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Emanuel: Boeing exec, former city watchdog to head infrastructure trust

Updated: July 13, 2012 6:11AM

Mayor Rahm Emanuel’s decision to appoint a former corruption-fighting inspector general to the board overseeing his $1.7 billion Infrastructure Trust is either a political statement or a signal the board will agree to do what the mayor would not: give the current inspector general carte blanche to investigate.

Legislation rammed through the City Council in April did not empower Inspector General Joe Ferguson to investigate the Trust, a five-member board chaired by retired Boeing executive James Bell that will allow private investors to pump $1.7 billion into “transformative” infrastructure projects the city could not afford to build on its own.

The board will decide what projects to fund and what user fees to impose to guarantee five financing giants a sufficient return on their investment.

In a letter to aldermen in April, Ferguson complained that the Trust would operate under “significantly less scrutiny and transparency” than a city department outside city personnel rules, the ethics ordinance and the Shakman decree banning political hiring and firing.

Emanuel’s decision to appoint Ferguson’s predecessor David Hoffman to the five-member board is an obvious attempt to thwart criticism from Ferguson, but it may be more than that.

“I’m going on this board to do my best to ensure that the ethics and transparency and integrity pieces are done right. I don’t have any interest in being part of a process that’s different than that,” Hoffman said Monday.

“I was disappointed that it wasn’t part of the ordinance. But, none of that prevents the board from taking the position that the IG should have oversight. I’m optimistic that issue is going to be resolved positively. My prediction is, we will be in agreement that the IG has oversight.”

Bell added, “We’re gonna be transparent. If they want to come in and review something, I certainly wouldn’t envision that to be an issue.”

Hoffman was a constant thorn in former Mayor Richard M. Daley’s side. He once accused Daley of leaving $1 billion on the table when the former mayor privatized Chicago parking meters.

He called the Infrastructure Trust an “opportunity to apply lessons learned” from the parking meter fiasco, including “full public deliberation” of every project and potential user fee.

Like pretty much everything Emanuel touches, the board is strategically assembled to send a public message and address political concerns.

Bell and Diana Ferguson provide business expertise. Ferguson is a former chief financial officer at the Chicago Public Schools, Folgers Coffee and Sara Lee Foodservice.

The appointment of Chicago Federation of Labor President Jorge Ramirez is an apparent attempt to smooth feathers ruffled by the mayor’s decision to propose a painful solution to the city’s pension crisis without consulting organized labor.

Until the mayor went to Springfield to lower the pension boom, Ramirez and the mayor had forged a surprisingly productive relationship.

The CFL took a pass on the mayor’s race and rejected the mayor’s early demand for work-rule changes, triggering hundreds of layoffs. But, Ramirez cooperated with the mayor on McCormick Place reforms, on managed competition between city employees ad private contractors and on a plan to raise monthly health insurance premiums by $50 for city employees who fail to participate in a “wellness program” to manage chronic health problems.

The Union Labor Life Insurance Co. is one of the five major investors in the Trust.

The appointment of Ald. John Pope (10th) is designed to ease aldermanic concerns about shifting Council powers to an unelected board of mayoral appointees.

But, Pope is not exactly an enlightened choice. He is a go-along, get-along aldermen with strong ties to the now-defunct Hispanic Democratic Organization at the center of the city hiring scandal who once served as an assistant to Daley.

City Council oversight over the Trust is limited to transactions that include city assets, revenues or properties. If it’s a park, school or CTA project, aldermen would be powerless to stop it.

“He’s one of the more senior guys. He’s not in a chairmanship. It kind of went along with the seniority situation,” said Ald. Pat O’Connor (40th), the mayor’s City Council floor leader said of Pope.

“You’re talking about an investment vehicle. We have to make sure there’s an extraordinary amount of trust in the decision-making. The combination of public and private [officials] was essential.”

The Trust will launch with $225 million in energy efficiency projects for government buildings expected to generate $20 million in energy savings that will be used to repay investors.

Emanuel and his top aides have repeatedly refused to discuss what other projects the city wants to finance or what user fees would have to be imposed to make certain investors get their money back with interest.

Asked Monday what user fees he anticipates imposing, Bell said, “We haven’t even had one meeting yet. We haevn’t gotten into any discussion around that—if there will be any [user fees] at all.”

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