CPS Debt: Cha-ching!

Floated quietly on July 4th, the Sun-Times outlines the minefield that is CPS borrowing and its associated fees. In the Spring, CPS sold $478,000,000 in bonds, and the $4,400,000 fee for such borrowing has been spread around to those with ties to mayors past and present.

Chris Fusco has connected all the dots for anyone who cares to see how the connected continue to make money while CPS and the city go broke:

• Law firm Katten Muchin & Rosenman's profit: $300,000. The connected: former Mayor Daley who made pension holidays de rigueur is Of Counsel at the firm, and the firm's attorneys have contributed $61,000 to Emanuel's campaigns since 2010. 

• Law firm Thompson Coburn's profit: $350,000. The connected:  John Cullerton, Mayor Emanuel's bro in the Illinois General Assembly.

• Finance firm Loop Capital Markets profit: $180,000 in underwriting fees. The connected: James Reynolds, Jr., firm founder who's also an Emanuel appointee to World Business Chicago and the Illinois Sports Facilities Authority. World Business Chicago has a sleek website but WCT is unsure of what they do to benefit citizens. IFSA is an ineffectual organization who does things like pay the debt on U.S. Cellular while not collecting the rent.

Going broke has never paid so well, at least for some. WCT thought Mayor Daley's continued profiteering from the mess he created was the big middle finger to the taxpayers, but it turns out the giant middle finger is:

• Finance firm Cabrera Capital Markets: A portion of the $2,300,000 in fees for this year's bond deal, plus half of the $18.1M in fees since 2011.  If the name Cabrera rings a bell it should: Martin Cabrera, Jr. was UNO Charter Schools chairman after the SEC probe of UNO's awarding of construction contracts based on best price nepotism. Cabrera Capital, not coincidentally, was one of the underwriters of the $37.5M in loans UNO received in 2011.

The list of the connected goes on and on. Don't be a-feared, citizens, Emanuel spokesperson Adam Collins reassures readers, "...there is no connection between the awarding of CPS bond work and contributions to the mayor's political fund." Thanks for clearing that up. If City Hall says it, it must be true.

Our political ruling class engages in financial malfeasance as its sole practice, and the constellation of cronies assembled in Chicago is continually enriched thanks to such deals. Meanwhile, Chicagoans are bracing for a slew of taxes ranging from increased property taxes to a tax on the cloud so our ruling elite can remain so.

Happy Independence Day!

"Democracy is when the indigent, and not the men of property, are the rulers." 

-Aristotle

Rahm Skips Chiraq for Aspen

Rahm Emanuel had a busy week: funding CTU's pension, laying off 1,400 CPS employees, and then borrowing $500M back from the pension to pay to keep schools open. Whew! After all of that, one might expect him to keep a low profile, or be around for the 4th of July weekend since in Chiraq it will mean bodies piling up. Nonsense, readers! Rahm jetted right to Aspen to be interviewed at the 2015 Aspen Ideas Festival.

The Aspen Ideas Festival is billed as, "the nation's premier, public gathering place for leaders from around the globe and across many disciplines to engage in deep and inquisitive discussion of the ideas and issues that both shape our lives and challenge our times." People who live on planet Earth have *ideas festivals* all the time and they're called conversations. Aspen's fresh mountain air and spectacular vistas must make it a special place for plutocrats and profiteers of all stripes to exchange trade secrets.

Rahm Emanuel felt the need to announce, "I am not an education reformer. My job as mayor is to make sure you have quality."

Here are some key issues of education reform and Rahm's stance:

School choice: The more, the better. Words like excellence, rigor, and tran$formation are regularly bandied about. Headline after Rahm won his second election: "A victory for Rahm Emanuel is a victory for school choice."

Teacher tenure: It is lazy, complacent teachers who are the ruin of the school system. The Reader's Ben Joravsky points out that CPS has in effect abolished tenure by redefining positions and creating other bureaucratic workarounds to the union contract.

Teachers' Unions: It is union teachers who make it impossible to effectively teach the 21st century student. Chicago's 2012 strike, massive school closings, and teacher layoffs indicate Rahm agrees.

Privatization: The free-market, corporate-driven policies of ed reform will cure all education ills. Rahm and his elected school board recently privatized school nurses who work in our buildings, the janitorial staff in our schools, and have funded a wealth of external partners to come into our schools and indoctrinate staffs in corporate edu-speak.

Rahm fully embraces every tenet of education reform, but he's not a reformer. He's the quality guy. WCT can only guess what the Doublethink Dept. will come up with when, in several months, schools open with an unparalleled level of chaos and a dearth of funds to actually accomplish anything. Will he then say he's the austerity guy?

Ed Reform in Chiraq?

The Illinois Network of Charter Schools glibly states, "We know all children can achieve academic success and have bright futures!"  As actual Chicago public school teachers, we at WCT would, of course, like to believe the same.  CPS has certainly supported INCS's ed reform tran$formation efforts, with $442 million of tax-payer money given to charter schools in 2015.

But will busting unions ed reform really provide bright futures to all children? What are some other factors that get in the way of children's bright futures besides unions lack of charter schools?

Yesterday's Trib published two interesting op-eds on Chicago's violence problem:

• In the first, Robert Milan, Cook County State's Attorney, asks that the National Guard be called in to protect Chicago.  Milan notes that "CPS's regular school year is over and thousands of teenagers are now on the streets."
• In the second, Cook County Commissioner Richard Boykin calls for 1. strict curfew enforcement 2. prosecution of gangbangers as domestic terrorists 3. increased presence of Cook County Sheriff's police 4. an increase in parenting/drug rehab/work training programs.

