What happened to the feds' probe of Chicago Public Ed Fund? Where'd everybody go?

Rahm and Griffin.

Back in April, 2015, we heard that the feds were in town, supposedly looking into the Chicago Public Education Fund (CPEF) and its involvement in the Barbara Byrd-Bennett/SUPES no-bid contract scandal. Remember? Subpoenas were flying and the names of some of the biggest players in corporate school reform were being dropped to the press.  Among those names were CPEF's billionaire board members, Bruce Rauner, Penny Pritzker,  Susan Crown, Mellody Hobson (wife of George Lucas), and the state's richest man, Ken Griffin. 

While the Fund wasn't the target of the investigation, and no-bid contracts with kickbacks are usually no big deal in Rahmville, it was reported that its board had given SUPES a $380,000 contract to train area network chiefs and their deputies. But when things started getting hot, they quietly discontinued their funding. 

Ace Catalyst reporter Sarah Karp, now with the BGA, made the point then, that if the Fund had been more transparent about its de-funding of SUPES, "taxpayers might have saved the $12 million of the more than $20 million SUPES was paid before its contract was cancelled".  But transparency is a no-no around CPEF's fancy downtown headquarters (nice view of the lake).  

As Karp puts it:

No one outside The Fund’s staff and board of directors knows how it decides which programs to support, what the results have been and how or whether the results are communicated to CPS.

So since April, there's not been a word in the media about CPEF or the investigation. Where'd everyone go? 

Griffin just sold his condo for $16M.

Rauner, now the governor, was at one time the CPEF board president. He denied any culpability in the SUPES affair, telling the feds that it was his pal Rahm Emanuel and not him, who brought SUPES, Gary Solomon, and Byrd-Bennett into town. 

Pritzker's off playing Obama's Sec. of Commerce, leaving Rahm holding the bag on school closings. She was a member of the school board that approved them along with the SUPES deal. 

And hedge-funder Griffin? (among Rahm/Rauner's largest campaign contributors). He took a bit of a hit when wife Ann divorced him. But he's still in the game, bigger than ever.

His most recent deal... Crain's reports that Griffin just sold his Chicago condo at the Waldorf Astoria for a mere $16M, the same price he bought it for 17 months earlier. The sale was the second-highest home sale in the Chicago area during 2015, after an $18.75M purchase at the Park Tower by an associate of Lucas and Hobson.

I'm sure this is all on the up-and-up, but it turns out that Griffin originally bought the place from ("an entity connected with") himself and then sold it to ("an entity connected with") himself. 

Sounds like a win-win. It always is for these guys. 

Feds looking for big fish in mother-of-all Chicago schools scandal

Rolling Over: Rauner claims it was Rahm, not his foundation, that brought SUPES into town and gave them a $20.5 million no-bid contract.

I told you...Once the feds start turning over rocks, there's a lot of things crawling around down there.

OK, BBB is toast. She's grabbed the money and ran. Left without a trace. Spending more time with the fam? Maybe she joined some secret underground group. No one seems to know. But she was small potatoes anyway.

Rahm is also MIA. He's become quiet as a mouse. Yes, he bought the election, but what did he really win? The city's credit rating is plummeting once more, making it almost impossible for him to continue borrowing against a gigantic mountain of debt, doing more debt-swaps, or solving the city's pension crisis.

Seems like every time there's a crisis, he ducks out of town and lets his underlings dangle in the wind. But Rahm is definitely scarred by all of this.

Now the feds seem to have set sights on the big boys in the world of power philanthropy, the Chicago Public Education Fund (CPEF). They're naming names. Subpoenas are flying and if they need a part-time server, I happen to be available.

The result has been exactly the one the feds wanted. Apply a little pressure and even Napa Valley Wine Club members like Rahm and Rauner will roll over on one another. Now Gov. Rauner, the Fund's biggest player and its former board president, is telling media, it was Rahm, not us (CPEF) that brought Solomon and SUPES into town.

"My experience with the public education fund has been mostly good. Although I will say this, the fund didn't make many of its own decisions as much as it was a facilitator for what the mayor or the schools or the leadership wanted to do," the governor said. 

No-bid contracts with kickbacks are no big deal in this town. It's like everyone has just discovered pay-to-play (the motto engraved over the mayor's office door on the 5th floor of City Hall. What's really behind the feds' invasion of Rahmville? Nobody I ask seems to know for sure. Lots of guesses though.

Rahm & Holder.

Is this Eric Holder's last hurrah, or what? Is revenge really a meal best served cold? (Think winter in Chicago).  It couldn't be something from way back in Rahm's White House days, could it? Remember Rahm telling him to STFU on gun control? Could it have something to do with being stonewalled by Arne Duncan in Louisiana?

Wasn't Holder just in town this summer, helping to kickstart Rahm Emanuel's re-election campaign, hailing the “amazing” turnaround in school safety? Obviously, he was doing a lot more than that.

Or is this the Obama administration making a preemptive strike on a Republican governor who seems bent on pushing the school system into bankruptcy and rewriting the state constitution? Will Illinois break another record for corruption by sending its fifth governor to prison? Or will Holder be content with naming the names of the entire Chicago ruling class before he backs off?

If you haven't done so already, check out Carol Felsenthal's piece in Chicago Mag. She writes:

Remember all the talk during the April 7 mayoral runoff of the 1 percent vs. the 99 percent? It would be difficult to assemble a board that screams 1 percent louder than CPEF’s—from the schools its members attended to jobs held to marriages made.

Among CPEF’s board members:

Ken Griffin, CEO of Citadel, hedge fund genius, and widely reported to be “the richest man in Illinois.”

Penny Pritzker, billionaire heir to the Pritizker fortune, former member of the CPS board, now an emeritus member of the CPEF board, which she once headed as chair.

Susan Crown, principal of the family business Henry Crown and Company and chairman of the Susan Crown Exchange, “a social investment organization” with a focus on education.

Mellody Hobson, president, Ariel Investments and wife of billionaire George Lucas.

Helen Zell, philanthropist, executive director, Zell Family Foundation, and wife of real estate billionaire Sam Zell.

Jana R. Schreuder, Northern Trust Company COO—the first woman in that position—and a past Teach for American advisory board member.

There are educators on CPEF’s board. They include:

Tony Smith, Rauner’s just-appointed superintendent of Illinois schools, formerly head of the school district in Oakland, California, although never a classroom teacher and a long-time advocate of charter schools.

Timothy Knowles, Director of the University of Chicago’s Urban Labs, chairman of the Urban Education Institute. Knowles is also a former deputy superintendent of the Boston Public Schools and the “founding director of Teach for America in New York City.

Laura Bilicic, former classroom teacher, the co-founder and former head of a New York City private school for children with “significant learning challenges.”

Penny Bender Sebring, a former high school teacher and current senior Research Associate at the University of Chicago and co-director of the Consortium on Chicago School Research.

But there's still some big names missing from this Rogue's Gallery of power philanthropists and corporate-style school reformers. For some reason, none in the press will dare say his name. But I'll give you a hint. He's Gary Solomon's old partner. He just ran a losing campaign for Lt. Governor on Pat Quinn's ticket. He recently was run out of Bridgeport, CT. And his initials are PV.

More to come on him. I promise.

Remember when Crown and Edelman told us how they did it?

It was back in 2011 when Jonah Edelman and Stand For Children, backed by billionaires like Crown, Pritzker, Griffin, and Rauner, took IL politicians and union leaders for a ride.