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Ex-judge: Charter-school operator UNO needs ‘robust’ policy against conflicts

Juan Rangel CEO United Neighborhood Organizati| Brian Jackson~Sun-Times

Juan Rangel, CEO of the United Neighborhood Organization | Brian Jackson~Sun-Times

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Updated: June 25, 2013 6:33AM

The United Neighborhood Organization needs to adopt “robust conflict-of-interest” policies in the wake of a scandal that’s jeopardized tens of millions of dollars of state funding for UNO’s network of charter schools in Chicago, a retired federal judge hired by the politically influential group urged Thursday.

Former Judge Wayne Andersen also recommended that UNO — which relies largely on funding from the Chicago Public Schools for its charter operation — require sealed, competitive bidding for contracts for its schools.

UNO commissioned Andersen’s review, hiring him for $800 an hour, in response to reports in the Chicago Sun-Times that prompted Gov. Pat Quinn last month to suspend the remaining payments to the group from a $98 million state school construction grant.

Those reports revealed that $8.5 million of the state funding went to companies owned by two brothers of Miguel d’Escoto, a top UNO executive who resigned his $200,000-a-year post in the wake of the stories, and that UNO did not follow the sorts of procedures that government agencies usually require in hiring contractors.

In his report to UNO, the retired judge did not address the propriety of the group’s actions in hiring the contractors owned by d’Escoto’s brothers, saying his task wasn’t to do “a complete analysis of the procedures used (or not used) for the administration of the [state] grants, nor is it an internal investigation to identify any wrongdoing relative to past expenditures.”

But Andersen said in an interview, “Hopefully we don’t have a situation again in which a top staff person is working for UNO at a time in which they enter into major contracts with a relative of the staff person.”

Andersen said he did not know yet how much the bill for his study would be.

Juan Rangel — UNO’s $250,000-a-year chief executive, who also co-chaired Mayor Rahm Emanuel’s 2011 campaign — would not say Thursday what steps the organization will take as a result of Andersen’s report.

Rangel said, “We need to make changes,” but he did not say whether he would accept Andersen’s recommendations.

State officials have been given a copy of the report, but a Quinn administration spokeswoman said the grant suspension remains in effect “until UNO resolves its ethics problems.”

Quinn is demanding UNO get an outside audit of its handling of the state funding.

Quinn aides investigated UNO’s handling of the state money following the news reports and determined that the group violated a conflict-of-interest clause in its state deal.

Work was then halted on a high school UNO is building on the Southwest Side, with the main contractor saying the group had fallen behind in paying its bills.

Andersen also recommended that UNO:

Ban nepotism in hiring. The Sun-Times reported in March that UNO has three of Rangel’s relatives on the payroll.

Expand the boards of UNO and its charter-school network by adding “independent directors with needed expertise.”

Require board approval for all major contracts and salaries. Andersen said it did not appear that the board signs off on either.

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