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.

Griffin's divorce. Think of it as a stock split.

The Griffins

SORRY TO HEAR THE NEWS (No, really) that right-wing billionaire power couple, Ken and Ann Griffin are splitting up. Whatever happened to "'til death do us part"?

The Griffins have been the money-bags behind both Bruce Rauner's and Rahm Emanuel's political ascendency. They have also bankrolled much of Chicago's union-busting and corporate-style school reform policies.

For this to happen right in the middle of the Illinois gov's race must be unsettling, especially to Rauner's people. Griffin was in the headlines last month because of his record-breaking $2.5 million contribution to Bruce Rauner’s gubernatorial campaign.

But don't worry,  Rahm and Bruce. Think of it as a stock split. Remember, corporations are people too. Besides, there's a pre-nup. Just in case Ann goes the wrong way, politically speaking.

Billionaire Griffin's influence will be felt no matter who wins the election

Chicago Magazine

The Billionaire Boys Club is flexing its electoral political muscles again in Illinois. The Sun-Times reports that Citadel hedge-fund CEO Ken Griffin has kicked in a tidy $2.5 million to fellow billionaire Bruce Rauner's already bloated campaign fund. That includes $71,000 worth of in-kind contributions for the use of Griffin's private jet. It's reportedly the biggest single Illinois political donation ever — in the modern-day era — to a candidate for governor of Illinois. It's also the biggest ever from an individual other than the candidate himself  in the post-Watergate era when public disclosure records were first required, said one political scientist.

Griffin has also given more than $1 million to Karl Rove’s American Crossroads SuperPAC and has donated heavily to the Koch Brothers’ Americans for Prosperity. He's bigger than two-party politics and also gave heavily to both the Obama and Romney campaigns as well as to Chicago Mayor Rahm Emanuel's political war chest. Griffin and his wife, Anne Dias Griffin are both members of Rahm's kitchen cabinet as is Rauner himself.

Whether Rauner or Gov. Quinn prevails in November's election, Griffin's influence will be felt. The same is true for next year's mayor's race. And that doesn't bode well for teachers, unions, or the state's public school system. Griffin is one of the biggest corporate patrons of privately-run charter schools. He also helped underwrite Stand For Children's 2013 venture into Illinois and was heavily involved in their campaign to pass anti-teachers-union SB7 legislation.

They come and they go

Catalyst follows the comings and goings of the cogs in Chicago's corporate reform wheel. The latest to catch my eye is Oliver Sicat, who leaves CPS to become the CEO and president of Edvocate, the charter management organization overseeing USC Hybrid High School in Los Angeles.

Sicat

Sicat was the founder of University of Illinois at Chicago College Prep, a campus of the Noble Street Charters Schools.  USC Hybrid High, now in its first year, is a charter school authorized by the Los Angeles Unified School District and designed and built by the University of Southern California Rossier School.

He was hired by Rahm to run the charter school wing of the mayor's school-closing operation. You know how that goes -- close a neighborhood public school, claiming it's "underutilized" and then open 3 charter schools around the corner, run by private companies. It's an economic and political win-win for the mayor and the corporate guys. And Sicat was the guy brought in to make it work.

Rahm even invented a new position of chief portfolio officer specifically for his rising star bureaucrat.  So why is he leaving a position created just for him? Don't know. Rahm likes to keep the revolving door revolving. It keeps any one department from getting too much power. Plus he's had to make room in the bloated school-closing/charter bureaucracy for new blood, like ex-marine colonel and hostage negotiator, Tom Tyrell and for Ald. O'Connor's sister, Catherine Sugrue.

Much like the military-industrial complex, where operators slide easily from the government bureaucracy to corporate board rooms, so it is with the edreform-corporate complex.

******

One group that sticks around is the corporate patrons of charter schools themselves who also keep Rahm on a short leash.

From the Chicago Tribune:

Yet the mayor's kitchen cabinet of advisers includes political donors from the strata of high finance in which he himself made millions of dollars. Those advisers, many active in promoting charter schools, include Michael Sacks, the CEO of Grosvenor Capital Management, who also heads Emanuel's World Business Chicago economic development panel; Kenneth Griffin and his wife, Anne Dias Griffin, who each run hedge fund firms; and venture capitalist Bruce Rauner, a likely candidate for the Republican governor nomination. 

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.

