Privatization or Cronyization?
Mayor Daley has become a public fan of “privatization” over the years.
He privatized the Skyway. Talked about privatizing Midway Airport. Privatized the parking meters.
And now he’s privatizing city trucking (gee, there’s never been a city trucking scandal before, has there?)
Anyway, true privatization is supposed to save taxpayers money by putting out certain government functions to bid to private companies. That is — putting it out in a competitive bid. Basic free market economics teaches us that this competition breeds better service and lower cost.
Unless, of course, the privatization is rigged and the bidding is anything but competitive.
Which brings us to this story in this morning’s Chicago Tribune:
About 60 recently laid-off Chicago truck drivers picketed Friday at a city facility on the South Side, protesting that politically connected private companies are now doing work public employees performed for Mayor Richard Daley’s administration.
Under a deal that went into effect July 1, the city hired private contractors to haul construction debris from city work sites for the Water Management Department. Among the companies chosen was Reliable Asphalt Corp., which received a $158 million, three-year contract.
Reliable owner Michael Vondra has donated tens of thousands of dollars to local politicians, including Daley, the Democratic organization in the mayor’s 11th Ward power base and the pro-Daley Hispanic Democratic Organization. City records show Reliable’s lobbyists on the deal are Victor Reyes, a former Hispanic Democratic Organization chairman and top mayoral aide, and David Bonoma, son of Daley’s longtime secretary.
Privatization is a convenient buzzword behind which the Daley Administration can hide behind to dole out lucrative contracts to political cronies while pretending to save the taxpayers money.
All Signs Point to Olympic-Size Bum Deal for Taxpayers
We just ran across this recent story about the massive cost overruns that plague Vancouver — host city for the 2010 Winter Olympics:
Olympic-related construction bills continue to soar over budget for beleaguered Vancouver taxpayers, with some estimates putting the total added costs at close to $45-million. That’s apart from the troubled Millennium Project to house Olympic athletes, which is over its original budget by more than $100-million and has had to have its financing taken over by the city.
Earlier this year, we saw a major government bailout for the 2012 London Olympic Games — which have been plagued by massie cost overruns for years.
How about last year’s Beijing Olympic Games? Well, according to this story, the initial estimates of a cost of 28 to 30 billion yuan was blown away with actual costs exceeding 400 billion yuan.
What’s to make us think Chicago would be able to avoid these Olympic-size cost overruns?
History, for one. Just look at recent examples of major projects here in the Windy City.
Take, for example, Millenium Park. It’s certainly a nice place to visit — but the project was completed 4 years past its deadline and cost about three times as much as originally budgeted. Taxpayers foot the bill for $270 million of those cost overruns.
And what about Mayor Daley’s proposed CTA “Super Station” at the Block 37 site in Chicago’s Loop? Here’s a quick update on the status of that boondoggle:
After spending $213 million, the City of Chicago has decided to suspend indefinitely construction of an underground “super station” for express train service to and from the city’s major airports and downtown.
To build the station as originally planned, total spending would be about $320 million, more than $100 million over budget, according to city officials. Skeptics say the estimate of an additional $100 million may be low, noting the city has repeatedly underestimated costs on major projects ranging from football stadium renovations to park construction.
The experience of other major Olympic host cities, combined with the City of Chicago’s track record of botched budgets and deadlines for other projects, doesn’t bode well for any taxpayers hoping to avoid footing the bill for the 2016 Olympic Games.
All the more troubling given today’s news about the City of Chicago’s budget woes.
Despite Mayor Daley’s and Pat Ryan’s cheerleading for the 2016 Games … all signs point to a bum deal for the Chicago (and Cook County and Illinois) taxpayers.
Follow the Money of Olympic Demolition Crew
The Sun-Times reports that Mayor Daley officially took a big step toward the 2016 Olympic effort with the awarding of lucrative contracts to construction companies to demolish the current Michael Reese Hospital site:
The Mayor Daley-chaired Public Building Commission today took a giant step toward building the $1.1 billion Olympic Village on the Michael Reese Hospital site–alternately viewed as the riskiest element of Chicago’s bid and its most significant legacy. The PBC awarded $11 million worth of contracts to a pair of companies responsible for building abatement and demolition.
