Investigative reporter David Sirota reports here on what happened during Paul Vallas’ superintendency of the Chicago public schools.

When he led the Chicago school system, mayoral candidate Paul Vallas took actions that resulted in more than $1.5 billion being transferred out of the city’s budget-strapped public schools and to some of the wealthiest individuals and banks on the planet, a new report shows.

Now, Vallas is in an election runoff against Cook County Commissioner Brandon Johnson to lead the city of Chicago, with big support from wealthy investors and other corporate interests — including from executives at law firms and banks that benefited from the controversial financing methods he used as CEO of Chicago Public Schools from 1995 to 2001.

With less than two weeks left before the April 4 election — which polls show is a tight race — Vallas has faced little scrutiny over his tenure as the Chicago Public Schools chief, even though he helped create a slow-moving financial disaster for America’s fourth-largest school system.

With Vallas at the helm, Chicago Public Schools issued $666 million worth of so-called “payday loan” bonds, according to a report from the Action Center on Race and the Economy (ACRE).

The interest payments on the bonds totaled $1.5 billion. A 2016 analysis from the Texas Comptroller’s office found that the type of bonds Vallas issued can be three times more expensive than traditional bonds — meaning that Chicago Public Schools could have faced up to $1 billion in additional interest payments above a normal rate.

That $1 billion is almost exactly the budget shortfall that former Chicago Mayor Rahm Emanuel, the current Ambassador to Japan, cited as justification to shutter 50 Chicago public schools a decade ago. Some of Emanuel’s largest donors, like Citadel hedge fund CEO Ken Griffin and executives at private equity firm Madison Dearborn Partners, are currently backing Vallas.

“[Vallas] got Chicago Public Schools into really bad deals that we’re still paying for a quarter century after he left,” said Saqib Bhatti, the co-director of ACRE. “And the fact that his strongest base of support comes from Wall Street should in and of itself be a big red flag.”

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