UNO SUSPENDS CONTRACT
Not doing business with brother of CEO
Facing mounting criticism for paying insiders with state construction grant money, the leader of the United Neighborhood Organization said Sunday the charter school network would at least temporarily stop doing business with a brother of UNO’s No. 2 executive.
UNO CEO Juan Rangel said the group will not work with d’Escoto Inc. — owned by a brother of Miguel d’Escoto, UNO’s senior vice president of operations — until after completing an internal review of its contracting practices.
The Chicago Sun-Times reported Feb. 4 that d’Escoto Inc. and other companies with close ties to UNO were paid millions of dollars to help build schools under a $98 million grant approved in 2009 by lawmakers in Springfield and Gov. Pat Quinn.
D’Escoto Inc., owned by Federico “Fred” d’Escoto, has been paid more than $1.5 million so far to serve as the “owner’s representative” for the construction of the UNO schools built with the state money, records show. Miguel d’Escoto’s son also works for d’Escoto Inc.
Public documents show Fred d’Escoto was UNO’s board secretary until stepping down at some point in 2010. The group’s first payment of state grant money to d’Escoto Inc. was made Aug. 31, 2010, according to UNO records obtained under the Freedom of Information Act.
Other contractors hired by UNO and paid with state taxpayer dollars included another d’Escoto brother, Rodrigo d’Escoto; the sister of UNO lobbyist Victor Reyes; and two brothers of state Rep. Edward Acevedo, a Chicago Democrat who had voted to award the $98 million grant.
Rangel’s announcement Sunday came days after his close ally Mayor Rahm Emanuel said UNO must be “held accountable” and as Congressman Luis Gutierrez called for closer scrutiny of UNO’s finances.
Rangel said UNO’s internal re- view would be completed within 45 days, and the group would announce new contracting policies within two months.
“While we are confident UNO has acted legally, we acknowledge that some of our processes are outdated and not at the level required for an organization of our current size and structure,” Rangel said in a statement. “We can do better.”
When he was initially asked about the contracts with UNO insiders, Rangel had said d’Escoto Inc. and the other firms did good work, and he argued that hiring them was in line with UNO’s mission to help grow Hispanic-owned businesses.
The state did not require UNO to use a sealed-bid process to select contractors for the new schools. Gutierrez said he thought UNO should have to use the same competitive-bidding practices as in the construction of other schools and public buildings.
“I was surprised and astonished that there was not better, clearer oversight for the disbursement of these funds,” Gutierrez told the Sun-Times.
A spokeswoman for Quinn — a vocal UNO supporter — has said state officials are reviewing UNO’s grant spending, noting that the agreement with the group included conflict-of-interest restrictions.
The grant to UNO is believed to be the largest government investment in charter schools in the country. It has allowed UNO to finish one school, build two new ones and break ground on a high school on the Southwest Side.
UNO also receives tens of millions of dollars each year from the Chicago Public Schools to run its 13 schools, as well as federal funding for schools with a high percentage of students from poor families. The group’s spending of that money also should be audited, Gutierrez said.
“Every cent must be properly accounted for,” said Gutierrez, a Chicago Democrat. “This has to be about books, computers and teachers — not who your political friends are.”
Gutierrez and Rangel have been on opposite sides of many political battles, including last year’s Democratic primary in a state legislative district on the Southwest Side and south suburbs. In that race, Gutierrez backed Rudy Lozano Jr., who lost to Rangel protégé Silvana Tabares.
Tabares, who took office last month, relied heavily on campaign workers who are UNO employees and received many campaign donations from UNO contractors on the state-funded school projects.