So the first big Olympic contracts are awarded. Wanna bet they’re going toward firms with strong histories of giving campaign cash to Cook County insiders?
Let’s take a look…(the below campamign contributions are just some of those listed on the Illinois State Board of Elections site).
Brandenburg Industrial Service Co. (awarded $7.98 million in contracts)
- Friends of Michael J. Madigan - $20,000 contribution (11/1/96)
- Citizens for Moreno - More than $13,000 in contributions since 2002
- Richard M. Daley Campaign Committee — $2,500 (11/28/01) by company president Thomas J. Little
- Richard M. Daley Campaign Committee — $3,000 since 2001 by company vice president Jack Jasinowski
- Committee to Elect Anne M. Burke (Supreme Court Justice and wife of Alderman Ed Burke) — $2,000 in 2008 by company president Thomas J. Little
- Friends of Edward M. Burke — $1,500 on 11/16/02 by company vice president Jack Jasinowski
- 11th Ward Regular Democratic Organization (John Daley) — $1,250 since 2003 by company vice president Jack Jasinowski
- Friends of Sandi Jackson (wife of Rep. Jesse Jackson, Jr.) — $3,500 in 2007 by company president Thomas J. Little
- Friends of Blagojevich — $4,000 on 6/19/02 by company vice president Jack Jasinowski
- The Cicero Good Government Group (controlled by insider Ed “Fast Eddie” Vrdolyak) — $4,500 since 2003 by company vice president Jack Jasinowski
Heneghan Wrecking Company ($3.19 million in contracts)
- Richard M. Daley Campaign Committee — $1,200 since 2001
- Political committees controlled by Alderman Ted Matlak — $3,200 since 2003
- Friends of Edward M. Burke - $1,500 on 11/19/08
- Citizens for Patrick O’Connor — More than $3,200 since 2000
- 11th Ward Regular Democratic Organization (John Daley) — $1,400 since 2003
- 11th Ward Regular Democratic Organization (John Daley) — $600 on 5/4/09 by company director Hugh Heneghan
- 32nd Ward Regular Democratic Organization — $1,900 since 2000
- Friends of Vi Daley — $5,000 since 2006 by company president Patrick Heneghan
- Friends of Vi Daley — $4,500 since 2007 by company vice president Rita Heneghan
Cook County Board Prez Fun
How serious is Congressman Danny Davis about running for Cook County Board President? Well, he’s got an “exploratory committee” Web site up and running.
In other news, Chicago Public Radio stokes interest in whether or not Hizzoner will issue an “endorsement against Stroger” in the County Board Prez race. Daley pooh-poohs the idea. Only time will tell.
Taxpayers on the Hook for Olympics Starting this Week
This morning’s Chicago Tribune features a story on the city of Chicago’s acquisition of the proposed 2016 Olympic Village site — assuming tomorrow’s “closing on the $86 million purchase of the Michael Reese hospital site” goes as planned.
But the story also carries some stark reminders of the financial problems that other major Olympic cities are facing — namely Vancouver and London, both of which have needed taxpayer bailouts despite promises of private financing.
The acquisition of the Olympic Village site carries substantial risks, given the moribund state of the credit markets, which has created wrenching problems for Vancouver and London. Both cities have had to bail out their respective Olympic Village projects, which, like Chicago’s, were supposed to have been privately financed.
And for Chicago, those struggling projects hover like specters, raising any number of questions. Will the lending spigot have opened sufficiently by 2012, when work is slated to begin? Will the city’s glut of new housing units have been absorbed by then? Will Chicagoans line up for condos and rental apartments that won’t be available until 2016, and only after they have been crash pads for several weeks for about 16,000 visiting athletes and coaches?
As we’ve written about before, Chicago’s track record on a large-scale projects, such as Millenium Park and the proposed CTA mega-station in the Loop, is less than stellar. Given this track record of going over-budget and over-schedule, how can we expect anything different from the Olympics?
And, when that taxpayer bailout comes — will it be limited to the taxpayers of Chicago, or will Mayor Daley come looking for a handout from Cook County and Springfield, as well?
