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The heat is on

Friday, Feb 8, 2013

* Latino power brokers have transformed the United Neighborhood Organization into a political force to be reckoned with. The group has obtained millions for its charter schools and even got around procurement law by avoiding blind bidding. As a result, insider deals have apparently proliferated

A $98 million state grant — approved by the Illinois Legislature in 2009 and believed to be the nation’s largest government investment in charter schools to date — funded the construction of Soccer Academy Elementary and other new schools built by UNO.

More than one-fifth of the taxpayer money spent on the Soccer Academy Elementary project went to four contractors owned by family members of UNO’s political allies and a top executive of the group, records show:

◆ A company owned by a brother of Miguel d’Escoto , UNO’s senior vice president of operations, was paid more than $600,000 as the “owner’s representative” for the project.

◆ Another d’Escoto brother landed a $4.4 million contract that included installing the school’s windows and distinctive metal exterior panels.

◆ State grant money that was used to guard the construction site went to a security firm run by two brothers of state Rep. Edward Acevedo, a Chicago Democrat who voted to approve the UNO grant.

◆ Two deals for plumbing work went to the sister of Victor Reyes , a lobbyist who helped UNO obtain the grant money to build the school. UNO also hired the janitorial service it operates, paying it more than $31,000 to clean up the Soccer Academy site before classes began. […]

◆ D’Escoto Inc., owned by Federico “Fred” d’Escoto, whose brother Miguel d’Escoto holds the second-ranking post with UNO and was the city of Chicago’s transportation commissioner under former Mayor Richard M. Daley. D’Escoto Inc. has been paid more than $1.5 million so far, mainly for overseeing construction management on all of UNO’s state-funded projects. Miguel d’Escoto’s son, Miguel T. d’Escoto, works for d’Escoto Inc.

UNO hired d’Escoto Inc. without seeking other bids, Rangel says, because the firm provided the sort of services that government agencies often contract for based on merit rather than price alone. “I trust that they are looking out for our interests,” he says. “I’ve known the d’Escotos for decades. Fred’s reputation is impeccable.”

◆ Reflection Window Co., owned by Rodrigo d’Escoto — another brother of Miguel d’Escoto. It stands to make nearly $10 million for work on all of the UNO schools built with the grant money. Reflection was paid about $6.7 million for work on the Soccer Academy Elementary and Galewood schools, and it has a contract for about $3.1 million for work on the high school that’s under construction.

◆ Aguila Security, which was run by Manuel Acevedo and Joe Acevedo — brothers of state lawmaker and longtime UNO ally Edward Acevedo — during the time the company provided “site security” for UNO on the Soccer Academy Elementary project.

◆ Toltec Plumbing, owned by Virginia Reyes, whose brother Victor Reyes was a top mayoral aide during the Daley administration and also headed the now-defunct Hispanic Democratic Organization. Victor Reyes was UNO’s lobbyist when it landed the 2009 grant, and his law firm is doing zoning work for UNO that will be paid for out of the state grant money, according to Rangel.

◆ Windy City Electric, which has ties to Ald. Edward Burke (14th) and was banned from working on City Hall contracts after city officials determined that brothers Anthony and John McMahon operated the company in their wives’ names to obtain millions of dollars from city contracts set aside for businesses owned and operated by women. Windy City was paid $1.67 million for work on the Soccer Academy Elementary’s construction.

Anthony McMahon is a top precinct captain for Burke, a longtime UNO backer whose Southwest Side ward is home to five of the charter network’s schools. Burke’s daughter-in-law has worked for UNO since 2009.

In 2010, Rangel endorsed Burke’s brother, state Rep. Daniel Burke (D-Chicago), when he narrowly won a Democratic primary fight against a Hispanic challenger.

◆ The law firm of Chico & Nunes, headed by attorney Gery Chico, who has done zoning work for UNO and been paid with money from the state grant.

◆ UNO JaMS, a not-for-profit “social enterprise” initiative of UNO that provides janitorial services at its charter schools.

* But there could be a problem

UNO’s grant agreement requires it to “immediately notify the department in writing of any actual or potential conflicts of interest, as well as any actions that create or which appear to create a conflict of interest,” spokeswoman Sandra M. Jones says. The state “has no record of receiving such notifications. We are currently reviewing the matter. We take our oversight of taxpayer-funded programs very seriously. If it is found that a grantee has used funds incorrectly, we will take steps to address it.”

