The Chicago Sun-Times reported the results of its battle to gain access to the financial records of the UNO charter chain. UNO fought to keep its records secret, claiming they were a “private” organization. What the newspaper discovered when it won was a spending spree on the taxpayers’ dime–er, make that hundreds of millions.
The CEO of UNO, Juan Rangel, was politically powerful: he served as co-chair of Rahm Emanuel’s first mayoral campaign. Rangel got a grant of $98 million from the state to build more charter schools. He was compelled to resign when news broke that millions in contracts from the state grant were awarded to allies of Rangel.
But the new revelations show a pattern of profligate spending by the organization. It also shows how charters used taxpayer money to buy political favors.
Dan Mihalapoulos writes:
“Even as they ran a network of charter schools for thousands of students in low-income neighborhoods across Chicago, United Neighborhood Organization leader Juan Rangel and other UNO officials were piling up big bills at fancy restaurants and for travel on the taxpayers’ dime, records obtained by the Chicago Sun-Times show.
“In the year before a contracting scandal led to Rangel’s forced resignation, the clout-heavy Hispanic community organization and charter-school operator spent more than $60,000 for restaurants on his American Express “business platinum” card, according to the records, which UNO fought for nearly three years to keep secret.
“The spending spree included $1,000-or-higher tabs at Gene & Georgetti, Carmichaels, Vivo Chicago, Rosebud Prime, the East Bank Club, Carnivale, a downtown hotel’s rooftop bar and Soldier Field’s concessions during a soccer game featuring Mexico’s men’s national team.
“And UNO spent more than $60,000 a year on travel in 2010 and 2011, the internal records show. Rangel alone flew out of town 31 times in four years.
“In 2010, Rangel traveled at the organization’s expense to Managua, Nicaragua, the records show. Rangel and two aides, Miguel d’Escoto and Francisco “Pancho” d’Escoto, met during that trip with the d’Escotos’ uncle, a former diplomat advising them on possible expansion.
“Rangel’s and UNO’s fortunes took a downturn after the Sun-Times reported in February 2013 that the organization paid millions of dollars from a $98 million state school-construction grant to companies owned by two brothers of Miguel d’Escoto, who was Rangel’s top deputy, and to other contractors with close ties to the group.
“As federal and state authorities began investigating, the newly obtained records show, UNO officials spent hundreds of thousands of dollars trying to contain the scandal, which cost the organization millions of dollars in state funding and resulted in a federal consent decree requiring outside oversight of the group’s contracting practices.
“UNO has paid more than $962,000 since the start of 2013 to the firm of Mary Patricia Burns, who became the group’s primary lawyer shortly after the scandal broke.
“Her law firm, Burke Burns & Pinelli Ltd., has been a major campaign contributor to Illinois House Speaker Michael Madigan. The state Democratic Party boss from the Southwest Side sponsored UNO’s state grant — which was the biggest government subsidy given to charter schools in the country. Burns didn’t return calls seeking comment.
“The organization also paid more than $307,000 to retired federal judge Wayne Andersen and others who aided him in an investigation of UNO’s contracting practices.
“The spending took place as UNO was operating a government-funded charter schools serving about 8,000 predominantly Hispanic students, largely from low-income families. About 96 percent of students at UNO’s 16 campuses qualify for free or reduced lunches, records show.
“Despite being almost entirely government-funded, UNO leaders fought to keep the spending records secret, arguing that they didn’t have to comply with the state’s Freedom of Information Act because UNO is a private organization. But they ultimately released the records in a recent legal settlement with the Sun-Times.
“Since UNO founded the charter-school chain in 1998, the Chicago Public Schools system has given the privately run schools hundreds of millions of dollars in taxpayer funding, in addition to the state funding the organization got for school construction. Until less than a year ago, the UNO Charter School Network — which is separately incorporated — passed along much of the CPS funding to UNO, which managed the schools.”

This is horific. Shame on them but I bet try are brazen enough to try and explain these expenses away as necessary for business. The tax payer is being robbed. This should be on every major news network.
LikeLike
“This should be on every major news network.”
And that’s the real scandal of our time. I doubt any network will cover this. The media are a bunch of bought and paid for lapdogs of the powerful.