Chicago Journal: Quit Pretending on Taxpayer Funds for Games
The Chicago Journal this week comes out swinging against Mayor Daley’s committment of taxpayer money to fund the 2016 Olympic Games:
The Daley Administration and its lackeys in the local Olympic organizing committee have repeatedly promised that no public money would be spent putting on a 2016 Olympiad here.
“Taxpayer money is not being used for the games,” John Murray, chief of bid operations for Chicago 2016, told us last year.
Well, no. That hasn’t been true for a while now. Shame on anyone for pretending otherwise.
Good for the Chicago Journal. Keep working to hold Mayor Daley and the Chicago City Council accountable.
Mayor Daley’s Olympic Confusion
Filed under: 2016 Olympics, Mayor Daley, Spending, Taxes
So, did Mayor Daley commit the taxpayers as unwitting guarantors of the cost of the 2016 Olympic Games … or didn’t he?
Well, last week he sent word from Switzerland that he had, in fact, done just that.
But now, in a press conference back home in Chicago, Mayor Daley offered an explanation that was, well, confusing as heck.
The Chicago Tribune reports:
In a news release, Daley said he may have “spoke too quickly” when he agreed in Switzerland to give an unlimited financial guarantee.
Pressed by reporters, Daley then seemed to suggest he hadn’t made a blanket guarantee: “I just said I will sign an agreement, I didn’t say which one.” He added the city still planned to amend the Olympics contract to ease Chicago’s liability.
Well, that certainly clears things up, eh?
As Commissioner Peraica points out in this video, despite the firestorm surrounding Daley’s announcement from Switzerland, the mayor and Olympic organizers still are leaving taxpayers in the dark — even holding secret meetings with Chicago aldermen.
What should worry all Illinois taxpayers — even the most ardent Olympic supporters — is Chicago’s track record on funding and completing large projects.
We all can remember the Millenium Park billions-over-budget-and-years-late project…
And how about the CTA “megastation” project that has cost tens of millions already and now sit sidle in the middle of Chicago’s Loop?
Chicago just hasn’t shown the ability to effectively and efficiently manage large projects. And that makes us worried that the taxpayers will be left footing the bill for cost overruns. Furthermore, it’s very likely that, if those cost overruns are significant, that Mayor Daley will use his clout to push some sort of taxpayer bailout from Springfield.
And that leaves every single taxpayer in the state of Illinois on the hook for yet another Chicago boondoggle.
This isn’t about the Olympic Games. It’s about protecting the taxpayers. It’s about requiring Mayor Daley to, once and for all, act in a responsible, transparent manner that doesn’t insult the voters and throw our hard-earned tax dollars down the drain.
Da’ Mayor Says He’s “Sorry” … Boy, He Sure Is
The week after Commissioner John Daley tried to attack Commissioner Peraica for fighting for lower taxes and a streamlined budget in Cook County … his brother, Mayor Richard Daley, turned an otherwise boring press conference (below) on home foreclosures into an absolutely surreal event (even by Chicago standards).
He read a prepared statement expressing that he was “sorry” about the hiring fraud scandal in city government - and then preceded to angrily reject the media’s pleas to ask questions about the statement and/or scandal.
A “sincere” apology and the city is magically reformed, right?
It kind of reminds us of the scene in “The Naked Gun” when Lt. Drebin (Leslie Nielsen) assures the gathering crowds that there is “Nothing to see here!” as the fireworks factory continues to explode behind him.
It strikes us as funny that, while everyone accuses Blagojevich of being detached from reality - this mayor has somehow avoided this same accusation.
So you’re saying there’s no corruption … oh, wait
From today’s Sun-Times:
Asked whether there is an ethical cloud hanging over O’Hare, the mayor said…
“No. [Not] so far. We don’t know yet.”
Gee, Mr. Mayor. That gives us a lot of confidence as we’re set to hand you $20 billion for this boondoggle.
More Coverage from the ‘Stop O’Hare’ Press Conference
Medill Reports has this insightful report on yesterday’s press conference to oppose Mayor Daley’s O’Hare expansion project:
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