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Out as would-be UNO reformer, exec with ties to Ald. Ed Burke still an insider

MartCabrerJr. (right) chairman United Neighborhood Organizatiboard with UNO CEO Juan Rangel.  |  John H. White~Sun-Times files

Martin Cabrera Jr. (right), chairman of the United Neighborhood Organization board, with UNO CEO Juan Rangel. | John H. White~Sun-Times files

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Updated: October 24, 2013 6:02AM



Martin Cabrera Jr. is out, but he’s still in.

The investment banker who was brought in to oversee reforms at Chicago’s scandal-scarred United Neighborhood Organization, the state’s largest charter-school operator, didn’t last four months before stepping down recently as UNO’s board chairman, citing unspecified differences over the group’s “philosophy and mission.”

But Cabrera retains close ties to politicians including Mayor Rahm Emanuel and powerful Ald. Edward M. Burke (14th) — both big supporters of UNO and its embattled chief executive, Juan Rangel.

Cabrera has built and maintained especially strong ties to Burke as Cabrera Capital Markets, the Chicago financial services firm Cabrera founded, has enjoyed multimillion-dollar growth, getting a cut of deals involving billions of dollars as a bond underwriter for city and state agencies and major governments across Illinois and nationwide.

Now with offices in Chicago and eight other cities, the firm’s modest beginnings saw Cabrera chip in just $1,000 from his personal savings and $25,000 worth of “furniture and fixtures” to get it off the ground in 2001, according to documents Cabrera filed with the city of Chicago to win favored status as a minority-owned and operated business.

Cabrera started the business with help from a Burke connection. Rose Gonzales — who worked from 1984 to 1987 for the City Council Finance Committee that Burke chairs — initially invested $137,000 in Cabrera Capital Markets.

Rose Gonzales — whose husband Alphonse Gonzales was disbarred in 1986 after being convicted in Operation Greylord of soliciting a $22,000 payment to fix an armed-robbery case — was Cabrera Capital Markets’ biggest investor. She continues to own a large stake but was never involved in running the business, records show. Cabrera, who had a 60 percent ownership stake from the start, is in charge.

Gonzales’ son Eric Gonzales had been partners with Burke in a $4.6 million townhouse project that also included building Burke’s 4,400-square-foot home.

Burke was the registered agent when Cabrera and Eric Gonzales became partners in 2005 in the now-defunct Valor Realty Advisors. And Burke’s law firm, Klafter & Burke, was general counsel for the company.

Other partners in Valor included Janis Cellini, a former state official who is the sister of William Cellini, a Springfield businessman who went to prison in the scandal that also sent former Gov. Rod Blagojevich to prison. Two current executives with Cabrera Capital Markets previously worked for BillCellini and were involved in Valor, which went out of business in 2007.

John Buckley, whose parents were longtime Burke aides and political supporters, is another Cabrera Capital Markets executive.

Neither Cabrera nor Burke would agree to an interview for this story.

In a written statement, Cabrera says he has known Burke and his wife, Illinois Supreme Court Justice Anne Burke, for more than a decade and calls them “friends.”

“More than that, Ed Burke is a friend to countless women-owned and minority-owned businesses,” Cabrera says.

But he also says “Cabrera Capital has grown into one of the largest Hispanic-owned financial services firms in the country because of its professionalism and integrity and what our professionals know, not who they know.”

Cabrera, 42, grew up in Little Village. “We were poor,” Cabrera said at a White House forum in 2011. “I thought a bond was something between a man and a woman.”

He has said his interest in finance took root in a mock stock market game he took part in during his senior year at Bogan High School on the Southwest Side.

Cabrera’s company has secured coveted deals as an underwriter on bond sales for government bodies including the city of Chicago, Cook County, the state of Illinois, the Chicago Board of Education, the Chicago Housing Authority, the Chicago Transit Authority, the Chicago Park District, the University of Illinois, the Illinois Tollway, the Metropolitan Water Reclamation District of Greater Chicago and McPier, the city-state agency that oversees McCormick Place and Navy Pier, records show.

Between 2003 and 2012, the Teachers’ Retirement System of Illinois, the pension fund for suburban and downstate teachers, paid Cabrera’s firm nearly $2 million in broker commissions.

But Cabrera also has faced tough times. The IRS filed liens against him in 2007 for more than $205,000 in unpaid taxes for 2004 and 2005, records show. Shortly before Cabrera paid off his tax debt, Cabrera Capital Markets got a $3 million loan from La Salle Bank, a longtime Burke client.

Revenues for Cabrera Capital Markets grew from about $316,000 in 2002 to a high of $25.2 million in 2010 but then fell to less than $15.8 million in 2011, the last year for which that information is publicly available. Its full-time staff went from 70 employees in 2010 to 49 the following year. And the firm’s share of the government bond-underwriting market has shrunk in the past few years, according to data compiled by Thomson Reuters.

Still, Cabrera’s profile has risen in political circles. In 2010, then-Mayor Richard M. Daley chose him to lead the City Colleges of Chicago board. In early 2012, Emanuel shifted him from that post to chair the Chicago Plan Commission. Since February 2011, Cabrera also has been on the board of the Public Building Commission of Chicago.

In late May, Cabrera was brought in to help restore UNO’s tattered image. Gov. Pat Quinn cited Cabrera’s appointment as a key factor in his decision to restart $98 million in state school construction funding.

That was after Burke, a major political contributor to Quinn, urged the governor to lift its suspension of the grant, which was halted after the Chicago Sun-Times reported the group paid $8.5 million of the state money to companies owned by two brothers of a top UNO executive.

Cabrera said he was staking his reputation on making changes at UNO, which gets tens of millions of dollars a year from the Chicago Public Schools to run 16 charter schools. Cabrera has declined to detail why he left UNO.

Email: dmihalopoulos@suntimes.com

Twitter: @dmihalopoulos



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