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UNO boss Rangel: ‘I have failed’

New UNO board members

The United Neighborhood Organization named new members Tuesday to its board and that of its charter-school network, in an effort to win back state funding that was halted following a Chicago Sun-Times investigation. Juan Rangel is stepping down from his unpaid posts as a member of both the UNO and UNO Charter School Network boards but keeping his $250,000-a-year job as UNO’s chief executive officer, a post he’s held for 17 years.

The new UNO board:

◆ Martin Cabrera Jr., founder and CEO, Cabrera Capital Markets, one of two underwriters when UNO’s schools borrowed $37.5 million through a 2011 bond issue.

◆ Joseph de Lopez, vice president, Vorhees Associates, former Winnetka police chief.

◆ Freddy Santiago, pastor, Iglesia Rebano Church.

◆ Peter Skerry, Boston College political science professor and Brookings Institution senior fellow.

◆ Rodolfo Benitez, UNO parent.

◆ Mariana Chavez, UNO parent.

The new UNO Charter School Network board:

◆ Vincent Allocco, president and executive director, El Valor, a not-for-profit group.

◆ Rev. Chris Devron, president, Christ the King School.

◆ Richard Rodriguez, vice president and business development director, Lend Lease and former CTA president — the lone holdover from the old UNO boards.

◆ Dr. Gilbert Munoz, medical director, the Chicago Fire soccer team.

◆ Silverio Nodal, UNO parent.

◆ Jenni Jimenez, UNO parent.

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Updated: September 13, 2013 9:00PM

The embattled United Neighborhood Organization announced steps Tuesday its leaders hope will win the resumption of tens of millions of dollars in state funding for construction of a charter high school on the Southwest Side.

Juan Rangel, UNO’s $250,000-a-year chief executive officer, is stepping down from unpaid posts on the boards that oversee UNO and its charter-school network, which is the biggest in Illinois, but will stay on as CEO.

UNO is overhauling its board and turning over construction of the new school to an outsider to oversee.

“I am here today to apologize,” Rangel said at a news conference to announce the moves. “I have failed.”

He said he had “failed to exercise proper oversight . . . For these failures, I am sorry, and I take full responsibility.”

In late April, Gov. Pat Quinn suspended all remaining payments from a $98 million school construction grant after the Chicago Sun-Times reported $8.5 million of the state funding went to companies owned by two brothers of Miguel d’Escoto, a top UNO executive who quit his $200,000-a-year post following the news reports.

Hiring the d’Escoto brothers’ companies was “simply not appropriate,” Rangel said Tuesday. “It smacks of nepotism.”

In response, Federico d’Escoto, president of d’Escoto Inc., which UNO has paid nearly $2.5 million since 2007, including more than $1.8 million out of the state grant, said he is “very proud” of his company’s work for UNO and added: “None of the d’Escoto brothers took any part in UNO’s decision to hire d’Escoto Inc. for any projects relating to state grant money.”

Even with the steps announced Tuesday, Quinn spokeswoman Brooke Anderson said the remaining state money is still on hold.

Rangel also is stepping down from the board of the Public Building Commission of Chicago, which oversees construction of public schools, police and fire stations and other government buildings. Mayor Rahm Emanuel appointed him to that board soon after being elected mayor in 2011. Rangel had cochaired Emanuel’s mayoral election campaign.

To win back the state money, UNO is turning to a not-for-profit group called IFF, which “will oversee the completion of the construction of the new UNO Soccer Academy Charter High School” and “have the sole discretion to approve any and all contractors, subcontractors or material providers performing work relating to the project.”

UNO’s newly reshaped board will be headed by Martin Cabrera Jr., founder and chief executive officer of Cabrera Capital Markets, a Chicago financial services firm that was one of two underwriters for a $37.5 million UNO bond issue in 2011. Cabrera — who said his firm was paid $36,567.38 for that UNO bond deal — was appointed chairman of the Chicago Plan Commission by Emanuel in February 2012, and his firm has been a regular recipient of city bond business.

Cabrera said Rangel would stay on in UNO’s top job, saying there is “no one more suitable to be CEO.”

The only holdover from the old UNO board is Richard Rodriguez, a former Chicago Transit Authority president.

State officials have demanded UNO get an independent, outside audit — now in the works — of its handling of the state grant.

The Quinn administration investigated in response to the news reports and determined that UNO violated a conflict-of-interest clause in its state deal. After Quinn froze the state money, work was halted on the new UNO high school when the general contractor walked off the job, saying UNO was behind in its payments.

Work on the school — now about 65 percent finished — won’t start up again until the state funding is resumed, according to Joe Neri, IFF’s chief executive officer.

UNO needs the state funding restored by this weekend to be able to finish construction in time for classes to begin at the new school in August, Rangel said.

State officials say UNO so far has received $55 million of the $98 million it was awarded in 2009 under legislation sponsored by House Speaker Michael Madigan (D-Chicago). Most of the rest has been budgeted for the new high school, at 51st Street and St. Louis Avenue.

Neri said he did not know how much IFF would be paid but that the money would not come out of the state grant.

Last week, Wayne Andersen, a retired federal judge UNO hired for $800 an hour following the Sun-Times reports, urged the organization to adopt “robust conflict-of-interest” policies, put “independent directors” on its boards and require sealed, competitive bidding for contracts for its schools. Rangel said Tuesday he will accept all of Andersen’s recommended reforms.

The former judge also recommended that UNO — which relies largely on funding from the Chicago Public Schools for its charter operation — ban nepotism in hiring. In March, the Sun-Times reported that UNO has three Rangel relatives on the payroll.

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