Rahm Emanuel’s next Ventra headache: minority contracting
BY FRAN SPIELMAN City Hall Reporter November 20, 2013 9:00PM
Updated: December 23, 2013 2:27PM
The disastrous rollout of the CTA’s new Ventra fare payment system already has a heavy potential for political fallout for Mayor Rahm Emanuel.
Now, the mayor has a new headache: minority contracting.
Only 7.2 percent of the $329 million base contract with Cubic Transportation, the Ventra vendor — minus financing costs — is shared by black contractors.
Chicago firms are getting a 9.6 percent piece of the pie.
Twenty-six percent of that 9.6 percent is going to a white woman who once served as former Mayor Richard M. Daley’s campaign manager for “marketing and outreach.” Carolyn Grisko, who started her own firm after running Daley’s 1995 campaign, said she has been working on the Ventra contract “since Day One”— not just since the rollout went south.
“We did all the branding, advertising and community outreach. We had to develop all the advertising in-station and out-of-station,” Grisko told the Chicago Sun-Times. Her 12-year contract coincides with Cubic’s and is valued at $8.3 million over the life of the agreement.
Grisko and CTA President Forrest Claypool worked together at Daley’s City Hall. She was a deputy mayoral press secretary. He served two stints as Daley’s chief of staff.
But CTA officials maintained that Grisko and the other subcontractors were “part of the bid package submitted by Cubic in January 2011,” five months before Claypool’s arrival at the CTA.
Grisko’s firm has the second-largest share of eight Cubic subcontractors.
The biggest piece of the pie — 6.98 percent — went to Saunte Corp., a Chicago firm owned by an African-American woman hired to provide “staffing services to support administrative and technical . . . back-office functions.”
The Cubic team also includes two other black contractors. Chicago-based Inter-City Supply Co. will be paid $600,000 over 12 years — or 0.18 percent — to provide office supplies. Atlanta-based F.M. Shelton Inc. gets $155,000 — or 0.05 percent — to supply electronic components.
Stephen Mayberry, a CTA spokesman, said Cubic is meeting the 12 percent “disadvantaged business enterprise” set-aside established for the massive fare collection contract.
He noted that federal and state law requires the CTA to use a DBE designation that’s far more restrictive than the city’s minority set-aside requirements. It’s confined to companies whose owners have a net worth of $1.32 million or less.
Still, the 7.2 percent share is not sitting well with black elected officials, whose constituents have born the brunt of the Ventra headaches.
“The majority of the ridership is African American. To see that amount of money go to people other than people of color is troubling, especially in today’s times,” said Ald. Anthony Beale (9th), chairman of the City Council’s Transportation Committee.
“We addressed the Englewood Flyover when those numbers came out. They re-bid it and the numbers did go up,” he said. “A low percentage going to African Americans on this contract . . . is uncalled for . . . I’m not happy. We’re going to do everything we can to address it.”
Ald. Howard Brookins (21st), chairman of the City Council’s Black Caucus, called the 7.2 percent share for black contractors “outrageous” and demanded a “full investigation” to determine how and why African Americans were shortchanged.
“I need to see what the explanation is. Were [services required] so proprietary in nature that there were few African Americans in that space? What was left out other than the work performed by Cubic themselves?” Brookins said.
“One of the things we’ve been charged to do is to make sure African-American companies in this town get a fair shake,” Brookins said. “This is not going to sit well with the African-American business community, our constituents or the Black Caucus.”
Brookins noted that the Ventra disappointment comes at a time when Emanuel’s standing among black voters has already plummeted because of the teachers strike, a record number of school closings and persistent crime.
“In the long term, all of these things could have a cumulative effect if the blame is determined to be on his administration. The credibility of Forrest [Claypool], Terry [Peterson, CTA board chairman] and, to a small extent, the mayor’s office could be affected,” he said.
U.S. Rep. Danny Davis, D-Ill., said he’s “surprised” that a CTA that “impressed” him by rewarding black contractors on the Red Line modernization project has fallen so short when it comes to implementing the Ventra system.
“I am absolutely disappointed that African Americans did not get a larger piece of the opportunity and especially that there are no African-American males awarded anything on this contract,” Davis said by phone.
Asked if the minority participation represented a hot potato for the CTA and the mayor, Davis said: “It is and the transit authority should have the opportunity to delve into it and review it. I’m not sure I can ever say enough is enough is enough when you’re not getting very much.’’
During the minority contracting controversy that surrounded Metra’s $131 million Englewood Flyover project, Emanuel supported U.S. Rep. Bobby Rush, D-Ill., in his push for a bigger piece of the pie without justifying the means: a threat to shut down the project if minority contractors didn’t get their fair share.
“Somebody can say, ‘Well, do you like the tactic?’ Forget the tactic. He’s got peoples’ attention, which means we’re going to get a solution to this problem,” the mayor said then. “He’s got everybody’s attention now to focus on what Metra has to do to make sure that the contract and the employees reflect the values we state as a city and a state — that everybody is going to participate and have a chance to participate.”
Earlier this year, Rush angrily denied that he pressured former Metra CEO Alex Clifford to cut a $50,000 check to a national organization the congressman had recommended to monitor minority hiring for the massive South Side rail project.
Rush’s name surfaced in July when Clifford, in explosive testimony before the RTA board, said he was forced out at Metra because he resisted political pressure from high-ranking Illinois politicians, including Illinois House Speaker Michael Madigan, D-Chicago.