These op-eds, plus the ongoing debate over Spike Lee's new film, provisionally titled "Chiraq", warrant a review of Chicago crime data:

• A person is shot every: 3.22 hours
• A person is shot and killed every: 19.21 hours

In other words, a Chicago student, parent, cousin, aunt, uncle, grandma, grandpa, brother or sister commits, witnesses, or is the victim of an act of gun violence every 4 hours.  And that's just guns.

So, Illinois Network of Charter Schools and ed reformers everywhere, we ask you:  How are you so sure that all children can have bright futures if only unions are busted and education is privatized?

Perhaps Ken Griffin and his ilk can get moving on some lucrative corporate police reform.

Rahm's Pension Wizardry

As Bozo Show fans from way back, WCT immediately thought of Wizzo the Wizard when we read about Rahm Emanuel's latest pension follies. Wizzo did card tricks, magic tricks, and used sleights of hand to entertain thousands of children. He would do all of this while saying do-di-do-di-do and waving his fingers right before the big payoff. Rahm Emanuel, just a day after funding the Chicago Teachers Pension Fund, directed the city's new CFO to ask for $500M of the $634M back. Now you have it, now you don't. Magic! 

Maybe Rahm and Chicago's CFO Carole Brown were looking at spreadsheets saying, "do-di-do-di-do," as they hit upon the idea to ask for 78% of the pension payment back. Brown called the request a, "big ask." We'd call it another accounting scam, but okay. Brown's wizardry continued as she used words like "cash-flow relief" and "assumed actuarial return." You can almost see her waving her fingers and saying "do-di-do-di-do" to Charles Burbridge, the CTPF's executive director, as she explained the details of her big ask.

In the fine print of Rahm's pension proposals, he suggests combining CTPF with the state's pension fund for more equity. The writers at International Business Times detected a sleight of hand with this change, too: 

What the mayor did not say is that the initiative could end up shifting billions into a fund whose portfolio is run, in part, by Grosvenor Capital and Madison Dearborn Partners, two firms whose executives have together given over $4 million to the mayor's campaigns and affiliated PACs. That includes over $2.7 million from Grosvenor CEO Michael Sacks and his wife, Cari. Sacks has been called Emanuel’s “fixer” and “go-to guy;” he was appointed by Emanuel to serve as vice chairman of World Business Chicago, an economic development group that Emanuel chairs.

The IB Times also notes that, "In fiscal year 2014, Grovesnor collected over $3.2M in fees from the state's Teachers Retirement System, and Madison Dearborn Partners over $370,000." Cha-ching!

Today's 3 part trick is as follows: 1) Take back 78% of a payment you just made, 2) Suggest combining pension funds under the guise of equity, and 3) Make sure to further enrich hedge fund pals and campaign donors in the process. Yes, and don't forget to go full-tilt Wizzo and finish with a flourish and the signature, "do-di-do-di-do" so we know when the trick's over.

Whiners, Swine and ... Beggars

The public's perception of CPS teachers is that we're whiners, pigs and greedy thugs, thanks to the media's effective manipulation and the complexity of our district's financial problems.  However, we at WCT would like the public to know that we are also beggars.

Donors Choose is an online charity where American public and charter teachers can post "classroom project requests," and if they're lucky, their project will be funded.  Funding donations are completely tax-deductible. If you're imagining that teachers are hoping to take students to France or to purchase top-of-the-line microscopes, you're wrong.

Some current requests posted on Donors Choose:

• $264 for ink cartridge replacements, Lindblom Math Science Academy
• $354 for calculators, Sarah E. Goode STEM Academy
• $309 for a carpet, Dawes Elementary School
• $356 for a nurse's office refrigerator, Dawes Elementary School
• $1,230 for projector and screen, Gage Park High School
• $269 for pencils, mechanical sharpener and caddies, James Otis Elementary School

Meanwhile, Heather Y. Anichini, President and CEO of the Chicago Public Education Fund, makes $292,833.00 per year overseeing the Fund's funneling of cash to the usual racketeers, kick-back artists, cronies, and ed reform profiteers.  They claim that their "inve$tment portfolio has improved outcomes for the children they serve."  Right.

Here A Cut, There A Cut

Photo credit: WBEZ

WBEZ posted this memo from CPS to their Twitter feed today.

While WCT does not have the benefit of 9 data strategists at our disposal, here are some "takeaways" (admin-speak for conclusions) from this release:

*Two groups of schools are virtually untouched: magnet schools (save for how students are transported to and from) and selective enrollment schools. How plutocratic that the best resourced schools--like the kind Governor Rauner clouted his kid into--get to stay that way. 

*Neighborhood and elementary schools seem to be disproportionately affected since they often have a greater need for Special Ed services. 

*Newspeak alert: the the Orwellian terms "transform" and "rightsizing" are used to explain how Special Ed services will be delivered.

*Funding has also been cut for turnaround schools--those schools whose entire staff has been fired because of chronically low performance--which is at odds with providing resources to help failing schools improve their performance.

*Hope everyone puts a toolkit and plunger on their back-to-school shopping list as many repairs in buildings will suddenly be D.I.Y. thanks to a 25% reduction in repair and maintenance. What's a botched $260 Aramark contract between friends, especially now that engineers will be shared.

Rahm, ever the steadfast blowhard, says he does not regret his decision to close 50 schools. Clearly. He's making fast moves to put schools into such turmoil, collapse, and chaos that he will get free reign to do just what his buddy Ken Griffin suggested: close 125.