Blagojevich prosecutor Reid Schar leads CHA team investigating bid rigging, Demolish Chicago’s high rise low income housing projects, Minority bidder loses contract employees fired

Blagojevich prosecutor Reid Schar leads CHA team investigating bid rigging, Demolish Chicago’s high rise low income housing projects, Minority bidder loses contract employees fired

“The squat brick buildings of Grove Parc Plaza, in a dense neighborhood that Barack Obama represented for eight years as a state senator, hold 504 apartments subsidized by the federal government for people who can’t afford to live anywhere else.

But it’s not safe to live here.

About 99 of the units are vacant, many rendered uninhabitable by unfixed problems, such as collapsed roofs and fire damage. Mice scamper through the halls. Battered mailboxes hang open. Sewage backs up into kitchen sinks. In 2006, federal inspectors graded the condition of the complex an 11 on a 100-point scale – a score so bad the buildings now face demolition.”

“As a state senator, the presumptive Democratic presidential nominee coauthored an Illinois law creating a new pool of tax credits for developers. As a US senator, he pressed for increased federal subsidies. And as a presidential candidate, he has campaigned on a promise to create an Affordable Housing Trust Fund that could give developers an estimated $500 million a year.

But a Globe review found that thousands of apartments across Chicago that had been built with local, state, and federal subsidies – including several hundred in Obama’s former district – deteriorated so completely that they were no longer habitable.”

“Among those tied to Obama politically, personally, or professionally are:

Valerie Jarrett, a senior adviser to Obama’s presidential campaign and a member of his finance committee. Jarrett is the chief executive of Habitat Co., which managed Grove Parc Plaza from 2001 until this winter and co-managed an even larger subsidized complex in Chicago that was seized by the federal government in 2006, after city inspectors found widespread problems.”

“Antoin “Tony” Rezko, perhaps the most important fund-raiser for Obama’s early political campaigns and a friend who helped the Obamas buy a home in 2005. Rezko’s company used subsidies to rehabilitate more than 1,000 apartments, mostly in and around Obama’s district, then refused to manage the units, leaving the buildings to decay to the point where many no longer were habitable.

Campaign finance records show that six prominent developers – including Jarrett, Davis, and Rezko – collectively contributed more than $175,000 to Obama’s campaigns over the last decade and raised hundreds of thousands more from other donors. Rezko alone raised at least $200,000, by Obama’s own accounting.”…Boston Globe June 27, 2008

From the Chicago SunTimes July 8, 2013.
“CHA brings in Blagojevich prosecutor for probe of $3.9 million deal”
“The former federal prosecutor who sent Gov. Rod Blagojevich to prison is leading a Chicago Housing Authority investigation to determine whether the competitive bidding process for a $3.9 million contract to oversee the construction and rehabilitation of hundreds of taxpayer-subsidized CHA apartments was rigged, sources told the Chicago Sun-Times.

Reid Schar heads a team of 11 attorneys from the law firm Jenner & Block who have been examining contract bids the CHA received earlier this year from a group of companies led by McKissack & McKissack that oversaw the work for the past 10 years, and three other bidders, the sources say.

Soon after Schar, who was the lead prosecutor in the Blagojevich corruption case, began investigating, the CHA fired two longtime employees of the public housing agency who had overseen the McKissack contract for several years, working with McKissack employees out of the CHA’s Loop offices.

McKissack — a minority-owned company from Washington, D.C., that also has offices in Chicago — ended up offering the lowest price in its effort to hold onto the CHA contract, the sources say.

But the housing authority instead gave the job to Gilbane Inc., awarding it a $3.9 million contract at a special board meeting June 28. Gilbane is set to begin work Monday.”
“McKissack was founded in 1990 by Deryl McKissack, an African-American woman whose family has been in the architectural and engineering business for more than 100 years. It has overseen projects across the United States, including expansions of McCormick Place and O’Hare Airport and construction of the Martin Luther King Jr. Memorial in Washington, D.C. McKissack began overseeing the CHA work in 2003. Three years later, she formed a joint venture with two other businesses — the Rise Group and URS Corp. Operating under the name the Partnership for Transformation, the McKissack group won a $16.4 million CHA contract under which it continued to oversee the work. In 2010, the joint venture won a new $9 million contract, extending the deal. That contract expired June 30.

The McKissack group wasn’t initially the low bidder with its proposal to continue overseeing the work beyond that date, according to sources.

They say CHA officials — including the two employees who later were fired — began interviewing representatives from McKissack and the three other bidders. The CHA officials asked the bidders to submit their “best-and-final” offers — a process the CHA repeated twice, ending with McKissack having the lowest bid, according to several sources.”

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