Los Angeles Gets Financial Guarantee | Daley Created Financial Risk

Los Angeles 2016 got their own financial guarantee from the State of California for $250 million.

At first glance, people in Chicago must be wondering "hey, how come we had to come up with $500 million?" and the answer is because Chicago's plans are much more financially risk and have more construction costs. Los Angeles has very little financial risk and that is widely agreed by everyone.

The main problem of Chicago's risk involves the temporary stadium being proposed for a south side park, made necessary by Daley's mistake with Soldier Field. It should be noted this temporary stadium may evolve (and almost definitely will if it is going to have any chance of being slightly appealing to sponsors and the IOC). And, most importantly, this is the solution the City of Chicago (Daley) wants and does not mean it's the best solution possible. Daley can't afford to allow another stadium to co-exist with Soldier Field. The reality is a new Olympic stadium that was state-of-the-art and permanent would risk the viability of Soldier Field.

Allowing Daley to control the Chicago bid process means solutions will be offered that are in his best interest, not the region or USOC or IOC's best interest.

Will the USOC figure that out before April 14th?

Los Angeles 2016 Predicts $7 Billion Economic Impact

The potential economic impact of a 2016 Summer Olympic and Paralympic Games in Los Angeles would top $7 billion according to a study commissioned by the Southern California Committee for the Olympic Games (SCCOG) released today. The results, which would mark a record impact for a U.S. Games, were calculated in 2007 dollars and based on projected attendance, sponsorship programs, transportation and tourism, among other things.

The internationally renowned firm Economics Research Associates (ERA), which conducted the study, stated that the predictions are conservative and accounted only for the Los Angeles region. A Los Angeles 2016 Games would have additional impacts throughout the state and in Nevada.

See the full story inside...

London Costs Continue to Soar | More than Double

London 2012 costs continue to soar and the government has revised its budget to reflect the increase. It went from 4 billion (pounds) to more than 9 billion (pounds).

See inside for more...

Lawyers Seek to Question Daley on Torture Scandals | Daley is Busy on Vacation

We thought this story was particularly interesting considering how "busy" Mayor Richard Daley has been the last two weeks on vacation in places like Ireland while the City of Chicago has had national attention skyrocket for police beatings.

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March 30, 2007
Chicago Tribune

Lawyers for a man Chicago police are alleged to have tortured to get a murder confession filed a motion this week to force the deposition of Mayor Richard Daley in a federal lawsuit.

The motion comes less than three weeks after lawyers for the City of Chicago filed a motion seeking to block Daley's testimony. They argued that requiring the deposition of a "busy public official" was premature and unnecessary.

See more inside...

Los Angeles + Las Vegas = Tourism Clout

According to GamesBids.com:

Organizers of Los Angeles 2016 joined Tuesday with Las Vegas civic leaders to detail the role of the city and Sam Boyd Stadium in its bid to become the U.S. candidate for the 2016 Summer Olympic Games.

Las Vegas and Sam Boyd Stadium would serve as one of the five venues for soccer, with attendance projections calling for 250,000 to 480,000 fans to view the Las Vegas based games. The program would include eight to 12 preliminary round soccer competitions.

Los Angeles 2016 head Barry Sanders said, “Las Vegas is an exciting and glamorous city, and Sam Boyd Stadium has hosted significant soccer matches in the past. The city, Convention and Visitors Authority, and Las Vegas events have been supportive throughout this process and we are very confident Las Vegas will be both a desirable destination and tremendous host for Olympic fans”.

It is anticipated Las Vegas would host both men’s and women’s preliminary matches. Other soccer venues included in the bid are in San Francisco, San Diego and Los Angeles.

Sam Boyd Stadium can now accommodate 32,000 fans but has the ability to expand to 40,000.

Daley Manipulates City Council Races with Cash

For those not familiar with how Chicago politics work, there are various ways to get your way. As mayor, Richard Daley has exerted control over the city council. This time, he's using the method of buying support.

