The Chicago Public Schools’ internal watchdog is alleging the school system’s top lawyer violated its ethics code — and that schools CEO Forrest Claypool was involved in an “apparent whitewash attempt” of the violation, the Chicago Sun-Times has learned.
In a confidential report given to Chicago Board of Education members in June, Inspector General Nicholas Schuler wrote that CPS general counsel Ronald Marmer shouldn’t have supervised $182,000 in work that his former law firm did for CPS while the firm simultaneously was paying Marmer a seven-figure severance package.
Claypool, Mayor Rahm Emanuel’s handpicked schools chief, has staunchly defended Marmer’s actions since the Sun-Times reported last year that Marmer is getting the $1 million package from Jenner & Block LLP, the Chicago firm hired to help CPS sue the state to try to win more funding for city schools.
But Schuler says six lawyers — four at CPS and two from outside firms — privately advised school officials that Marmer was violating the ethics code by supervising Jenner & Block’s work.
Only after CPS went to a seventh lawyer, in June 2016, did Claypool secure a legal opinion defending Marmer’s conduct. That opinion came from J. Timothy Eaton, a lawyer who has contributed to Claypool’s political campaigns.
“The clear inference is that Claypool had to shop through six lawyers until he found a seventh one who would publicly clear Marmer,” Schuler wrote to the Board of Education in the confidential report, which the Sun-Times reviewed.
The inspector general also wrote that administrators and Eaton have obstructed his office’s investigation “into the apparent whitewashing of Marmer’s ethical violations.”
Under CPS’ ethics code, employees are barred from exercising any sort of “contract management authority” over a district contractor “with whom the employee has a business relationship.”
The code defines a business relationship as a transaction worth at least $2,500 in a calendar year to an official. And the code’s definition of contract management authority includes “supervision of contract performance.”
CPS emails obtained last year by the Sun-Times show Marmer closely supervised Jenner & Block’s work and gave direct reports to Claypool.
While the inspector general has not yet made a recommendation on what should happen to Marmer, violations could result in punishment as severe as suspension or firing.
In December, Schuler took the unusual step of appearing at a school board meeting to complain publicly that CPS officials had been blocking his office from speaking with lawyers who had given opinions on Marmer’s conduct.
He repeated that complaint in the June 23 report.
“The circumstantial evidence available to date strongly supports the conclusion that the OIG’s investigation is being obstructed to prevent the apparent whitewash attempt from being further investigated and to prevent the OIG from reporting what it has learned or could further learn,” Schuler wrote.
Sources say that after Schuler gave board members that report, CPS officials finally agreed to let investigators speak with the lawyers about their opinions.
On Thursday, Schuler said, “The investigation is now progressing. I can’t comment beyond that because the investigation is ongoing.”
CPS spokeswoman Emily Bittner would only say that, “The Board of Education continues to fully cooperate with the Office of the Inspector General in this investigation.”
Marmer is a longtime friend and political supporter of Claypool, a former Cook County commissioner.
Claypool picked Marmer as his top lawyer in 2015, after Claypool succeeded corrupt CPS CEO Barbara Byrd-Bennett, who eventually would go to prison for her role in a bribery scandal involving school consultants.
At the time, Jenner & Block was paying Marmer $200,000 a year in severance — a deal that continues through 2018.
Shortly after Marmer got hired at CPS, Jenner & Block began preparing the school-funding lawsuit against state government.
“Ronald Marmer violated the code of ethics by exercising ‘contract management authority’ over legal work performed by his former employer Jenner & Block because he clearly has an ongoing ‘business relationship’ as defined by the code,” Schuler wrote in his report.
When first asked about the matter 14 months ago, Claypool told the Sun-Times that Marmer did nothing wrong. At the time, Claypool said he and school board President Frank Clark chose to hire Jenner & Block — and Marmer had nothing to do with the decision.
But Schuler wrote to the board that Claypool was warned repeatedly that Marmer violated the code.
According to Schuler’s memo, CPS’ in-house ethics advisor, Andra Gomberg told a top CPS attorney that the board shouldn’t retain Jenner & Block because Marmer wouldn’t be able to supervise its work without breaking the ethics rule.
Gomberg and two other CPS lawyers later met as a committee and issued an opinion. The school system also got an opinion from a fourth in-house lawyer. All agreed Marmer was violating the ethics code, Schuler wrote.
After Claypool learned of those opinions, he sought the opinions of two outside attorneys: former board general counsel Pat Rocks and longtime CPS labor attorney James Franczek. They, too, agreed Marmer was in violation, Schuler noted.
Those opinions have never been publicly released. But CPS officials gave the favorable opinion from Eaton to the Sun-Times in October 2016 after the newspaper unearthed the emails that showed Marmer had closely supervised Jenner & Block.
In his June report, Schuler wrote that his office “is investigating what appears to be an attempt by Claypool, and possibly others, to paper over the opinions of the six attorneys with Eaton’s letter, which was released to the press in the wake of public questions about Marmer’s involvement in the contract work.”
Schuler called Eaton’s letter “incorrect and materially deficient,” adding that, “Significantly, Eaton is a former contributor to Claypool’s former campaigns for public office.”
State election records show Eaton contributed $5,000 to Claypool’s campaigns. Eaton, a partner at the Taft Stettinius & Hollister LLP firm, declined to comment, citing the ongoing investigation.
In June, Schuler also urged board members to “immediately terminate Eaton’s representation” because he had become a “self-interested material witness.”
The next month, the school board replaced Eaton’s firm with McDermott Will & Emory LLP, agreeing to pay attorneys at the new firm up to $250,000 at a rate of $500 an hour.
Claypool got his first job out of law school at Jenner & Block in 1982 but worked there only briefly before going into the public sector, according to state attorney-registration records. At the time, Marmer also worked there, and he since has contributed $24,000 to Claypool’s campaigns.
Marmer left Jenner & Block in 2013 and was briefly in private practice before joining CPS, where he makes $185,000 a year.
CPS originally agreed to pay Jenner & Block its usual rates if the lawsuit won increased funding from Springfield. Then the firm agreed to CPS’ standard outside counsel rate of $295 an hour. The school board approved paying Jenner & Block up to $250,000 for its work on the case. In all, the district paid Jenner & Block $182,000.
Eventually, the firm agreed to work for free.
CPS filed its suit against the state in February 2016. Last month, state lawmakers granted more funding to CPS and other districts, though the lawsuit still is pending.