Will Public Works Decisions Be Made in Private?
Transparency of Mayor Rahm Emanuel's Infrastructure Trust Is Uncertain
December 5, 2012 By John Chase, Chicago Tribune

They were appointed last summer to be the gatekeepers in Mayor Rahm Emanuel's program to build public works projects with billions of dollars in private investment, yet so far the board members of the Chicago Infrastructure Trust are still just hashing out their role in the mayor's ambitious plans.

The five-member panel, which is scheduled to meet this week on the fifth floor of the Chicago Cultural Center, is finalizing bylaws and finding its place in the City Hall hierarchy.

But as the board moves closer to being asked to sign off on plans to improve the city's infrastructure with private dollars, questions still remain about how transparent and open to the public those decisions will be. At the crux of the debate is Emanuel's insistence that the board be a nonprofit organization and not a city agency.

The board is applying for federal approval to become what's known as a 501(c)(3) charitable organization under Internal Revenue Service rules. The ramifications for the public have less to do with federal tax laws than with how the board figures in Emanuel's selection of private business partners hoping to see a healthy profit on an investment in Chicago government.

State development agencies that oversee huge taxpayer-financed projects, such as the Capital Development Board and the Illinois Sports Facilities Authority, must abide by state laws requiring that their meetings be open and the records of their transactions be public.

The city ordinance that created the infrastructure trust this year states the board must act "in accordance" with those same open meetings and records laws, but it is not bound by the transparency statutes.

In fact, the infrastructure trust board is less like a state agency and more like Emanuel's economic-development group, World Business Chicago. Emanuel has granted more power and influence to the 64-member business group, made up of some of the biggest names in the city's corporate community. The group's meetings, chaired by the mayor, are all private, and the members work behind the scenes to boost the city's global profile and attract corporations.

So far, the infrastructure trust board has met in public, and members say they will be more transparent than the business group.

"While we can't pass ordinances or do something that changes our legal structure, we can do what we can to be as open and transparent as possible, including passing bylaws and operating our affairs with maximum openness and transparency," said one of the members, David Hoffman, the city's former inspector general.

But the current inspector general is among the officials who question how transparent the board can be given the mayor's decision — endorsed by the City Council — to make the panel a charitable organization.

Inspector General Joseph Ferguson said that just because board members say he will have jurisdiction to review their decisions doesn't mean it's so, since there is nothing in the law that grants him that power.

"Bylaws don't trump laws, and we are bounded by law," Ferguson said. "We can't exceed what the law says even if they say come on in."

The executive director of the city's ethics board raised the transparency issue during one of the infrastructure trust's meetings. During a presentation, Steve Berlin declared that the trust is a city agency for purposes of the city's ethics laws.

"Everybody sitting at these tables falls within our jurisdiction," Berlin told the infrastructure trust board members during a meeting in late August.

Berlin's comments proved to be a sticky wicket on the transparency issue because legally the board can't be both a nonprofit and a city agency. It has to be one or the other.

Since that meeting, though, Berlin has been quiet about his contention. When pressed repeatedly for comment over the last several weeks, Berlin had a representative of the mayor's press office return the phone calls. He never provided answers to questions emailed to him.

Terry Pastika, executive director of the Citizen Advocacy Center, said taxpayers will not have any redress if they feel the board isn't keeping its word about being transparent.

"It's great those provisions are in there, but then you get to the question of enforcement," she said. "A citizen can't sue (this board) for a violation of the Open Meetings Act."

Ald. Scott Waguespack, 32nd, and several other aldermen attempted to codify into the ordinance the promises the infrastructure trust board has made about transparency and being subject to inspector general investigations, but those recommendations never went anywhere. The alderman said proper oversight is needed because any deal the infrastructure trust makes with a private entity would have to be ultimately backed by City Hall.

"The city taxpayers and the council will be on the hook for any deal that goes through, and that's why we were pushing for those things and there's no legislative control," Waguespack said. "That's the crux we were looking at. It is a danger that was created."

The trust has yet to engage in any actual deals, but companies seeking such contracts often want some level of confidentiality in their discussions.

James Bell, Boeing's former chief financial officer and the board's chairman, has said the board is committed to transparency but also has to be "practical" in how it would hammer out any deals with private firms.

"And is it effective to do that, when you have the public watching you do everything?" he said in a Tribune interview this year.

What sorts of deals the panel will look at also remains undetermined. It is clear Emanuel will be at the forefront of any privatization deals. He's already dictated that the board's first order of business will be to examine a $200 million project to make public buildings more energy-efficient.

A privatization of Midway Airport may be a possibility. Observers have suggested Chicago may take cues from projects around the country, including privatized toll roads, transit projects and even courthouses.
Illinois Coalition to Protect the Public Commons

"A privatization of Midway Airport may be a possibility.  Observers have suggested Chicago may take cues from projects around the country, including privatized toll roads, transit projects and even courthouses."

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