The International Business Times reports that pension funds from Chicago teachers have been invested with Mayor Rahm Emanuel’s friends and campaign donors.
According to city documents obtained by IBTimes, the firm affiliated with Illinois’ Republican Gov. Bruce Rauner — a longtime friend of Chicago’s Democratic mayor — as well as executives at private-equity giant Madison Dearborn have gained substantial investments from the Chicago Teachers’ Pension Fund (CTPF) since Emanuel took office. The documents also show the CTPF has an indirect equity stake in Grosvenor Capital Management. Executives at the latter two firms have donated nearly $1.8 million to Emanuel’s campaign and political organizations since 2011.
Diane Ravitch's blog 
This reveals more about the union than the mayor. ALL the political elites are a pack of crony crapitalists. But why does the union allow the pension money to be a part of the political spoils of power? Does the mayor control the pension fund? I doubt it.
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The union doesn’t control it either. And the pension board has members appointed by the mayor, am I wrong about that?
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2 of the 12 members are appointed by the Board of Education, 6 of the 12 are elected by active teachers, 3 of the 12 are elected by current beneficiaries, and the last is appointed by the fund’s administrator. Of the six board members elected by active teachers, four are the board’s officers and one is the chair of the investment committee.
http://www.ctpf.org/general_info/board.htm
Maybe the tension between the interests of active and retired teachers is serving as a wedge for Rahm’s guys to get their way. Maybe Rahm’s guys are holding a gun to everyone else’s head. Maybe Rahm happened to get donations from hedge funds that perform well and are an attractive option for a board looking to maximize return (nah, scratch that last one, that can’t be it).
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Tim,
From the article:
“The SEC’s so-called pay-to-play rule prohibits financial firms from earning fees from pension funds if their executives have made donations to officials who oversee those pension systems. In a previous statement to IBTimes, Madison Dearborn has asserted the rule does not apply to the company because it is managing city money through a fund of funds. Yet, the rule includes language explicitly covering firms that manage pension funds through third parties.”
In reading the whole article it seems that the old adage of “where there is smoke there is fire” might hold true. Especially considering the loophole (non-disclosure) in the law put in place benefitting the companies mentioned.
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Duane,
Unless I am missing something in how the board is organized, I fail to see how having the authority to appoint 17% of the board is “overseeing” the fund. Even if the two board members steered the investment committee (chaired by an active teacher rep) to Rahm funds, everyone else had to vote on it.
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Tim, it does make one wonder what the other 83 percent of the Board was thinking or how much pressure was exerted to get this measure passed. It just doesn’t smell “Kosher” to me, but, then again, we have a ton on conflicts of interest on the Buffalo School Board (including profiteers making money off of charter schools that they get to vote to create).
It’s up to the community to respond, and I’m sure those Chicagoans are not keeping quiet. I feel a fervor across the country – a push back against the policies of the so called ruling class. We are beyond “Tea Parties” we are more like “Viva la education”.
Ellen T Klock
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Tim,
Shouldn’t the burden also be on those running the hedge funds to know and abide by all the rules.
In echoing Ellen’s comments, something doesn’t seem right, but there is not enough information available to make any definitive statement and, not living in Chi-Town, I’m not inclined to pursue it further.
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This is very unethical and why so many people are fed up with politics in Chicago. Everything feels dirty in our political climate and it seems it is only getting worse. Too many people have such short term memories and we will only end up kicking the can of our problems down the road once again.
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Emanuel and Rauner seem to have the worst memories of all. To do these kinds of things when we’ve had two governors in IL convicted and imprisoned for pay-to-play schemes in the past 10 years (one from each party) is just asking for trouble. The “Fund Of Funds” reminds me of the shell games corporations often play these days to obscure their practices, increase profits and circumvent accountability, so I really hope the SEC is able to make a case against all involved.
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Chi-Town, if these are the things we know about, imagine what else is going on. Luckily, those of you from Illinois have experience dealing with shady characters.
Ellen T Klock
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If this isn’t illegal, it should be.
There are too many conflicts of interest going on around the country at all levels of government, sometimes even in school boards (see Carl Paladino and the Buffalo Board of Ed).
Ellen T Klock
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So much for “public service.” Cha-ching!
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Gollly Gee…ya think. let me see. They removed the teachers rights to due process. They fired them before they were vested in health benefits, and then, seeing that nobody is watching, they rob the pension funds… and the tv’s are busy reporting the weather, or the latest murder, or the cell news.
Next, they will chain teachers to the walls, when the class leaves, and feed them bread and water until the next day.
Can you spell lawless. Don Corleone is running the schools.
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That’s an insult to Vito. I’d be watching my back if I were you.
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“There is more money potential in [education] than anything else we’re looking at now. If we don’t get into it, somebody else will, maybe one of the Five Families, maybe all of them. And with the money they earn they’ll be able to buy more police and political power. Then they come after us. Right now we have the unions and we have the gambling and those are the best things to have. But [education] is a thing of the future. If we don’t get a piece of that action we risk everything we have. Not now, but ten years from now.”
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Hee hee.
I am laughing not only at the reference to the 5 families, but to the idea that we have the unions. Ohmi goodness. You need to talk to Lenny Isenberg about that. He is suing th euTLA and has read me chapter and verst on the simple thing that allowed due process to disappear.
Remember FLERP, I was one of the teachers who found herself under assault in the most lawless workplace environment one could imagine, in 1998, when that first attack on due process was put into practice in NYC.
I remember Dan Rather, whom I had met through one of my students who was the best friend of Andy Gulianni. Dan knew of my successful practice so when ended up in the rubber room, with NO charges, and no hearing, and allegations of incompetence and corporal punishment, the looked me in the eye an said: “How can this be? Where is the union?”
