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Mayor Rahm Emanuel says he won’t cancel controversial janitorial contract

Richard SimPresident   CEO United Services Companies. | Courtesy Greater North Michigan Avenue Associatiwebsite

Richard Simon, President & CEO of United Services Companies. | Courtesy Greater North Michigan Avenue Association website

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Updated: February 19, 2013 3:09PM

Mayor Rahm Emanuel said Thursday he will not cancel an already controversial $99 million O’Hare Airport janitorial contract just because the company sold a 50 percent stake in the company to a private equity firm and waited a year to disclose the change to City Hall.

Five aldermen have asked Inspector General Joseph Ferguson to investigate the United Maintenance contract, citing their deep concern about an ownership change first disclosed by the Chicago Sun-Times.

Emanuel has already brushed aside allegations that United Maintenance owner Richard Simon was the longtime business partner of a man with ties to organized crime.

On Thursday, the mayor sloughed off the ownership that violated city purchasing rules that require company owners keep the city up to date.

“A lot of companies update their forms. And they were updated in this aspect,” the mayor said.

“The company does work with a number of Fortune 500s throughout the country, as well as here in the city. They’re a company that’s doing the work and it’s saving money at the airport as well as actually providing their employees with better benefits.”

The Sun-Times reported earlier this week that United Maintenance executives took a year to update their initial report to the city and reveal how Simon had sold a 50 percent stake in the South Loop firm to a private equity fund. By that time, United had landed the O’Hare deal.

Tom Balanoff, president of Service Employees International Union Local 1, called it a “serious deception” and renewed his call for Emanuel to cancel the contract that has cost hundreds of union janitors their jobs.

Five aldermen wrote a letter to Inspector General Joe Ferguson urging the IG to investigate the owners of Invision Capital I LP, the Loop financial firm that bought half of United from Simon in December 2011.

In filings with the city last month, Invision executives said no owner holds a stake of more than 7.5 percent, which is the threshold for requiring contractors to disclose the identities of investors.

Simon has refused to comment on the ownership change. Invision general partner Robert Castillo has not responded to repeated phone calls.

City Hall has acknowledged that the delay in reporting the ownership change could give them the right to cancel the O’Hare contract. But they have insisted that they’re not required to void the deal and have no plans to do so in United’s case.

On Thursday, the mayor was asked why not. Why make an exception for United Maintenance?

“I saw what the aldermen said….The procurement process ran for a little over nine months and they’ll look at it,” the mayor said.

“And I assume everybody will also look at the letter that was sent by all of the employees today who used to work there, have been re-hired and complimented the company for all of their additional benefits that they got.”

The aldermen signing the letter to Ferguson were: Roderick Sawyer (6th), Ricardo Munoz (22nd), Scott Waguespack (32nd), Nicholas Sposato (36th) and John Arena (45th).

State records show that SEIU was the largest donor to candidates in the last two City Council elections and donated more than $150,000 to the campaigns of the five aldermen. That includes nearly $74,000 to Munoz and more than $50,000 to Waguespack.

SEIU has maintained that 300 of its members lost good-paying jobs with benefits when United took over the janitorial contract at O’Hare last month.

In his letter to aldermen Wednesday, Simon countered that United has re-hired more than 100 janitors from the previous cleaning contractor. He said United pays all its employees at the airport “upwards of $36,000 a year” and provides better health and pension benefits than its predecessor at O’Hare.

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