July 30, 2014
Mayor Rahm Emanuel made the right call in pulling the plug on a potential deal to lease Midway Airport.
After one of two remaining potential bidders dropped out last week, Emanuel decided to drop the effort to privatize the airport, saying the process had to be competitive to ensure the best possible deal for Chicago.
On the merits alone, for a city still smarting from the parking meter privatization fiasco, Emanuel made a wise and prudent decision.
Emanuel promised to handle privatization differently than Mayor Daley did in 2008 when he rushed through the parking meter deal. And Emanuel delivered in the terms he set for any possible deal and the process he set up for evaluating those terms and possible bids. Emanuel’s team specifically said at the beginning of this effort that there had to be more than one bidder.
Were Emanuel’s motivations pure? Did political considerations come into play?
The possibilities are plentiful, including a potential rejection of any deal by a highly dubious City Council and the fact that Emanuel’s chief financial officer, who has been quarterbacking this process, is under scrutiny for recommending the city comptroller for his position. The former comptroller is under federal indictment for an alleged kickback scheme.
If these variables had anything at all to do with Emanuel’s decision, they undoubtedly fit into the footnote category. And, on that note, a word of defense for CFO Lois Scott, a well-regarded public finance expert who came from the private sector to work for Emanuel. The fact that Scott recommended former Comptroller Amer Ahmad, someone she knew in the small world of municipal finance, need not raise alarm bells. Scott’s private firm won business from Ahmad, who had a strong reputation, when he worked for the Ohio treasurer. That’s it. There is no indication she knew Ahmad, who has not been convicted, was under federal investigation when she recommended him.
But skeptics can’t be blamed for reflexively questioning Emanuel’s motives, even if they look off base on this one. Emanuel, the master tactician who never strays off message, has made a regular and often maddening practice of refusing to reveal anything that doesn’t fit into one of his famous talking points.
Take, for example, the speed cameras he’s installing around schools and parks. Does he want to keep kids safe? Of course. Does he also want to make a buck for the city? Ditto, though he’ll never say it. Just take a close look at the recently released list of 50 sites getting speed cameras this year. Some scream “cash cow.”
But with Midway, Emanuel deserves credit for refusing to give in to a fire sale mentality. Could Chicago use the cash, somewhere in the neighborhood of $2 billion, from a Midway lease to pay down debt, pension bills or invest in the city’s infrastructure? Of course. But the risks to the consumers and taxpayers were too great to proceed without ensuring a good deal for Chicago.
For that reason, Emanuel and Scott were right to pursue the Midway deal. The city needs cash and there are few places to turn. Right now, all profits generated at Midway stay at Midway.
Emanuel and his team also set up a rigorous and open process to consider its privatization.
And when that process pointed in the direction of No, Emanuel was right to call it off.