See inside for the Chicago Tribune's story.

Ex-top Daley Aide Pleads in Fraud Charges

While the U.S. Olympic Committee (USOC) may or may not understand the depth of the ongoing corruption investigation into Chicago Mayor Daley's administration, most people in Chicago understand the Feds are climbing up the ladder and its knocking out very close people to the mayor.

Of the almost 50 people who've been indicted and who knows how many other people will be or are under investigation, it's difficult to keep hearing the excuse from Daley that he had no idea that any of these things were happening under an admnistration that he micromanages with extreme control.

So, which is it? Is Daley an incompetent, aloof public official who rambles foolishly or is he slick, corrupt, manipulating public official who rambles foolishly?

While a Chicago Olympic Bid may the greatest idea ever, everyone should be prepared for the real possibility an international bid process could involve a mayor embroiled in corruption charges, not exactly the best face to show the world.

- - -

By Jeff Coen
Chicago Tribune

March 28, 2007, 7:54 PM CDT

Former Streets and Sanitation Commissioner Al Sanchez pleaded not guilty to corruption charges in federal court Wednesday, with his lawyer calling it a "sad day" for the longtime public servant.

Sanchez, a former top aide to Mayor Richard Daley, became the highest-ranking city official to be charged in an ongoing hiring investigation at City Hall when he was indicted last week. He was accused of doling out city jobs in exchange for political work through the Hispanic Democratic Organization (HDO), which backed Daley and other candidates.

Sanchez, 59, pleaded not guilty to nine counts of mail fraud. Also pleading not guilty was Sanchez co-defendant Aaron Del Valle, 34, an HDO organizer and Chicago police officer who was charged with lying to a grand jury that heard evidence in the alleged hiring scheme.

Neither man would comment Wednesday at the Dirksen U.S. Courthouse, speaking only to tell U.S. Magistrate Judge Sidney Schenkier that they understood the proceedings.

Defense lawyer Tom Breen said the former Daley Cabinet member is looking forward to clearing his name.

"He does look forward to a trial where he hopes he will be vindicated," Breen said.

"Many, many people I've spoken to in the last few days thought that Al Sanchez deserved a civic award for the hard work he has done for the city of Chicago over 31 years of service," Breen said. "So this is kind of a sad day for a very fine man."

Breen said that Sanchez's spirits are fine, and that he is trying to keep a good outlook.

"He's disappointed and sorry about all this, but I think he is very hopeful," Breen said.

Assistant U.S. Atty. Manish Shah said in theory, Sanchez could face more than 160 years in prison. Del Valle could be sentenced to as long as 5 years, Shah told the judge.

Both men are free on signature bonds and expected to return to court next month.

The indictments were the first since Daley's former patronage chief, Robert Sorich, was convicted with three other aides last year in a similar job-rigging case.

Prosecutors have said Sanchez rewarded political workers with jobs, promotions, overtime, pay raises and transfers, and that he was involved in falsifying hiring records.

Much Ado About Something

Anytime you can upgrade or invest venues, that can only help. In this case, the Los Angeles bid benefits from the announcement below.

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March 27, 2007
Chicago Tribune

Los Angeles is embarking on an 11th-hour offensive against Chicago, starting with Monday's announcement that sports and entertainment giant AEG is pumping up its backing of L.A.'s bid to host the 2016 Olympics.

AEG said it would spend up to $60 million to enlarge its Home Depot Center, a key competitive venue, if L.A. lands the host-city role.

L.A. is expected to lob two to three more volleys before April 14, when the U.S. Olympic Committee decides which city will move to the international contest, to be decided in 2009.

"We will roll out those [announcements] based on developments between now and April 14," said David Simon, president of the Southern California Committee for the Olympic Games.

The strategy garnered mixed reviews from observers.

"It's an 11th-hour proposal, without any real way to provide documentation about what it all means," said Ed Hula, editor of Around the Rings, an online Olympic news site. "It's all show, more than anything."

