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Mayor says ex-UNO chief was a ‘distraction’

Juan Rangel former chief executive officer United Neighborhood Organizatiwith Mayor Rahm Emanuel Little Village High School July  2012

Juan Rangel, former chief executive officer of the United Neighborhood Organization, with Mayor Rahm Emanuel at Little Village High School in July 2012 | Sun-Times file photo

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Updated: January 14, 2014 12:19PM

Juan Rangel was a “distraction from the mission” of the United Neighborhood Organization and did the right thing by resigning as the clout-heavy organization’s chief executive, Mayor Rahm Emanuel said Wednesday.

Five days after a contracting and hiring scandal that triggered a federal investigation and a state funding cut-off forced Rangel to resign his $250,000-a-year job at the non-profit that operates the largest charter school network in Illinois, Emanuel left no doubt that he supported the move.

The subject is a politically-sensitive one for Emanuel for several reasons.

The mayor is a huge proponent of charter schools. Rangel is Emanuel’s former campaign co-chairman and was a mayoral appointee to the Emanuel-chaired Public Building Commission.

And after championing a host of ethics reforms at City Hall, Emanuel cannot afford to look the other way when allegations of contract cronyism and hiring favoritism are raised anywhere, let alone at an organization run by a close political ally.

Rangel had three family members on the UNO payroll. Sources said two of them quit recently, including Rangel’s nephew Carlos Jaramillo, UNO’s deputy chief of staff.

“UNO is both part of the education of our children in Chicago because about 5,000 kids go to those schools. And they’re also one of the longest established neighborhood groups in America,” the mayor said after Wednesday’s City Council meeting.

“Juan Rangel has served it and served it well. But he knows that he was a distraction from the mission. My primary mission is the education of our children and I want to see the high quality education of the children in those schools maintained.”

The mayor was asked whether the contracting scandal uncovered by the Chicago Sun-Times has shaken his confidence in UNO as a charter operator that receives millions from the Chicago Public Schools.

“They have a lot to answer and there are proper people asking questions, okay?” the mayor said, apparently referring to the federal Securities and Exchange Commission.

“UNO serves a role in its schools separate and distinct from what it does as a neighborhood group. And I want to see those standards up kept. The most important standards are the standards as it relates to the education of our children.”

In addition to his political alliance with Emanuel, Rangel has close ties to Ald. Edward M. Burke (14th), whose daughter-in-law works for the organization, and to Illinois House Speaker Michael Madigan (D-Chicago), who sponsored a $98 million state school-construction grant to UNO in 2009.

The state money — believed to be the largest government subsidy for charter schools in the country — fueled UNO’s rapid growth as a charter operator. But the way UNO spent the money caused Rangel’s downfall.

Rangel’s top aide, Miguel d’Escoto, resigned in February, days after the Chicago Sun-Times reported UNO had given $8.5 million of business — paid for with the state grant — to companies owned by two of d’Escoto’s brothers.

The revelation prompted Gov. Pat Quinn to suspend grant payments to UNO in April, which temporarily halted construction of a new UNO high school on the Southwest Side.

Rangel offered a public apology, saying he had “failed to exercise proper oversight.”

Quinn lifted the suspension, and work on the UNO Soccer Academy Charter High School resumed. But Quinn disclosed recently that he has suspended payments from the remaining $15 million after the federal Securities and Exchange Commission began investigating UNO over its bond dealings.

In September, the SEC’s enforcement division in Chicago told UNO the agency “is conducting an investigation . . . to determine if violations of the federal securities laws have occurred.”

The SEC asked for documents related to $37.5 million the group borrowed from private investors, as well as records involving the state grant.


Twitter: @fspielman

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