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David Axelrod: No role in firm’s deals

White House Chief Staff Rahm Emanuel center is seated between President Barack Obamleft senior adviser David Axelrod as U.S. delegatimeets

White House Chief of Staff Rahm Emanuel, center, is seated between President Barack Obama, left, and senior adviser David Axelrod as the U.S. delegation meets with Turkey's President Abdullah Gul and his delegation in Ankara, Turkey, Monday, April 6, 2009. (AP Photo/Charles Dharapak)

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Updated: July 19, 2012 6:04AM



D avid Axelrod — the top campaign adviser to President Barack Obama — sold his ownership stake in ASGK Public Strategies in 2009, when he became a senior White House adviser.

But Axelrod didn’t cut his ties to the Chicago public relations firm completely. He still has an office there. His name is on the door. His old partners are still paying him the five annual $200,000 payments they agreed to when they bought him out.

Now, two of the firm’s clients — Citibank and the Chicago Cubs — have a lot riding on decisions to be made by Mayor Rahm Emanuel, the Axelrod friend and former White House colleague who ran on a pledge to reform a City Hall he described as riddled with influence-peddling.

Axelrod says he had no role in landing those contracts and isn’t involved in the work ASGK is doing for Citibank, which wants to help finance Emanuel’s highly touted Chicago Infrastructure Trust, or for the Cubs, who want Emanuel’s help in financing a major renovation of Wrigley Field.

Axelrod says he didn’t even know Citibank was an ASGK client until a reporter told him.

“I knew they represent the Cubs — I’m a huge fan,” says Axelrod, who’s back in Chicago from Washington to guide the president’s re-election campaign, which is based here. “But I have not been involved in the [Wrigley] project and don’t know the details of it.”

Axelrod says the terms of his deal with ASGK “are fixed and unaffected by these deals” with Citibank and the Cubs.

Emanuel’s top spokeswoman says hiring ASGK won’t win Citibank and the Cubs any favors from City Hall.

“If you think hiring Axelrod’s old firm will get you special access or privileges, you are sorely mistaken,” says spokeswoman Sarah Hamilton. “No person or company has an inside track into City Hall.”

Still, the public is rightly skeptical when companies with insider connections are involved with government, especially when the stakes are high, says David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University in Carbondale.

Yepsen says the Cubs and any firm that wants a part of the potentially lucrative Infrastructure Trust should engage in “total transparency” about who’s helping their efforts.

“I don’t want to say they shouldn’t be doing business with the city, but they have to do their ‘moving and shaking’ in the open,” Yepsen says. “Rahm Emanuel, Axelrod’s old firm, these banks — they don’t need any inference of impropriety or cronyism. They have to show they have nothing to hide and that what they are doing is in the public’s interest.”

ASGK quietly has played a role in a number of major issues at City Hall, among them helping win City Council approval in 2008 for the Chicago Children’s Museum’s now-abandoned plan to move from Navy Pier to Grant Park.

The firm’s executives don’t register as lobbyists because they say they don’t ever directly lobby — contacting public officials on behalf of their clients. Rather, they say they help clients get their stories out in other ways — with “media relations, message development, advertising, social media and constituency relations.”

Another Axelrod-founded firm — AKPD Media and Messaging — recently produced ads critical of the Chicago Teachers Union, which is embroiled in a contract dispute with Emanuel. AKPD oversaw Emanuel’s ad blitz during his mayoral campaign, and the firm is a paid consultant to his political committee, state records show.

Like ASGK, AKPD continues to pay Axelrod for selling his stake in that firm. AKPD owed him $2 million, to be paid over four years, when he became a White House aide, Axelrod told federal ethics officials.

Both AKPD and ASKG are housed at the same River North address that’s also home to Axelrod Strategies, the firm he founded upon leaving the White House last year. “I rent space in my old offices, but I work full-time out of Obama headquarters these days,” Axelrod says.

ASGK’s managing partner, Eric Sedler, won’t talk about the work the firm is doing for the Cubs and Citibank.

Dennis Culloton, spokesman for the Cubs’ owners, won’t say what ASGK is doing for the team but says it was hired in the past year and answers to Michael Lufrano, the team’s general counsel and executive vice president of community affairs.

The team needs support from Emanuel and the City Council to advance its $300 million plan to rehab Wrigley. In April, Emanuel said negotiations for a Wrigley deal were in the final stages. Then, the mayor reacted angrily to reports last month that Joe Ricketts — patriarch of the family that owns the Cubs — was part of a conservative group considering a since-dropped plan for a $10 million attack ad campaign on Obama.

Emanuel has since declared that that won’t affect negotiations with the Cubs, but Hamilton says City Hall currently isn’t engaged in any Wrigley talks. “If and when they do resume, the mayor will make his decision based on what is best for taxpayers,” Hamilton says.

Citibank and a fund
called Citi Infrastructure Partners — which won’t talk about ASGK’s work — were two of the five financial institutions that Emanuel singled out at a March 1 news conference with former President Bill Clinton at which he announced the formation of the Chicago Infrastructure Trust. Citibank and Citi Infrastructure Partners told city officials they’re considering investing as much as $200 million apiece in the initiative, which is designed to use private dollars to pay for public works projects.

Asked how the firms came to be involved in the initiative, which hadn’t been approved by the City Council, Hamilton says Lois Scott, Emanuel’s chief City Hall financial officer, relied on her 30 years of experience in the private sector and “made calls with an open invitation . . . to express investment potential.”

A newly nominated, five-member board will screen applicants to finance Infrastructure Trust deals. With only seven aldermen dissenting, the Council quickly approved an ordinance creating the trust in April.

Ald. Will Burns (4th) — who voted for the trust — works for ASGK. Its website lists him as a managing partner. Burns says he doesn’t work on the Citibank account and had been unaware that Citibank is an ASGK client, though Citibank is listed as a client on the firm’s website. “I don’t do a lot of work for ASGK, to be very frank,” Burns says, adding that city ethics officials assured him that his vote for the Infrastructure Trust wasn’t a conflict of interest because “any number of financial institutions can participate in the trust.”



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