But sports industry consultant Marc Ganis thinks otherwise.

"L.A. has set up a script for themselves, and, frankly, it sounds very smart to me," said Ganis, president of Chicago-based Sportscorp Ltd. "They are trying to create momentum, and it shows there will continue to be progress to aid their Olympic bid."

Chicago would do well to inject a new element or two, he said, "if for no other reason than you don't want to let a number of positive announcements from L.A. to go unanswered."

For now, the Chicago 2016 bid committee has no plans for last-minute announcements, said spokesman Michael Kontos. "I'm not going to preclude that, but our decision, from the beginning, was to be upfront with things as we proceeded, as opposed to holding back and packaging information," he said.

The Home Depot Center, built for $150 million in 2003, is in Carson, 13 miles southwest of downtown Los Angeles, and is home to the Los Angeles Galaxy soccer team. It is an official training site for U.S. soccer, tennis, cycling, and track and field and is the proposed site for archery, cycling, soccer and tennis in L.A.'s Olympic plan.

The addition, to be completed by 2013, would include fitness and training space, as well as a 150-room hotel and conference center.

"By accelerating and moving forward with this expansion in conjunction with a Los Angeles Olympic Games, we will open our doors to more organizations from both the United States and abroad as a home for their athletes' training and operations," said Timothy Leiweke, president and chief executive of AEG, which has pledged to promote the bid.

AEG also owns Staples Center, another key venue in L.A.'s plan, and is developing an entertainment and hotel complex next to it.

Meanwhile, London continues to struggle with the issue of cost overruns as it prepares for the 2012 Games.

Two members of that city's legislative assembly, from the main opposition Conservative Party, say the latest government cost estimates -- triple the original bid estimate -- are too low.

Brian Coleman, chairman of the assembly, said "not in a million years" will the Games be run for about $18 billion. He and fellow assembly member Bob Blackman say the cost will be at least $29 billion.

The Department of Culture, Media and Sport said the recently announced budget is "robust" and called the claims that spending will far exceed the budget "pure speculation and scare-mongering."

Much Ado About Nothing

The article below is much ado about nothing. There are certainly several factors that give one city an edge over another, but both Chicago and Los Angeles are great potential Olympic hosts and there are factors beyond the obvious.

The bigger question is whether you go with the experienced and less risky choice of Los Angeles or the Daley-controlled-corruption version of a Chicago bid.

It is our understanding the purpose of the newspaper ads discussed below are to skew polling being done by the U.S. Olympic Committee. Hopefully for Daley's sake, they won't ask the question "do you trust the City of Chicago and Richard Daley?"

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By Kathy Bergen
Chicago Tribune

March 27, 2007, 4:49 PM CDT

The battle between Chicago and Los Angeles to be the U.S. bid city for the 2016 Olympics erupted on several fronts Tuesday.

Chicago was given a slight edge over Los Angeles by Ed Hula, editor of Around the Rings, an online Olympics news site. Chicago scored higher on leaving a lasting legacy, public support, transportation and venue plans, though lower on games costs.

Meanwhile, Los Angeles continued its final-hours offensive, announcing a partnership with the City of Las Vegas and Sam Boyd Stadium, which would serve as one of five venues for soccer.

And the Chicago 2016 bid committee announced a new print ad, with a message of "Welcome to Chicago" in 12 languages, to run Wednesday and Friday in the city's two main daily papers. The message to Chicagoans: "We thought we'd help you prepare to welcome the world . . ."

The ads, created on a pro-bono basis by Downtown Partners, aim to keep the campaign in the public eye and drive traffic to the bid team's Web site.

A decision by the U.S. Olympic Committee is expected April 14, with the winner moving to the international contest, to be decided in 2009.

Opinion | Games Plan Tough to Follow

Chicago Tribune - Opinions
By Dennis Byrne, a Chicago-area writer and consultant

March 26, 2007

Hey, wait a minute. I thought that Mayor Richard M. Daley said holding the 2016 Olympics in Chicago wouldn't cost taxpayers anything.

