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City watchdog given power to investigate Infrastructure Trust

Joe Ferguson

Joe Ferguson

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Updated: September 30, 2012 6:17AM

The five-member board overseeing Mayor Rahm Emanuel’s $1.7 billion Infrastructure Trust agreed Tuesday to do what the mayor would not: give the city’s inspector general carte blanche to investigate its members, employees, operations and actions.

Legislation rammed through the City Council in April did not empower Inspector General Joe Ferguson to investigate the Trust.

In a letter to aldermen in April, Ferguson openly 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 former Inspector General David Hoffman to the Infrastructure Trust board was an obvious attempt to thwart criticism from Ferguson, Hoffman’s successor.

On the day he accepted the appointment, Hoffman declared his intention to apply “lessons learned” from the parking meter fiasco: by empowering the IG to investigate the trust.

On Tuesday, he made good on that promise.

In its second meeting, the Trust adopted bylaws that state that all directors, officers and employees of the Trust “shall have a duty to cooperate” with the inspector general “in any investigation, audit or review undertaken” by the IG’s office.

The bylaws specifically empower the IG to investigate: the “performance of the directors and officers and employees of the Trust; any projects financed or supported by the Trust and any programs or operations” it undertakes “to detect and prevent misconduct, inefficiency and waste within the programs and operations of the Trust.”

“I’m very pleased with the language. The intent is clear. To me, this puts the issue to rest,” said Hoffman, who once accused former Mayor Richard M. Daley of leaving $1 billion on the table in the 75-year, $1.15 billion deal that privatized Chicago parking meters.

“We have been clear in our oral statements and we are now clear on the record that we are not going to do anything to stand in the way of the IG investigating everything with regard to the Trust. They are [free to] conduct investigations, audits or reviews of what we do and we shall cooperate, which is exactly what I believe was important.”

The city’s Board of Ethics has ruled that the Trust is a city agency and, therefore, that its members must follow the city’s newly-revised ethics ordinance, including its disclosure requirements, its ban on gifts and loans as well as its revolving-door provisions.

But Emily Miller of the Better Government Association questioned why reporters and members of the general public whose Freedom of Information requests are denied will not be free to appeal those decisions to the Illinois Attorney general’s office. Instead, the city will be the final arbiter.

“If the Trust is a city agency in some areas and not in others, I’m not quite sure how that’s gonna work out,” Miller told the board.

Hoffman agreed “it would be strange if we were a city agency for one purpose … and not for other purposes like FOIA.”

Brushing aside bitter memories of the parking meter deal and fears of user fees to guarantee investment returns, the City Council voted last spring to approve a revolutionary change that will allow private investors to pump $1.7 billion into“”transformative” infrastructure projects the city cannot afford to build on its own.

The 41 to 7 vote came after the mayor’s forces buried a pair of alternative ordinances that would have required City Council approval of all Trust-funded projects and empowered Ferguson to investigate the Trust, among other safeguards.

The money is expected to come from five financing giants, the largest chunk from the Spanish-Australian consortium that paid $1.83 billion to lease the Chicago Skyway for 99 years in exchange for pocketing tolls and continuing to raise them.

The Trust will launch with $200 million in energy efficiency projects for government buildings — including converting water pumping stations from steam power to electricity — expected to generate a 20 percent energy savings that will be used to repay investors. The Cultural Center, where the second meeting was held, is one of those buildings.

During Tuesday’s meeting, Hoffman questioned why some “portions of city government, including sister agencies” are already factoring anticipated energy savings into their budgets and incorporating those projects into their presentations to bond investors.

“You don’t want to see a government get too locked into the savings before the deal. Then, there’s pressure to do the deal because you need those savings,” Hoffman said, apparently referring to how Daley pressured aldermen to approve the parking meter deal.

Chief Financial Officer Lois Scott countered, “I couldn’t agree more. One of the most important and precious things about the Trust is your independence.”

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