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Shaw Thoughts

I’ve been communicating with many of you for nearly 40 years as a newspaper reporter, a political correspondent on TV, a radio commentator and now as President & CEO of the Better Government Association, an anti-corruption civic watchdog organization.

I know what good and bad government look like, who’s using your hard-earned tax dollars wisely (and who’s not), and what we can rightfully demand of our elected and appointed officials to reform government that is broken at virtually every level. I know where the bodies are buried, how to ask the tough questions and how to hold errant public officials’ feet to the fire.

This is where I’ll be posting pieces and producing videos that help you understand what’s going on in the governments around you, what we think about it and what should be done to make it better. After all, that’s who we are: The Better Government Association.

But we can’t do it alone. I can talk the talk, but you have to walk the walk with me and rest of us at the BGA. I hope this blog can inform, motivate and direct our campaign for better government. It’s our right. And their responsibility.

 

 

The recent dustup over the exorbitant severance deal the University of Illinois offered its embattled Champaign-Urbana chancellor, Phyllis Wise, reminds me of an oft-quoted line from the "Master of Malapropism," baseball great Yoga Berra:

"This is like déjà vu all over again."

ICYMI, Wise was set to resign after several major controversies, including an embarrassing revelation that she used a personal email account to conduct public university business.

Email abuse is a good government no-no, but we’ll save that for another column.

This one is about super-sized exit payouts, also known as "golden parachutes," to public officials who leave their jobs amid allegations of malfeasance or under-performance.

It’s like giving a maritime award to the Titanic captain for running into the iceberg.

In the case of Ms. Wise, whose salary as chancellor is a whopping $549,000, she was set to receive a $400,000 bye-bye bonus, along with a tenured professorship at $300,000 a year.

As mind-boggling as those numbers are to this Better Government Association watchdog, imagine the apoplectic reaction of students facing ever-rising college costs, including onerous debt loads.

Sadly, we’ve seen this indefensible largesse too many times before, and I’ve written about it —embattled public officials whose often hush-hush severance deals further enrich them on the taxpayers’ dime.

Remember former Chicago Public Schools chief Jean-Claude Brizard, who bumbled into the city’s first teachers’ strike in 20 years in 2012? He retired well before his two-year contract expired—with a $250,000 check.

Other charter members of the galling "Golden Parachute Club" include:

  • Former College of DuPage President Robert Breuder, who was offered a $763,000 contract buyout, and his name on a school building, despite a litany of dubious decisions and expenditures that sparked multiple investigations.
     
  •  Former Metra CEO Alex Clifford, whose forced departure for challenging House Speaker Michael Madigan’s personnel requests was accompanied by an $871,000 good-bye kiss.
     
  • Former City Colleges Chancellor Wayne Watson, who presided over a calamitous drop in the graduation rate but still walked off with a $125K bonus and $500,000 for unused sick, vacation and personal days.

Fortunately, U. of I. trustees recently wised up to Wise, rescinding her severance package at the urging of Governor Rauner, and the College of DuPage board is moving to unravel Breuder’s severance deal.

Even state lawmakers in Springfield are getting fed up, voting a few months ago to end the secrecy surrounding many of these "golden parachutes" by making government severance agreements available under the Freedom of Information Act.

The bill, backed by the BGA, is now sitting on the governor’s desk, so someone please pass Mr. Rauner a pen.

Another important transparency initiative that’s gaining traction, and has BGA support, would prevent government agencies from putting confidentiality requirements, or "gag orders," on certain details in their exit agreements.

Illinois legislators should approve that measure next, and then have an intelligent conversation about whether to ban taxpayer-subsidized "golden parachutes" altogether, or at least limit them to special situations.

It’s more than enough to reward underperforming top tier bureaucrats with exceedingly generous salaries, benefits and perks while they’re on the job.

So let's admit, as Yogi said, that "we made too many wrong mistakes," and start reminding our evanescent exiting executives not to let the door hit them in the you-know-what on their way out.

 

Andy Shaw is President & CEO of the Better Government Association. He can be reached at ashaw@bettergov.org. Find him on Twitter @andyshawbga.

It’s been a long time coming.

Those iconic song lyrics came to mind a couple weeks ago, when Mayor Emanuel finally introduced a much-anticipated ordinance designed to protect city residents and taxpayers from another privatization fiasco like the parking meter abomination.

The plan is a modified version of a 2012 proposal that languished in a City Council committee until this year, when the administration finally got serious about the issue.

To refresh your memory, the Daley administration sold the city’s parking meters to a private company in 2008 for more than a billion dollars in a bang-bang deal that violated multiple good government tenets: Aldermen had just two days to consider the transaction, so there wasn’t time for public hearings or due diligence; the profits were quickly spent on one-time budget fixes; and the cash-starved city was excluded from any future parking revenue beyond fines for meter violations.

It was bad public policy and poor fiscal management.

City Hall wrung a few concessions out of the meter owners during Emanuel’s first term—the mayor called it "making a little lemonade out of a big lemon"—but it still leaves a sour taste in our mouths.