Now we discover it could cost hundreds of millions. Of course, some cynics might say, Daley made the promise before the election (BE) and now it is after the election (AE) when everything said earlier is off the table. But I don't think the election had anything to do with it. He could have unveiled the complex financing plan the day before the election and who would have cared or understood?

A broken promise isn't the problem with the plan; it's the financing itself, which might be compared to a house of cards, if I understand it correctly. Which I'm not sure I do, but I guess that's the point. Columnists have more fun writing about outgoing Ald. Arenda Troutman's (20th) outrageous comparison of the 2016 Olympics with Adolf Hitler's 1936 version than trying to fathom the details of the Games' financing. You can skip a couple of paragraphs if you're not interested in details and take it for granted that if it involves local politicians, there's something odorous about it. So here goes:

The Metropolitan Pier & Exposition Authority (McPier), a city-state agency controlled by the city, sells the air rights it owns over land south of McCormick Place to a developer who builds walls of apartment buildings for the Olympians that are converted later to commercial housing, and McPier gives the money to the city, which gives it to Chicago 2016, the local Olympic organizing committee that likes to work out of the public view, which uses the money to help fund a temporary Olympic stadium, which later is converted to public use for concerts and so forth, but McPier retains a part ownership in the property, which it then sells outright or leases to an operations manager.

Now, if this and other aspects of the Olympic financing end up in red ink, Chicago must come up with $500 million in guarantees out of the public purse and who knows where else, but the mayor soothingly assures everyone that he remains committed to his promise not to use public money to support the Olympics. After the City Council was briefed privately about these and presumably the other intricacies--and surely, they understood them all--it later overwhelmingly approved the package like good boys and girls.

The public was kept in the dark until the Tribune sniffed it out. When asked later about his pledge that it wouldn't cost taxpayers anything, Daley responded, "we're not putting any actual money in," meaning, I guess, that selling public assets--the air rights--isn't actually putting any actual money into it. Maybe that's technically right, even though city, suburban and state taxpayers no longer own the assets--whose value may have spiked up to $100 million thanks to the Olympics-generated demand, even if Chicago is not awarded the Olympics. It's sort of like not actually putting actual money into the purchase of a new car when you trade in the old. I guess.

All of Daley's great assurances are not comforting when the cost of the 2012 London Olympics has tripled to $18 billion. In the face of this, we are expected to believe that Chicago can pull off the Games for $5 billion. Daley assures us, again, that 2012 and 2016 are not comparable, because Chicago would not be building a lot of new stuff, like London. We've already got the United Center, U.S. Cellular and Wrigley Fields, O'Hare International Airport and so forth, he said. "They had to build all the parks, all the transit," he said, as if the CTA will really impress the Olympic selection committee.

When Daley first suggested getting the Games here, I said the idea should be given a chance to prove itself. So far, the proof we've been allowed to peek at hasn't been all that convincing. But that apparently doesn't matter to the Olympic planners here; they said some secrecy is necessary because we don't want to give anything away to our competitors in Los Angeles.

But there's also some of the public-be-damned way the public's business is conducted here, based on the belief that the public, even if it could understand what's going on, would screw things up. That's too bad; the skepticism that they've already created with this approach hasn't served their cause well, because the project won't get anywhere without public support. At least that's the theory.

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Dennis Byrne is a Chicago-area writer and consultant. http://dennisbyrne.blogspot.com

Chicago Police Scandals Get Worse

See inside for more on this Chicago Tribune story, but aside from the obvious misconduct and mishandling by the Daley regime, we found it interesting to see the tactics being used to intimidate media.

Police spokesman and Daley aide Monique Bond should explain how she's going to magically make parking tickets go away.