LikeLiked by 1 person
Kathleen, these are not necessary business expenses. This is graft. Where is law enforcement?
LikeLike
They’ll rely on the difference between the “operators” of the schools- UNO as a entity – and “the schools”.
I think it’s a ridiculously legalistic distinction that no one in the public would ever make because it’s like saying “the school board” is not “the schools”- technically true, but what does it matter?
They say this stuff with a straight face in Ohio. It is *technically* illegal to have a for-profit charter school in Ohio but the OPERATOR may be for-profit and the operator may control 97% of funding but the charter school itself is a non-profit.
They rely on tax status and the various entities to an excessive and (frankly) ludicrous extent. It’s a defense only a bunch of lawyers and accountants would love.
LikeLike
Diane, I agree entirely. There should be jail time for such proliferation of fraud. The mantra of “it’s for the children” just doesn’t ring true. When you consider even organizations like Wounded Warrior have been caught for the pilfering of funds by the CEO’s it’s not looking good for so called non-profits.
LikeLike
This is just a head’s up for parents of public school children. They don’t have to convert public schools into charters in order to push charter school policy and practice.
This is an example of that:
“Fourteen years later, he’s the chief academic officer at Summit Public Schools, helping to craft the California-based charter network’s nationally recognized approach to using technology to personalize student learning. He’s also a central figure in Summit’s one-of-a-kind partnership with Facebook, through which educators and engineers are collaborating to develop new software for customizing education in K-12 schools.”
90% of the stuff DC and state-level ed reformers push comes directly from charter chains. There aren’t enough charter schools to justify a huge investment in ed tech, for example. This stuff is destined to be marketed in every public school in the country. The influence of “market based” ed reform extends way past charter chains. They are running policy for all public schools.
http://www.edweek.org/ew/articles/2016/03/28/tech-convert-helps-head-networks-personalized-learning.html?cmp=SOC-SHR-TW
LikeLike
If you look at some of the details of the new ESSA law, you will find it is a gravy train for corporations through “Pay for Success” and CBE, both of which are not evidence based, yet they are presented as legitimate, valid approaches. The way in which charters are supported in the ESSA law, despite charters’ considerable waste and mixed results, is a another sign corporations had their way with this legislation.
LikeLike
PAY FOR Success is even scary simply in its wording. Think of a nation which will only spend its money on those children and citizens who are SUCCESSFUL. (i.e. dominant-culture privileged class).
LikeLike
These two lines jumped out at me:
1), “Despite being almost entirely government-funded, UNO leaders fought to keep the spending records secret, arguing that they didn’t have to comply with the state’s Freedom of Information Act because UNO is a private organization.”
Sure, public when it came to gorging themselves with public monies, private when it came to accounting for them and being fiscally responsible.
2), “Since UNO founded the charter-school chain in 1998, the Chicago Public Schools system has given the privately run schools hundreds of millions of dollars in taxpayer funding, in addition to the state funding the organization got for school construction.”
As Chiara as mentioned more than once, the opportunity costs are enormous.
This was the Eva Moskowitz/$ucce$$ Academy of its time and place. A notable example of rheephorm success. I am sure that at the recent TFALoveFest#25 this prompted the thought leaders and enforcers of corporate education reform to thoroughly discuss the lessons to be learned about charters and privatization and transparency and equity and…
They didn’t?!?!?!
😱
LikeLike
Dianeravitc. net ({FOREVER }
Dear . Diane . I’m very updated to your blogs , your my favorite , my heroe , I would like be 24/7 reading yours priceless comments I can call you { Ms encyclopedia } ? I wish I could right better English , I wish not be tie hands , THOSES comments from people defending Charters school , why?
1- THE HIGEST FORM IGNORANCE IS WHEN THEY REJET SIMETHING THEY DON’T ABOUT IT .
2- NOTHING IN ALL THE WORLD IS MORE DANGEROUS THAN SINCERE IGNORANCE AND CONCIENTIOS
>>> STUPIDITY <<<<< MLK.
I CAN't TELL THE NATION THE SUFERING CAUSED BY AN CHARTER SCHOOL THEY WON'T BELIVE . EVERY SOCIAL INJUSTICE IS NOT ONLY CRUEL , BUT IS ECONOMIC WASTE .
