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Chicago schools investigating politically tied milk contractor

Frank J. McMahon

Frank J. McMahon

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Updated: May 8, 2012 8:06AM

The Chicago Board of Education’s inspector general is investigating the school system’s largest milk-delivery company, McMahon Food Corp., which recently lost its certification as a woman-owned business, the Chicago Sun-Times has learned.

The company — owned by Frank J. McMahon and his five children — controls the $20-million-a-year contract to deliver milk to more than 600 public and charter schools in Chicago.

A Chicago Sun-Times/Better Government Association investigation last month found that the school system is paying more for milk than many suburban districts that are a fraction of Chicago’s size.

For years, the Little Village company’s certification as a “woman-owned business enterprise,” or WBE, has helped it win tens of millions of dollars in government dairy contracts.

But McMahon Food withdrew its request to remain certified as woman-owned business by the Cook County Office of Contract Compliance on Feb. 15 after the Sun-Times questioned the company’s lawyers about whether Frank McMahon or his daughter, Bridget McMahon Healy, runs the company.

“We have decided to voluntarily withdraw our application for Cook County WBE recertification at this time,” Healy said in a letter to the county, adding that the company plans to reapply in July.

McMahon Food’s certification as a woman-owned business expired in October, and the company had been in the process of being recertified until February, “at which time the burden of providing the necessary materials became too onerous for them,” said Owen Kilmer, a spokesman for Cook County Board President Toni Preckwinkle.

Lawyers for McMahon Food did not return messages Friday seeking comment.

The company’s loss of its certification as a woman-owned business has created problems not only for the schools but also for the Cook County Jail. McMahon delivers milk to the jail as a subcontractor to Aramark Correctional Services, which is required to subcontract at least 10 percent of its business to certified woman-owned companies. Now that McMahon is no longer a certified WBE, Aramark is no longer in compliance with its Cook County contract, according to a March 28 letter that the company received from LaVerne Hall, the county’s contract compliance director.

Aramark responded Thursday, telling county officials it will continue to use McMahon Food to supply milk to the jail “until a viable solution is put into place.”

In Chicago, McMahon Food’s role in school-milk delivery could be renewed for two more school years, but school officials say they’re exploring other options.

“We are actively pursuing other vendors to create a rigorous and competitive RFP process for this contract to ensure we capture the best price possible for taxpayers,” said Becky Carroll, a Chicago schools spokeswoman.

Last week, Mayor Rahm Emanuel announced that City Hall is seeking to ban two of Frank McMahon’s brothers and their wives and Windy City Electric Co., which is owned by McMahon’s sisters-in-law, from getting any city business. City Hall has accused Windy City of obtaining millions of dollars in city electrical business by representing itself as a woman-owned company while actually being run by men.

Windy City — which hasn’t been certified as woman-owned business since 2005 — has until April 23 to respond to the city’s allegations.

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