Mishandling of energy project cost Chicago taxpayers millions, watchdog reports
Chicago's former legislative inspector general turned government watchdog has called on the mayor and Infrastructure Trust to explain how officials permitted large portions of city-owned buildings to be liened to a private bank to finance an energy upgrade project.
That project ended up wasting millions of tax dollars, according to a recent investigative report issued by the Chicago and Illinois government watchdog group, Project Six.
"Mayor [Rahm] Emanuel and the Infrastructure Trust should explain why they put city buildings at risk of having critical parts of the building repossessed by Bank of America," Project Six CEO Faisal Kahn said during a Chicago City Wire email interview. "Taxpayers can understand the city has a budget crisis and bad credit, but bad deals like the Infrastructure Trust and elected officials failing to disclose these details properly to the public is unacceptable."
The Project Six investigative report, "Dark Trust: How Chicago’s mayor put city buildings in financial limbo and wasted millions of tax dollars," includes allegations that the Infrastructure Trust project Retrofit One ended up costing millions in interest, according to the report. Initially, the Infrastructure Trust set out to raise more than $200 million from private investors to install energy-efficiency upgrades to approximately 1,000 buildings as part of Retrofit One. However, the project soon was scaled back and a $13.5 million loan was secured from Bank of America to upgrade 60 city-owned buildings.
"Hoping that the worst doesn't happen is irresponsible and no way to run a city program," Kahn said. "Any future infrastructure program should be done transparently and responsibly, to date the Infrastructure Trust has done neither."
The project ended up costing $5 million in interest, $2 million in minor upgrades and $1.4 million in labor and overhead costs, according to the report.
"In theory, the Infrastructure Trust could have been a good idea," Kahn said. "Chicago government should jump at the opportunity to affordably improve our crumbling infrastructure. But city leaders should have abandoned the project when they realized how wasteful and risky it turned out to be. It simply was not a good deal for taxpayers and put too much at risk for minimal gains. A deal like the Infrastructure Trust cannot be allowed to happen again."
Kahn has for years been a bane to Chicago city government, particularly city aldermen. While serving as the city's first, only and last legislative inspector general, Kahn issued a report in 2015 detailing accusations against 29 Chicago aldermen that they'd received $282,000 in illegal campaign donations in 2013, a violation of the city’s ethics ordinance. Chicago City Council soon after eliminated Kahn's job and he turned his files over to FBI and U.S. attorney.
Last June, Kahn re-emerged as CEO of the Project Six, named for the group of civic leaders, "the Secret Six," who took down infamous Chicago gangster Al Capone. Project Six bills itself as a nonprofit, nonpartisan group that investigates and works to end government corruption in Chicago and Illinois. Kahn has said Project Six toes no political or ideological line as it works to fight corruption, ethical lapses and misguided policies in Chicago, Cook County and Illinois.
"At Project Six, we investigate any reports of corruption and waste by elected officials in Chicago and across Illinois," Kahn said in his most recent Chicago City Wire interview. "We’ve got a few investigations that should be coming out in the next few months so follow us on social media and check our website."
Project Six also will continue to keep its eye on Chicago's Infrastructure Trust, Kahn said.
"We will continue to comprehensively review projects undertaken by the Infrastructure Trust to see if what is being done is what was told to taxpayers," he said. 'Any waste, fraud or mismanagement is not acceptable for a program touted as 'revolutionary' by the mayor. Taxpayers deserve the information to hold their elected officials' feet to the proverbial fire to ensure they are acting transparently and responsibly."