Ms .Diane I can't hold any more . I have to tell the true meaning of CHARTER SCHOOLS .
THANKS DIANE . I WISH I COULD TELL YOU HOW MUCH I KNOW ABOUT IT .
Dianeravitc .net FOREVER .
LikeLike
Here’s what Chicago Mayor Rahm Emanuel earlier said of Rangel, when he stepped down amid these accusations:
http://articles.chicagotribune.com/2013-12-06/news/chi-embattled-uno-chief-juan-rangel-steps-down-20131206_1_uno-ceo-juan-rangel-uno-charter-school-network
As with his initial full-throated support of the police involved in alleged brutality, Rahm gets its wrong again:
—————————————–
RAHM EMANUEL:
““Juan Rangel helped change lives as he worked to open the door to opportunity for tens of thousands of students across Chicago by offering them access to a quality education,”
Emanuel’s statement reads in part.
“And while today marks a new chapter for UNO, I have no doubt that they will continue in their efforts to meet the highest academic standards in educating future generations of Chicago youth.”
———-
This is what you would expect from the charter-loving Chicago Tribune, who editorial board wrote the classic editorial, “Unchain the charters.”
http://articles.chicagotribune.com/2013-03-25/opinion/ct-edit-joyce222-0325-bd-20130325_1_andrew-broy-charter-schools-new-charters
————————-
CHICAGO TRIB EDITORIAL BOARD:
“Make no mistake: The best charter school operators in the country are watching Chicago. Unfortunately, some also are avoiding it.
” ‘I wish we spent as much effort recruiting high quality charter operators as we do new businesses,’ Broy of INCS tells us. ‘But charter operators say, ‘Why should I come to Chicago if Memphis gives me $3,000 more per pupil, I have lower labor costs and the political environment is better?’ We don’t exactly make the top of the beauty list here.’ ”
—————————–
That’s right. Charter operators are all about the kids. They ain’t comin’ to town to open chartters if they can’t get rich in the process.
Unfortunately, when you “unchain the charters,” you get crooks like the guys at UNO financially gorging on themselves on taxpayers’ money, misappropriating it so they can then live like rockstars.
Hmmm … I wonder how the Trib is covering this latest scandal.
Let me check …
NOT. A. PEEP.
You know if the same thing happened at the Chicago Teachers’ Union with Karen Lewis, it would be on the front page every ding-dong day.
LikeLike
Listen to this upstanding charter operator demonize privatization opponents — parents and teachers unions are “hate-mongers” — while sucking up to the wealthy privatizers that enabled all the financial chicanery describe above:
In the same sentence that he calls parents and teacher “hatemongers”, he asks in the next clause, “Will we (corporate ed. reformers) instead hide our heads in the sand from the name-calling … ?”
Uhmm… didn’t you just resort to name-calling (“hate-mongers) in the first part of that sentence?
Here’s a good article from the Huffington Post:
http://www.huffingtonpost.com/kenzo-shibata/juan-rangel-ctu_b_1847620.html
Watch this money-motivated sell-out’s entire speech:
LikeLike
In a editorial separate from the expose article, the Sun-Times editorial board takes off the gloves:
http://chicago.suntimes.com/opinion/when-uno-textbook-money-gets-blown-on-steak-and-travel/
———————————
“Editorials
03/28/2016,
02:48pm
– – – – – – –
“When UNO textbook money gets blown on steak and travel”
by
the Sun-Times Editorial Board
– – – – – – –
SUN-TIMES EDITORIAL BOARD:
“Here’s a word problem for you, kids:
“Juan spends $60,000 a year in restaurants. How much on average is Juan spending in restaurants each month?
“Did you get $5,000 a month? Correct!
“And how much is Juan spending in restaurants each week?
“Did you get $1,153.85? Correct again!
“And how much is Juan completely blowing your hard-working mom and dad’s tax dollars?
“A lot, kids, a lot.
“Three years ago, the Chicago Sun-Times revealed how Juan Rangel’s United Neighborhood Organization, which ran a charter school network, mishandled millions of dollars in public money when it handed big construction contracts to two brothers of a top UNO officer.