2016 Video Games | Los Angeles vs. Chicago

Most experts have given LA the edge for creativity when it comes to the bid videos. The City of Chicago's marketing mayoral aide in charge of hiding the financial guarantee guy and gay activist, Michael Segobiano, said the Chicago video is an example of great we would be at staging the games. We hope he's wrong. The video could be much better and the city needs to find a much better marketing guy regardless of the Olympic bid.

Los Angeles 2016 Video (40 sec)



Chicago 2016 Video (3 min, 41 sec)



Los Angeles 2016 Video (Dave Stewart, 7 min, 35 sec)

City Council Video Excerpt | Don't Show This to the USOC!

At the Chicago City Council meeting to discuss the "sudden" $500 million financial guarantee the Daley administration pretended to be surprised about, there were voices of protest, but the public wasn't allowed to speak. Whether or not you agree with the financial guarantee issue, the protesters may have a point that the public has never had an opportunity to speak on the issue.

Please don't tell anyone about this video (and this is just a small version and not the major fireworks). City of Chicago officials don't want the USOC or IOC to know there are people unhappy with the way this process has been handled by Daley, even among those who want the Olympic Games to come to Chicago.

2 minutes, 12 seconds

Chicago's Transit System On the Brink Under Daley Management

The enclosed New York Times article should be a very important wake-up call to the U.S. Olympic Committee (USOC) before they proceed with a bid that has Mayor Richard Daley and the City of Chicago in control.

Transportation is CRITICAL to stage the Olympic Games anywhere. Chicago's system is crumbling and on the brink of serious crisis, but because of Daley leveraging the idea of having "compact venues" and "close proximity" to avoid as much as possible to share control or the Olympic Games with the metropolitan area, it makes the City of Chicago's transportation system that much more important to how an Olympic Games would function.

If the track record of the Daley regime is any indication, the CTA is a failure of economic, transport and practical proportions. Using the Olympic Games to lure federal funding to bailout the mismanagement of the Daley regime is a nice idea...IF we could be assured the control over the transit system would be removed from the City and instead given to a regional entity like the RTA.

There is legislation being propsed to do exactly that...unify the transporation agencies for the region, but that would mean less control by Daley's cronies. It would be foolish, if not irresponsible, to continue to allow the CTA to exist as a City of Chicago controlled entity. Not just for the Olympic Games, but unifying transportation agencies in a regional and metropolitan manner is a much smarter way to go considering approximately 8 million people will live in the Chicago area in 2016, not including the 2.5 million who live INSIDE the city limits or the potential visitors that would be spread all over.

SEE INSIDE FOR NEW YORK TIMES ARTICLE ON THE CRUMBLING CHICAGO TRANSIT SYSTEM UNDER RICHARD DALEY

Other Resources:

>RTA

>State Auditor's Report on Transit

>CTA Tattler (blog)

Police Brutality Under Daley | Can't Have This Type of Thing in Chicago

The protesters that voiced concern about how the Daley regime has looked the other way about police torture and brutality cases may have a point based upon the recent bar beating incident of a woman by a Chicago cop, but now we learn there's another major incident that was kept quiet back in December.

Monique Bond, spokesperson and aide to Daley, says whatever it takes for these stories to be diminished or go away, but when there is a video, it's pretty hard to ignore. If we want to bring the Olympic Games to Chicago, we need to address these type of things seriously and not pretend they don't exist.

Chicago Tribune | Another Daley Aide Indicted By Feds

EX-DALEY AIDE INDICTED BY FEDS

Chicago Tribune Staff Reports
March 22, 2007, 2:39 PM CDT

The U.S. attorney's office announced today that a federal grand jury has indicted former Chicago Streets and Sanitation Commissioner Al Sanchez on nine counts of mail fraud.

Sanchez, 59, was not only a former top aide to Mayor Richard Daley but was also a key leader in the mayor's Hispanic Democratic Organization (HDO).

The charges against Sanchez come amid a continuing investigation of hiring and promotion practices at City Hall.

