facade and a rooftop garden.

Rebirth staffers showed the schematics, finished in 2005, to then-Ald. Freddrenna Lyle.

“It seemed like a really good plan,” said Lyle, now a Cook County judge. “But the technology center, as it was proposed, did not come to fruition.”

Rush blames what he says were Williams’ overly ambitious and costly plans.

“I’m pointing the finger at the architect,” Rush said. “He wanted to build a Taj Mahal in Englewood with storefront money.”

Williams said the estimated cost to renovate the building went over the $1 million Rebirth got from SBC because the building was in bad shape. He said the roof leaked, flooding the basement.

“My first recommendation was to tear down the building,” Williams said.

New construction would have cost less, he said.

The project came to a halt, according to Williams, when he wasn’t paid $31,000 for his final invoice.

“Mr. Rush or his shadow organizations should pay their bills, rather than trying to cast aspersions against others,” Williams said.

Because the technology center plan didn’t come to fruition, Rebirth ended up getting only $32,630 of the federal money.

The building remained vacant and boarded up until 2009, when Rebirth sold it to Beloved Community Family Wellness Center, a health-oriented mission of a South Side church founded by Rush, who is a Christian minister and serves as the church’s pastor.

To close the $150,000 sale, Rebirth gave the wellness center a $94,000 no-interest loan but then didn’t cash any loan-repayment checks, records show.

But this was no sweetheart deal, according to Rush.

“That’s your terminology,” the congressman said. “It’s a sweetheart deal for those who are sick and who have no health care, access to health care, in the poorest community in the city of Chicago.”

By March 2006, Rebirth had spent $411,333 on unspecified tech center program expenses, according to financial disclosure reports required of tax-exempt charities.

In 2010, Rebirth folded when the Internal Revenue Service revoked its tax-exempt status after the organization failed to file disclosure reports for three years.

The last report Rebirth filed, for the period ending March 2006, showed $735,000 in assets and listed among the organization’s achievements this: “Technology Center: built a center to help Englewood and West Englewood residents develop technology skills to bridge the technological and economic divide.”

An IRS spokesman said federal law bars the agency from commenting on a specific taxpayer’s situation.

Rush has previously said the House Ethics Committee ruled that, despite his involvement, it wasn’t a conflict of interest for him for Rebirth to accept the $1 million from SBC because he didn’t personally benefit. Under House rules, the committee is barred from disclosing the advice it gives individual members of Congress.

After making the $1 million grant, the charitable foundation, by now operating under AT&T, gave Rebirth another $50,000 in 2006 for a “Technology Enhanced Employment Program,” according to the charity’s disclosure reports. And from 2006 through 2008, the AT&T foundation gave $450,000 for youth, social service and health care programs operated by nonprofits affiliated with Beloved Community Christian Church, the church Rush founded and serves as pastor.

Rush said he didn’t solicit the grants. “Those are competitive grants, as far as I know,” he said.

Rush has served since 1995 on the House Energy and Commerce Committee, which oversees telecommunications and energy. For years, he has been on its telecommunications subcommittee, with a key role in telecom legislation.

In 2001, when Rebirth got the tech center grant, SBC wanted Congress to change a law that it said was hindering its efforts to become an Internet provider.

Rush supported SBC’s position, though only after co-authoring an amendment to try to ensure high-speed Internet would be provided to low-income communities. The bill passed the House but failed in the Senate.

In 2006, Rush co-sponsored legislation sought by the telecom industry, which was trying to compete with cable by offering video services. The industry wanted to take away municipalities’ authority to grant cable franchises, instead leaving that to the Federal Communications Commission. The measure passed the House but died in the Senate.

Rush later aligned with telecom companies in opposing “Net Neutrality” regulation of Internet providers, sought by consumer advocates and many liberal Democrats.

From 2008 through 2011, AT&T spent $303,000 to host receptions in Rush’s honor, according to lobbyist disclosure reports that show the company paid for hotels, entertainment and other expenses for the gospel-themed galas. Most of them were timed to coincide with the Congressional Black Caucus Annual Legislative Conference in Washington, D.C. Rush said as many as 2,000 guests attended the receptions.

Freelance reporters Sandy Bergo and Chuck Neubauer wrote this story for the Better Government Association. Neubauer is a former longtime Chicago Sun-Times reporter.

COMING SUNDAY: Rent, spending questions on campaign fund