* Mark Brown

He also reported that UNO contractors donated at least $51,000 to [Silvana Tabares] in her successful state representative campaign, and UNO employees even gathered most of the signatures on her nominating petitions.

What’s wrong with any of that?

Well, most fundamentally, I don’t think the purpose of creating charter schools was to establish new political fiefdoms with their own bases of patronage — whether of the classic or pinstripe variety.

I’m not knocking the UNO schools. They operate in difficult neighborhoods and have a reputation for delivering a better education than many of the other charters.

But we need to extract the charter operators from this type of political activity before it becomes the norm.

As it stands now, I don’t think any other charter operators are nearly as far along in their political entanglements as UNO.

I love Mark Brown, but there’s a whole bunch of super-rich Chicagoans involved with charter schools who are also pumping bigtime money into political campaigns.

* From today’s Sun-Times

The fact that Emanuel is a huge proponent of charter schools and that UNO CEO Juan Rangel is the mayor’s former campaign co-chairman and a mayoral appointee to the Emanuel-chaired Public Building Commission adds to the political embarrassment.

“I know what the United Neighborhood Organization does — both as a neighborhood group and as an education group. And I know they’re gonna have to hold themselves accountable because I believe in being held accountable to the public,” the mayor said. “They’re getting public resources. The people [who] are the proper people will look into it and be held accountable so dollars aren’t misspent.”

Pressed on whether UNO still enjoys his confidence, Emanuel said, “On their educational mission, yes, and that they do it in the right way.”

* Also, as I’ve told you before, House Speaker Michael Madigan was pushing hard for even more money for UNO last month. Greg Hinz had some details about how hard Madigan was working

But, in checking around, I hear that the guy who really pushed the proposed $35 million grant was House Speaker Michael Madigan, whose district has turned overwhelmingly Latino in recent years and who probably could use one of those new UNO schools in his district. Mr. Madigan — his spokesman did not return calls — was so hot for the grant that he actually tried to add it to some other bills, multiple reliable Springfield sources say.

Mr. Rangel confirms that the money “quite possibly” would have gone for work in Mr. Madigan’s district, where schools are “severely overcrowded.” And guess where that new soccer high school is? At the north end of Mr. Madigan’s legislative district, 5050 S. St. Louis Ave.

That cash was omitted from the supplemental approp bill which passed this week. There’s just too much heat on UNO right now.

- Posted by Rich Miller        


36 Comments
  1. - MrJM - Friday, Feb 8, 13 @ 11:17 am:

    Mark Brown: “I don’t think the purpose of creating charter schools was to establish new political fiefdoms with their own bases of patronage — whether of the classic or pinstripe variety.”

    Of course it was, Mark.

    Of course it was.

    – MrJM


  2. - 47th Ward - Friday, Feb 8, 13 @ 11:21 am:

    Hey, they’re just looking out for numero uno.

    Si usted no puede ayudar a sus amigos y familiares, que pueden serle de ayuda? Sus enemigos?


  3. - b - Friday, Feb 8, 13 @ 11:25 am:

    color me confused- charters keep saying schools are “overcrowded” while CPS keeps saying schools are not full and need to be closed. hmmmm. funny that.


  4. - Hank - Friday, Feb 8, 13 @ 11:28 am:

    Mark Brown: “I don’t think the purpose of creating charter schools was to establish new political fiefdoms with their own bases of patronage — whether of the classic or pinstripe variety.”

    I didn’t think Brown was this naive


  5. - Rich Miller - Friday, Feb 8, 13 @ 11:28 am:

    B, you may be confused because you don’t understand that Latino neighborhood schools are indeed crowded. Study a little.


  6. - D rose - Friday, Feb 8, 13 @ 11:29 am:

    So who is really in charge over there? It seems like d’Escoto is lining his pockets while rangel is the mouthpiece.


  7. - wordslinger - Friday, Feb 8, 13 @ 11:41 am:

    Whether it’s hedgies or community groups, the ability to let contracts is a big motivation for charter schools.

    And the kids, too, of course.


  8. - Sinister - Friday, Feb 8, 13 @ 11:44 am:

    UNO is the new HDO.


  9. - Capo - Friday, Feb 8, 13 @ 11:51 am:

    HDO, BGO. Is Dominic Longo now involved in UNO?


  10. - Rod - Friday, Feb 8, 13 @ 11:51 am:

    Sinister is correct. Now that UNO is on the hot seat Mayor Emanuel will have to create some space between himself and Rangel just in case the FBI is digging around.


