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Emanuel backs CFO, non-committal on aide to indicted ex-comptroller

James T. Raussen City Chicago's managing deputy comptroller.

James T. Raussen, the City of Chicago's managing deputy comptroller.

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Updated: October 12, 2013 6:24AM

Mayor Rahm Emanuel on Tuesday gave a vote of confidence to his Chief Financial Officer Lois Scott, but said he would await a forensic audit before passing judgment on a deputy city comptroller with close ties to indicted former Comptroller Amer Ahmad.

The Chicago Sun-Times reported Sunday that an insurance company got more than $2.5 million in city contracts after hiring an Ohio lobbyist with ties to Ahmad’s top aide James Raussen.

A former Ohio state representative-turned state insurance administrator, Raussen left Ohio in July 2011 to join Ahmad’s Chicago team. He stayed on as the city’s managing deputy comptroller after Ahmad resigned, three weeks before being indicted in an alleged $500,000 kickback and money laundering scheme in Ohio.

On Tuesday, Emanuel was asked what he plans to do about Raussen and whether he is troubled by the dramatic increase in city business to USI Insurance Services after the company hired a lobbyist who was one of Raussen’s earliest political contributors in Ohio.

“I’ve asked an outside forensic operator to look into and make sure that what happened in Ohio stayed in Ohio and nothing like that happened in Chicago,” the mayor said.

“They’re going to be comprehensive and thorough and I await their report. . . . When I get the report, I can comment on anything if there’s anything related to anything.”

Emanuel was far more definitive about Scott, who has been under fire for recommending Ahmad after having business dealings with him in Ohio.

The financial services firm that Scott co-founded and sold before joining the Emanuel administration got bond business from the Ohio treasurer’s office during Ahmad’s tenure as its deputy. Ohio’s former treasurer, Ahmad’s former boss, got Chicago bond business after Scott recommended that Emanuel hire Ahmad.

“Lois Scott is a very good public servant and is doing a great job,” the mayor said.

“She has had a tremendous career in the private sector and gave that up to join the city and serve the public. And she continues to do that with my full confidence.”

Five months after Ahmad hired Raussen, USI Insurance Services hired Christopher Colwell to lobby the Department of Finance that includes the comptroller’s office for more city insurance brokerage business.

The firm had been the city’s broker for excess liability insurance coverage for years but had never before hired a City Hall lobbyist. Colwell has so far been paid nearly $50,000 by USI’s Midwest office.

As Raussen weighed whether Colwell’s client should be given a bigger piece of the city insurance pie, it’s unclear whether he disclosed to Ahmad or other city officials that Colwell had given him campaign money. City ethics rules do not require him to do so.

USI bills itself as the 10th largest insurance broker in the United States and 14th largest in the world. The company ended up winning two city contracts for insurance brokerage services — a $200,000 deal in May 2012 and a $1.5 million deal in October 2012 — that Ahmad signed.

The larger contract calls for USI to be the city’s insurance broker for O’Hare and Midway airports and special events including Taste of Chicago, in addition to excess liability coverage.

Ahmad amended the second contract — and authorized a two-year extension that expires in August, 2017 — two weeks before his July 23 resignation. That increased the value of the contract from $1.5 million to $2.5 million.

Emanuel has flatly denied that he should have known about Ahmad’s alleged wrongdoing as deputy treasurer of Ohio. He has defended the vetting process by two former federal prosecutors working pro bono for his transition team.

The mayor has promised an exhaustive investigation — with Inspector General Joe Ferguson and Corporation Counsel Stephen Patton overseeing the work of two outside attorneys — to make certain Chicago taxpayers and pension funds were not similarly victimized.


Twitter: @fspielman

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