In fact, the only sweet spot, from our watchdog perch, is the fact that the deal sparked an ongoing conversation about the risks and rewards of privatization, and our BGA Policy Unit has been actively engaged in that discussion—beating the privatization reform drum at every turn, and most recently, working with the mayor’s team on a transparent process that ensures public input and City Council review in advance of all major privatization deals.

That’s essential because privatization is an increasingly popular option for governments saddled with budget, pension and infrastructure woes.

The BGA’s not endorsing privatization as a way to raise revenue, cut costs or operate more efficiently—decisions should be made on a case-by-case basis— but we’ve consistently argued for a codified assessment process to determine whether a prospective privatization is good or bad for taxpayers.

The new ordinance does that by:

  • Establishing a review period of at least 90 days between the time the administration first proposes a privatization and the Council’s final vote.
  • Requiring a public hearing, a Council committee hearing and a cost-benefit analysis on every proposal.
  • Calling on the administration to enlist an independent advisor to evaluate the fiscal and social impact of a proposal on city residents and taxpayers.
  • Mandating performance reviews to hold contractors accountable.
  • Ordering the City to set aside and invest a percentage of the proceeds of mega-deals to ensure future generations share the benefits.

No ordinance is perfect—this one’s not a panacea and it took far too long to reach critical mass—but it’s a valuable and necessary step for the City of Chicago.

Ald. Rod Sawyer, the co-sponsor, earns a shout out for his dogged determination to get it done.

And the Emanuel administration deserves recognition for consulting the BGA in the crafting of the ordinance at the same time we were shining a bright light on city government and holding its officials accountable.

Now it’s up to the entire City Council to do its job by giving the proposal careful but prompt consideration.

Get it on.

Andy Shaw is President & CEO of the Better Government Association. He can be reached at ashaw@bettergov.org. Find him on Twitter @andyshawbga.

Valerie Jarrett is a powerhouse with a killer resume: Trained lawyer, prominent Chicago business and civic leader, high-level mayoral aide, member of prestigious corporate and non-profit boards, mentor of young people, close friend of the Obamas, and senior Presidential advisor since 2009.

The current posting, as a key insider on the country’s biggest political stage, the White House, won her a cameo role on "The Good Wife."

It also invited the scrutiny of watchdogs like the Better Government Association, whose mission is to shine a light on government leaders and hold them accountable.

Recently our award-winning Washington, D.C. reporters, Chuck Neubauer and Sandy Bergo, did just that—breaking a story about Jarrett that appeared in the Sun-Times—and here’s an excerpt:

"Valerie Jarrett… personally benefited from an income tax ‘loophole’ that she has worked to close because Obama says it unfairly helps the ‘wealthy and well-connected.’

"The precise amount of the break Jarrett received under the controversial ‘carried interest tax loophole’ is not known, but the Better Government Association estimated it could have saved her $200,000 or more.

"The loophole was applied to Jarrett’s earnings from a 2013 Chicago real estate deal involving a $160 million luxury apartment high-rise – earnings that topped $1 million and came while she was working for the White House as a senior advisor to the president."

The front-page story attracted a lot of attention, but several local Jarrett associates said "so what?" because her actions don’t appear to violate any laws or circumvent any rules.

Maybe so, but consider that:

  • Jarrett was part of the White House push to close a tax loophole that benefits wealthy developers and investors.
  • So far the administration hasn’t been successful.
  • Jarrett, however, was very successful personally—profiting handsomely on a pre-White House real estate investment and then cutting her tax liability in half—by privately taking advantage of the same tax break she was fighting publicly.


So, on the one hand she’s criticizing the "carried interest" loophole, as Obama did in a TV ad against 2012 Republican rival Mitt Romney.

On the other hand she’s profiting from it.

Disingenuous? Unethical? Conflict of interest? Legitimate questions watchdogs ask every day.

That’s the "what."

So how could Jarrett have handled it differently?

  • Recuse herself from the administration’s attempt to close the loophole.
  • Not use it personally.
  • Disclose the details publicly after benefiting from it.

There’s no indication she did any of the above.

But Jarrett wouldn’t talk to us for the story, answer our detailed questions or even confirm she profited from the loophole.

We had to confirm it independently.

Not surprisingly, she wasn’t very talkative when the BGA revealed, in an earlier story, that she started collecting a pension of about $35,000 a year, from her part-time role as CTA board chairman, after she turned 50 in 2006.

That’s on top of her $172,200 White House salary.

Some might say "so what?" to that disclosure.

Others appreciate stories about sweet pension deals and "double dipping"—collecting two government paychecks at the same time.

Either way, we’ll keep shining a light on government officials in positions of public trust—regardless of their power, prominence or defenders—for a simple reason:

Taxpayers and voters deserve to know this stuff.

Andy Shaw is President & CEO of the Better Government Association. He can be reached at ashaw@bettergov.org. Find him on Twitter @andyshawbga.

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