  11. - Fair Share - Friday, Feb 8, 13 @ 11:59 am:

    If the public grants did not require public bidding, what’s the big surprise?


  12. - siriusly - Friday, Feb 8, 13 @ 12:03 pm:

    Nice one Rod. I like how you subtly imply that Mayor Emanuel is somehow corrupt and he has something to fear from the FBI. Classy.


  13. - OldSmoky2 - Friday, Feb 8, 13 @ 12:04 pm:

    This is not surprising, as it seems funnelling government contracts to private contractors is the primary purpose of the move toward charter schools. Study after study has shown that charter schools generally do not do a better job of educating children than traditional public schools and often do worse. The advantage of charter schools for politicians, though, is that the companies who run them can give out campaign contributions, while public schools cannot.


  14. - Pinker - Friday, Feb 8, 13 @ 12:14 pm:

    Agree with OldSmoky2.

    Just another reason to end this failed experiment.


  15. - El tercero - Friday, Feb 8, 13 @ 12:28 pm:

    Now Tabares is figuring what she has got herself into. What these thugs did to her opponent’s reputation, resulted in her win. No matter what Rangel tells her, she has to be a loyal soldier or “she gone!”

    Just keep lying down with dogs.


  16. - Anonimo - Friday, Feb 8, 13 @ 12:39 pm:

    One thing all this coverage is missing is that UNO schools are failing. Check out all of their school report cards - none of their schools have made AYP in the past six years and under federal regulations are up for a turnaround or restructuring.

    UNO succeeds at building a 21st century patronage army, but fails in educating our kids.


  17. - Anonimo - Friday, Feb 8, 13 @ 12:43 pm:

    I should clarify that the ’21st century patronage army’ I’m referring to is the one made up of employees from UNO contractors.

    On election day UNO shuts down its schools and all the janitors and security guards (employed by contractors) hit the streets for whatever inept politician UNO is pushing on the Latino community.


  18. - reformer - Friday, Feb 8, 13 @ 12:44 pm:

    Insider contract deals and nepotism? Daley did that for a quarter century. It seems the Latinos are emulating the Irish.


  19. - Formerly Known As... - Friday, Feb 8, 13 @ 1:11 pm:

    I recall someone expressing this very concern on this very blog in the comments section when the grant was awarded.

    The fact the head of UNO was close with Daley and Madigan at the time of the first grant in 2009, and also serving as Emanuel’s campaign co-chair at the time of a second grant in 2010 (not referenced in the article above), just seems a bit too much like the old Chicago Way.

    Plus, the timing seemed unusual.

    “We’re standing on the edge of a fiscal cliff and facing significant budget cuts. What should we do?”

    “Let’s give an outsized award of unprecedented scope to someone!”

    “Great idea. I have just the group in mind.”

    OK.


  20. - jeffing in Chicago - Friday, Feb 8, 13 @ 1:13 pm:

    to those writing about failed charter schools we give you this link.
    www.michigancapitolconfidential.com/18269

    The question is if they can do it right in Detroit can Chicago? Is there something about the “Where’s mine” motto that will keep this from working here.


  21. - Formerly Known As... - Friday, Feb 8, 13 @ 1:14 pm:

    Flashback:

    === The United Neighborhood Organization, the city’s largest Latino community group, is poised to become the biggest charter school manager in Illinois after scoring a $98 million state grant to build eight more schools.

    How UNO landed all that cash — believed to be the largest-ever taxpayer windfall in the U.S. for a community-run charter group to build schools — at a time of massive government budget deficits is a classic Chicago story of awakening immigrant clout and lobbying muscle. ===

    === Rangel also is not shy about touting the group’s friends in high places, including Mayor Richard Daley and Illinois House Speaker Michael Madigan (D-Chicago). ===


  22. - DuPage Dave - Friday, Feb 8, 13 @ 1:16 pm:

    Anyone who is surprised by this needs to go back to reality school for a refresher course. It’s just old school ethnic politics, nepotism and fake reformism. “We’re stealing all this money to help the children. Think about the children!”.


  23. - Formerly Known As... - Friday, Feb 8, 13 @ 1:24 pm:

    The best part?