“Those Sun-Times stories, by Dan Mihalopoulos, led to Rangel’s forced departure from UNO and, just last year, to UNO’s exit from the charter school business.
“Now additional UNO records obtained by the Sun-Times, after a three-year freedom-of-information fight, reveal what probably should surprise no one: The same charter school operator that steered lucrative contracts to favored relatives also wasted public money in other ways, mostly by living the good life on the taxpayer’s dime.
“And a few folks with ties to Illinois House Speaker Mike Madigan, UNO’s sugar daddy in Springfield, got cut in, too. Maybe this is that “Chicago way” we keep hearing about. Madigan sponsored UNO’s original state grant.
“In 2012, the year before he resigned, Rangel and a handful of top assistants used his American Express business platinum card to spend more than $60,000 in restaurants, Mihalopoulos reported Sunday. Rangel and the others racked up tabs of $1,000 or more in restaurants such as Gene & Georgetti, Carmichaels and Rosebud Prime.
“Rangel and UNO also spent more than $60,000 a year on travel in 2010 and 2011, and Rangel alone flew out of town 31 times in four years.
“The questionable spending piled up in one-shot ways, as well. UNO spent nearly $150,000 for the grand opening of a new school in 2012. It spent $11,600 in 2011 for 42 buses to bring parents of UNO students to a rally for increased public funding of charter schools. Yes, UNO burned through money to lobby for money.
“And on three notable occasions when UNO wrote checks for outside help, there was one degree of separation from Madigan.
“In 2009, when seeking a state grant, UNO hired a lobbying firm, The Roosevelt Group, in which one principal was former Madigan aide Mike Noonan.
“In 2013, when the UNO scandal broke, the charter school operator hired lawyer Mary Patricia Burns of the firm Burke Burns & Pinelli Ltd., a major campaign contributor to Madigan. Since then, UNO has paid the firm more than $962,000.
“Since 2013, UNO has paid more than $72,000 to Mesirow Insurance Services Inc., which employs Madigan’s son Andrew.
“The fact that we can even tell you all this now, by the way, is a victory for transparency in government. It took legal action by the Sun-Times, resulting in a settlement, to get UNO to release these records. This is how it should always be — minus the three-year fight. The books of any entity that relies largely on public funds should be open and transparent.
“There is a cost to doing business. Everybody gets that. Not every suspect expense by UNO was necessarily inappropriate. But UNO took on a big job that allowed for no waste or extravagance — giving some 8,000 Chicago kids, mostly Hispanic and almost all lower income, a quality education so they could move up in the world.
“Every dollar UNO spent on steak and wine and travel was a dollar not spent on textbooks, computers and teachers.
“One last word problem, kids:
“How much steak did Juan really need?”
—————————–
This is what Juan was doing while he was giving that speech at the City Club of Chicago, lashing out parent and teachers who opposed corporate reform… calling them “the failed status quo who put adult interests ahead of children’s interests.”
The Sun-Times really nailed exactly who was not putting “children’s interests” first.
LikeLike
OK. Chicago, the ‘second city’. Can we now start remembering how the nation has viewed this city?
This is the city of Al Capone. Post-Italian mobsters, the city of Daley: Richard J Daley mayor 1955-76; his son Richard M Daley 1989-2011. A city w/a well-earned reputation of corruption. Nevertheless we elected a son of Chicago, Barack Obama, in 2008, who brought Rahm Emanuel (current mayor of Chicago) onboard as his Chief of Staff, & Chicago-buddy Arne Duncan as Sec’y of Ed.
Same city that birthed, out of U of Chicago, Milton Friedman (and Paul Wolfowitz) & the ‘Chicago Boys’ who helped Pinochet devise a system of privatized, voucherized ed to Chile 40+ yrs ago– which, tho increasing rural access to ed, resulted in gross exacerbation of rich/ poor divide– ultimately resulting, after 3 yrs of students rioting in the streets for free ed, to election of a president who promises a return to free public Ed.
My point is that Chicago is the last place we should look for leadership in public ed. Chicago is the place to look for a view of what is coming– underwrit by its particular neo-conservative scholarship & its corrupt govt– as the frontal assault.
LikeLike