March 25, 2016 6:52 pm
Published by Michael
Even as they ran a network of charter schools for thousands of students in low-income neighborhoods across Chicago, United Neighborhood Organization leader Juan Rangel and other UNO officials were piling up big bills at fancy restaurants and for travel on the taxpayers’ dime, records obtained by the Chicago Sun-Times show.
In the year before a contracting scandal led to Rangel’s forced resignation, the clout-heavy Hispanic community organization and charter-school operator spent more than $60,000 for restaurants on his American Express “business platinum” card, according to the records, which UNO fought for nearly three years to keep secret.
The spending spree included $1,000-or-higher tabs at Gene & Georgetti, Carmichaels, Vivo Chicago, Rosebud Prime, the East Bank Club, Carnivale, a downtown hotel’s rooftop bar and Soldier Field’s concessions during a soccer game featuring Mexico’s men’s national team.
And UNO spent more than $60,000 a year on travel in 2010 and 2011, the internal records show. Rangel and two aides, Miguel d’Escoto and Francisco “Pancho” d’Escoto, met during that trip with the d’Escotos’ uncle, a former diplomat advising them on possible expansion.
Rangel’s and UNO’s fortunes took a downturn after the Sun-Times reported in February 2013 that the organization paid millions of dollars from a $98 million state school-construction grant to companies owned by two brothers of Miguel d’Escoto, who was Rangel’s top deputy, and to other contractors with close ties to the group.
As federal and state authorities began investigating, the newly obtained records show, UNO officials spent hundreds of thousands of dollars trying to contain the scandal, which cost the organization millions of dollars in state funding and resulted in a federal consent decree requiring outside oversight of the group’s contracting practices.
UNO has paid more than $962,000 since the start of 2013 to the firm of Mary Patricia Burns, who became the group’s primary lawyer shortly after the scandal broke.
Her law firm, Burke Burns & Pinelli Ltd., has been a major campaign contributor to Illinois House Speaker Michael Madigan. About 96 percent of students at UNO’s 16 campuses qualify for free or reduced lunches, records show.
Despite being almost entirely government-funded, UNO leaders fought to keep the spending records secret, arguing that they didn’t have to comply with the state’s Freedom of Information Act because UNO is a private organization. CPS funding to the UNO schools for the 12 months ending last June topped $85 million, out of the charter network’s total revenues of about $91 million, records show.
In 2014, the charter network paid the parent organization nearly $7.5 million in management fees, about $2.5 million in rent and more than $3 million for janitorial services. A judge upheld the attorney general’s decision in February 2015, but UNO appealed.
Under new leadership, UNO eventually settled the case, providing the news organization with all of the previously disputed documents.
Those records detail how the organization’s leaders enjoyed perks that many of the working-class families served by the charter schools could only imagine.
Rangel whose annual salary was $275,000 and other UNO executives were regulars at some of the city’s most upscale restaurants. His uncle Miguel d’Escoto Brockmann is a Catholic priest who was president of the United Nations General Assembly in 2008 and 2009 and previously was Nicaragua’s foreign minister.
Miguel D’Escoto said he and Rangel met with his uncle to try to form a group that could provide education “in areas or conditions of crisis.”
Miguel d’Escoto quit his $200,000-a-year post at UNO eight days after the first of the Sun-Times’ reports on the group’s spending were published.
Andersen, the retired judge, was then hired by UNO at a rate of $800 an hour altogether being paid more than $59,000.
UNO also paid for two lawyers ($148,264.62), a real-estate development expert ($60,182.50) and a licensed private investigator ($8,667.50) to aid Andersen.
After Rangel promised to institute reforms suggested by Andersen, state officials lifted a suspension of UNO’s grant in June 2013. In June 2014, the group settled the charges, which accused UNO of misleading bond investors about the insider deals.
In the end, the scandal cost UNO $15 million of the promised $98 million state grant.
UNO had paid $604,500 to the Roosevelt Group lobbyists between December 2006 and August 2013, records show.
The lobbyists at first charged UNO $3,000 a month, raising that to $7,500 in June 2009 when the Illinois General Assembly approved the grant for new school buildings.
The Roosevelt Group billed an extra $25,000 the day after the law approving the grant took effect. In November, UNO officials said the organization was “on the brink of insolvency.”
Key dates in UNO schools saga
1998 United Neighborhood Organization opens its first government-funded charter school.
2005 The group begins expansion that eventually has it operating 16 schools across the city of Chicago.
2009 Spearheaded by House Speaker Michael Madigan, the Illinois Legislature approves a $98 million school-construction grant for UNO schools a record public subsidy to charter schools.
2011 UNO CEO Juan Rangel co-chairs Rahm Emanuel’s first campaign for mayor.
Feb. 7, 2013 Leader of clout-heavy UNO quits’
June 3, 2014 SEC charges UNO with defrauding investors
July 14, 2015 Ousted UNO chief Rangel got secret $206,250 payout