Hedge-fund school reformer Griffin says 'ultra-wealthy' have too little influence

Griffin

You wouldn't think that Mitt Romney could saunter into Barack Obama's home town and raise millions in one night and walk away unscathed. But that's exactly what he did. Here's how.

Hedge fund billionaire Ken Griffin, Chicago's second richest man (behind Sam Zell) and a major player in Chicago's corporate-style school reform, raised thousands for both Barack Obama and John McCain in 2008. But this year he’s not hedging his bets: he’s going all or nothing on Romney. The founder of the $13 billion Citadel Investment Group and his hedge-fund manager wife Anne Dias Griffin co-sponsored a $3.3 million Chicago fund-raiser for Romney at Chicago's Pump Room on Thursday.

Ultra-conservative Griffin has given more than $1 million to Restore Our Future, the pro-Romney SuperPAC, since last December. The Griffins have given another $1 million to Karl Rove’s American Crossroads SuperPAC since last August and have donated to the Koch Brothers’ Americans for Prosperity.  He's also a big fan and patron of Rahm Emanuel (no surprise there) and the Griffins contributed $200,000 to Rahm's mayoral campaign. What he like most about Rahm is the mayor's commitment to privately run charter schools and his antipathy towards the teachers union.

Griffin told the Chicago Tribune earlier this year that he felt the “ultra-wealthy” like himself had “insufficient influence” in politics.

This hedge-fund "school reformer" is so rich, he donates to the Koch Bros.

Griffin is the one on the right

Greg Hinz at Crain's, "Follow the money: Citadel's Ken Griffin and the Illinois GOP," reports on the Chicago hedge-fund billionaire who secretly throws millions into Republican political campaigns.

Wait, did I say Republican? There are no Republicans in Chicago so Griffin does the next best thing. He writes six-figure checks made out to the Rahm Emanuel campaign fund.

Writes Hinz:

In a fascinating series of events that just now are coming to light, it appears that every single penny the Illinois Republican Party got in the first quarter from other political groups for non-federal elections came courtesy of Ken Griffin, CEO of Chicago hedge fund Citadel LLC, and his wife, Anne Griffin, one way or another.

As I have pointed out before on these pages, Ken and Anne Griffin are also powerhouse players in corporate-style school reform and will back any politician in either party, who opposes the teachers union or who supports an expansion of privately-run charter schools. 

The Griffins were largely responsible for bringing the Portland-based group, Stand For Children into Illinois to manage the campaign around SB7. 

In the 2012 election cycle, the couple gave over $500,000 to the Republican Governors Association, $300,000 to Rove's American Crossroads, and $150,000 to the Wisconsin Club for Growth. 

Charles Koch named them as part of a list of elite donors who have pledged $1 million to his and brother David's conservative fundraising machine. Yes, the Griffins are so rich, they even donate money to help out the Koch Bros. 

The Griffins -- hedge fund power couple

Ken Griffin and wife Anne, have become two of the most prominent and powerful names associated with Chicago's corporate-style school reform. As the founder and head of the Chicago-based hedge fund Citadel, Griffin is reported to be worth $2.3 billion, making him the fifth-richest Chicagoan and 159th-richest American, according to the 2010 Forbes 400.

He and his wife, Anne Dias Griffin, have been major players in the world of political money: Campaign finance records show that the Griffins have donated more than $3 million to candidates and political action committees—including $450,000 last fall to Republican Bill Brady in the tight 2010 Illinois governor’s race.

The Griffins, along with other Chicago billionaires like Penny Pritzker and Bruce Rauner, also helped underwrite the anti-union lobbying group Stand For Children, headed by Jonah Edelman.  In 2010, Ken gave $500,000 each to two different political action committees—on October 25th to American Crossroads, an organization, according to its website, “dedicated to renewing America’s commitment to individual liberty, limited government, [and] free enterprise” and on December 15th to Stand for Children Illinois.

He also contributed  $150,000 to Mayor Daley in 2006 and $200,000 to Rahm Emanuel's mayoral campaign.

Noted art aficionados, they own works by Monet, Degas, and Cezanne, and paid $80 million for a Jasper Johns painting reportedly worth $2.3 billion, Ken bundled money for both Obama and John McCain during the 2008 election. In the 2012 election cycle, the couple has given $500,000 to the Republican Governors Association, $300,000 to Rove's American Crossroads, and $150,000 to the Wisconsin Club for Growth. Bonus: Charles Koch named them as part of alist of elite donors who have pledged $1 million to his and his brother David's conservative fundraising machine.