Juan Rangel, a political activist in Chicago, created the city’s largest charter chain, called UNO. Rangel was co-chairman of Rahm Emanuel’s mayoral campaign in 2011, when he first ran for mayor. UNO was an amazing cash cow. It collected $280 million over five years from the state. Governor Pat Quinn and House Speaker Mike Madigan took care of UNO, giving it a grant of $98 million to expand, a staggering amount for a single charter chain. Meanwhile, UNO fired its for-profit management firm and took charge of its operations, claiming 10% of all revenues for itself. None of UNO’s activities were monitored by anyone. Conflict of interest rules covered public schools, but not UNO.
Here is the ultimate nonpartisan article summing up the rise and fall of UNO and Juan Rangel. Here is my short summary of that brilliant article.
Once UNO won $98 million from the state, many friends and relatives got a piece of the action:
As the Sun-Times would reveal in February 2013, a long line of contractors, plumbers, electricians, security firms, and consultants tied to many of the VIPs on UNO’s organizational chart got a piece of the action. Rangel spelled out in tax documents and in later bond disclosures that the construction firm d’Escoto Inc.—owned by former UNO board member Federico d’Escoto, the brother of Miguel d’Escoto—was the owner’s representative on three projects funded by the grant. Another d’Escoto brother, Rodrigo, was paid $10 million for glass subcontracts for UNO’s two Soccer Academies and a third school in the Northwest Side neighborhood of Halewood.
The vendor lists were peppered with other familiar names: a $101,000 plumbing contract awarded to the sister of Victor Reyes, UNO’s lobbyist, who helped secure the state grant; a $1.7 million electrical contract given to a firm co-owned by one of Ed Burke’s precinct captains; tens of thousands in security contracts to Citywide Security, a firm that had given money to Danny Solis, and to Aguila Security, managed by the brother of Rep. Edward Acevedo, who voted for the $98 million for UNO.
As the scandals broke into public view, thanks to the enterprising reporting of the Chicago Sun-Times, Rangel resigned in December 2013.
Fred Klonsky writes about the consequences for Rangel. The SEC fined Rangel $10,000 while he admitted no wrong-doing. He is allowed to pay it off at $2,500 per quarter.
Klonsky writes in incredulity:
When he resigned from UNO he received a severance package of nearly a quarter million bucks.
$2500 a quarter?
That probably equals his lunch tab.
When Rangel ran UNO it was reported by the Sun-Times as having spent more than $60,000 for restaurants on his American Express “business platinum” card including thousand dollar tabs at Gene & Georgetti, the Chicago steak house.