I have a long reply to you, but I hate it to run along the edge of this blog as a reply. I am going to post it as a comment, so it appears across the page.
but……
The unions? hahahahahahahahahahahaha!
I would prefer Vito to represent teachers… the families had HUGE repeat for teachers!!!
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Kind of hacking business endorsed by Chicago crook and his secret public resource hacker group.
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If you live in the Chicago metropolitan area, you may be interested in attending a discussion this Wednesday, 3/18 @ 7 PM @ The Book Cellar, 4736 N. Lincoln Ave., Chicago (773) 293-2665 bookcellarinc.com Tom Gradel & Dick Simpson (former Chicago alderman, UIC Political Science Professor) will discuss their new book, Corrupt Illinois: Patronage, Cronyism & Criminality.
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Ari Emanuel has a private equity firm, too.
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This can’t be good for Rahm at this point in his re-election campaign.
Whether there is any substance to this is largely beside the point because, as they say, “in politics, appearance is everything.”
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At the same time it is said that any press coverage is good!
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Hee hee. FLERP!
I am laughing not only at the reference to the 5 families, but to the idea that union have our backs. Ohmigoodness! You should talk to Lenny Isenberg about that. He is suing the UTLA and has read me chapter and verse on the simple thing that allowed due process to disappear.
By merely adding a gratuitous morals charge under California Education Code (44939.odt), a teacher can even be stripped of their Collective Bargaining rights to grievance and arbitration. This war against teachers started in 2006 when present chief LAUSD attorney David Holmquist was director of the LAUSD Office of Risk Management and Insurance Services. With 2006 Retiree Health Actuarial info.pdf, it became open season on older high-seniority and better paid teachers who either suffer from good teaching or honesty in the face of endemic LAUSD/UTLA corruption.
So, Dear Flerp, COLLECTIVE BARGAINING for our due process rights, ARE the only reasons we pay dues (since the salary and medical benefits DISAPPEAR WHEN THEY FIRE US… which THE motivation, my dear, FOR CITIES WHICH HAVE NO MONEY SET ASIDE FOR THE BENEFITS OF TEACHERS.
Lenny explained it to me. The word went out to the principals in LAUSD, “Get rid of those teachers BEFORE THEY VEST and bankrupt our budgets!!
And here is how it was accomplished:
http://citywatchla.com/8box-left/6666-lausd-and-utla-complicity-kills-collective-bargaining-and-civil-rights-for-la-s-teachers
Of course, it began with the news media playing that rant: “why should a teacher be assured a job for life? And a stressed and ignorant public that bought it! Then the media took off about those ‘bad teachers.And in NYC and LAUSD (the first and second largest districts in the nation) the conspiracy began. Everyone knew that the teachers in the rubber rooms were our finest experienced veterans. The unions KNEW!
This was not true of tenure… the only thing that tenure did, was ensure that DUE PROCESS attended those teachers who achieved successful practice Until tenure, any teacher is (and remember this Flerp) an ’employee at will!” This means they can fire your butt at will, no explanations necessary, and no access to the sixth amendment…unless you plan on suing in court…and owing up against the $$$ and attorneys at the Boards of ed.
But, my dear, instead of a ‘speedy’ resolution as per the COLLECTIVE BARGAINING AGREEMENT (in the contracts which sits on my desk) they did not investigate when a teacher filed a grievance at step one. They removed the teacher and 3 years later, when the students who could testify, were gone and the colleagues had forgotten, the principals (who were NOT SWORN UNDER PENALTY OF PERJURY) told their version of reality, and the hearing officer in that kangaroo court where the UFT and NYSUT attorneys failed to allow the teachers to present evidence or be heard, found them guilty. I saw Pi Lian Tu’s hearing and have her transcript. A travesty of injustice.
In LAUSD 10,000 faced allegations…all were fired.
http://www.perdaily.com/2015/01/were-you-terminated-or-forced-to-retire-from-lausd-based-on-fabricated-charges.html
Remember FLERP, I was one of the teachers who found herself under assault in the most lawless workplace environment one could imagine, in 1998, when that first attack on due process was put into practice in NYC. (you have watched this Grassroots movie about how NYC schools were made to fail by removing the veteran teachers> if not Please do.
Dan Rather, whom I had met through one of my students (who was Andy Gulianni’s best friend) knew of my successful practice, so when I ended up in the rubber room, with NO charges, and no hearing, and allegations of incompetence and corporal punishment. I contacted him. He looked me in the eye an said: “How can this be? Where is the union?” He assigned an ass’t producer to investigate, but it was 1998, and he concluded that it was a ‘local thing,’ not for 60 minutes… and then Iraq took his attention, and I was left, blind-sided, just as I had become a celebrated educator, with a practice vetted by Harvard as a cohort for the Pew research.
So, how could the union allow them to finally charge me with incompetence, if I had due process rights? Boy, I wish you had met the sleazy Manhattan UFT Rep IvanTiger, who told me to ‘sit down and listen, when the superintendent,( in her early attempt to rid the city of me) ‘ wrote a letter saying I had verbally abused a child and for this, I was FOUND GUILTY of corporal punishment” by her alone, but it was published to the school…despite my filed lawsuit.
Seriously? No charges put forth. No investigation. No hearing. The first time I hear about his ‘joke’ is at a meeting SIX MONTHS AFTER I AM SITTING INTHE DO, WONDERING WHY MY CLASSROOM HAS BEEN DISMANTLED, and what is going on.
.
The unions? hahahahahahahahahahahaha!
I would prefer Vito to represent teachers… the families had HUGE repspect for teachers!!!
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