    One year later, Quinn gave them another $25 million to build 1 school:

    === CHICAGO – November 22, 2010. Governor Pat Quinn’s administration today announced a $25 million Illinois Jobs Now! capital grant to build the United Neighborhood Organization’s (UNO) newest charter school, the Gage Park Campus in Chicago. ===


  24. - BMAN - Friday, Feb 8, 13 @ 1:34 pm:

    Isn’t refreshing to see that Illinois offers equal opportunity for sleez and coruption.


  25. - Formerly Known As... - Friday, Feb 8, 13 @ 2:10 pm:

    Speaking of questionable deals: appears Chicago has a small problem with their red light camera contract as well.

    The more things change, the more they stay the same.


  26. - Demoralized - Friday, Feb 8, 13 @ 2:23 pm:

    ==If the public grants did not require public bidding . . .”==

    Not everything requires a bid, nor should it. Grants are either specifically approriated or applied for.

    Furthermore, the lack of bidding has no bearing on anything. There are still agreeements that require very specific things of grantees, as evidenced by the issue being raised here. They failed to adhere to one of the requirements.


  27. - WizzardOfOzzie - Friday, Feb 8, 13 @ 3:01 pm:

    Demoralized-

    “Furthermore, the lack of bidding has no bearing on anything.”

    You serious? Do you think these contracts would have been awarded if competitively bid? How do someone can’t do it for less?


  28. - WazUp - Friday, Feb 8, 13 @ 3:18 pm:

    The usual suspects soaking up state ad federal grants. Thanks Chicago, the mob lives on!


  29. - Get Real - Friday, Feb 8, 13 @ 3:29 pm:

    This is a continuation of Dan Mihalopoulos working with his friends at SEIU and other unions to discredit charter schools and UNO. Pretty simple.


  30. - capncrunch - Friday, Feb 8, 13 @ 3:47 pm:

    “This is Illinois, after all.”


  31. - OldSmoky2 - Friday, Feb 8, 13 @ 3:54 pm:

    “This is a continuation of Dan Mihalopoulos working with his friends at SEIU and other unions to discredit charter schools and UNO. Pretty simple.”

    Wow… SEIU must be full of geniuses to get all those UNO insiders to go along with that plot.


  32. - Kwark - Friday, Feb 8, 13 @ 3:56 pm:

    This is just the tip of the iceburg. UNO has issued over $50 m in municipal bonds via the IL Finance Authority. There is a whole trail of pinstripe patronage to go with that, too. So UNO can leverage its charter revenues, borrow even more, and have all those cash flows leak out to insiders as well. Nicely played.


  33. - Arthur Andersen - Friday, Feb 8, 13 @ 4:07 pm:

    -If the public grants did not require public bidding-
    Isn’t the issue here that the UNO grants didn’t require (or they ignored) the common requirement in publicly funded grants that expenditures above a certain $$ amount be competitively bid?
    Leaving the language out-not good. Ignoring it-bad. Rigging bids-Hello, FBI?


  34. - walkinfool - Friday, Feb 8, 13 @ 4:11 pm:

    Smelly from day one. Only Com Ed, and insurance industry lobbyists, tried to steamroll more legislators.


  35. - wordslinger - Friday, Feb 8, 13 @ 4:12 pm:

    –This is a continuation of Dan Mihalopoulos working with his friends at SEIU and other unions to discredit charter schools and UNO. Pretty simple.–

    All by himself? What a powerhouse.

    The book on charter schools, from a measurable standpoint, is, at best, mixed. Some good, some bad, some great, some awful. Kind of like the rest of the educational system.

    But for doling out contract to cronies, the record is pretty clear.

    Why do you think the hedgies and the hustlers want in? K-12 is an endless river of public money, and you can bust the unions, to boot.

    You want to be a philanthropist? Do it on your own dime. Cowboy up.

    But when you start kicking in to Emanuel’s campaign funds and bankrolling his anti-union spots, forgive me, my spider sense starts tingling.

    I had the pleasure last year of tipping some beers with some of the CTU strikers. Erase your stereotypes. We’re not talking about the old Pershing Road adminstrator hacks.

    These were citizens, so many young, so many from all colors and situations of the rainbow, who are the boots on the ground in the real world.

    Splendid behavior. They can do other things, and they will, unless we stop driving them away from the good work they’re doing now.

    You want better schools? Get real. You won’t get them by handing them over to Hothead Bruce and the hacks.


  36. - Arthur Andersen - Friday, Feb 8, 13 @ 4:16 pm:

    Oh, and trying to argue that any of these contracts were worthy of “sole source” procurement to avoid competitive bids is, as they say, mierda.


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