Also indicted was Aaron DelValle, who once worked for Sanchez in Streets and Sanitation. DelValle, 34, was charged with one count of perjury for allegedly lying to a federal grand jury.

In return for his cooperation with investigators, DelValle received immunity from most of the charges under consideration, but was indicted on one count of perjury, prosecutors said.

Both men will be arraigned at a later date, the U.S. attorney's office said.

U.S. Atty. Patrick Fitzgerald said Sanchez rigged jobs to reward political workers and DelValle lied to authorities about assisting Sanchez. Sanchez "corrupted the hiring process on behalf of HDO," Fitzgerald said.

According to the U.S. attorney's office, Sanchez engaged in a systematic scheme to provide city jobs, promotions and other employment benefits as rewards for political campaign work for his organization.

Sanchez was HDO's Southeast Side leader. During the hiring trial last summer that resulted in the conviction of Daley's former patronage chief, prosecutors described Sanchez as a co-schemer in an ongoing hiring fraud scheme.

The son of a hot metal conductor at a steel plant, Sanchez sponsored many of his fellow East Siders for well-paying, blue-collar city jobs, according to court records.

Sanchez used to preside over HDO meetings in a banquet hall in the neighhborhood spanned by the Chicago Skyway toll bridge. Federal agents scoured the neighborhood last fall, questioning people about HDO.

Earlier this month, HDO members who work in Streets and Sanitation charged in a federal lawsuit they were demoted or passed over for promotion because another group now has the clout. Pablo Delapaz, Michael Sarkauskas and Joseph Nasella claim they were punished after Sanchez retired as commissioner of the department in 2005.

HDO members were mentioned at the corruption trial of Daley's patronage chief Robert Sorich as the recipients of city jobs for their political work on behalf of pro-Daley candidates.

The Associated Press contributed.

King Daley Forced to Issue Order Banning Patronage

City agrees to ban patronage

$12 million fund would pay victims of job bias

By Dan Mihalopoulos and Todd Lighty, Tribune staff reporters; Tribune staff reporter Mickey Ciokajlo contributed to this report

Chicago Tribune
March 22, 2007

Mayor Richard Daley's administration agreed Wednesday to a settlement that would end court oversight of City Hall hiring and pay millions of dollars to people who lost out because they didn't have the right political connections.

Daley had long sought to end the decades-old federal consent decrees that ban politics from most city personnel decisions, even after aides in his office were convicted last year of rigging hiring to favor pro-Daley political workers.

A court-appointed monitor will continue to help regulate city hiring for two more years. But after June 1, the city's inspector general--appointed by the mayor--will investigate complaints of politically based hiring, firing and promotions, according to the settlement announced in federal court.

The settlement, which requires City Council approval, calls for the mayor to issue an executive order against political hiring.

Michael Shakman, whose lawsuit led to the anti-patronage decrees, said the settlement could end his long legal fight--if City Hall is acting in good faith.

"The mayor has an opportunity here," Shakman said. "He's either going to be remembered by history as the mayor who presided over the last big-city clout machine or the mayor who fixed it. This gives him a chance to fix it."

The city will create a $12 million account for people who claim they have been discriminated against because they lacked clout to get a job, promotion, transfer or overtime. Shakman said he expects thousands to apply for damage awards of as much as $100,000 each.

While Shakman, city officials and the judge in the case hailed the accord as a landmark moment for local political ethics, this is not the first time that the city has vowed to root out the traditional political-machine practice of rewarding allies with jobs.

Some declared patronage dead more than 20 years ago, when Mayor Harold Washington signed the Shakman decree against political hiring. The federal investigation of corruption in the Daley administration shattered that illusion.

Though the Daley administration said it hired based on qualifications alone, federal prosecutors say officials in the mayor's office engaged in a "massive fraud" to get around the Shakman restrictions and enhance the mayor's political power.

The criminal hiring investigation yielded guilty verdicts last year against four former Daley administration officials, including longtime mayoral patronage chief Robert Sorich.

`It's a new day'

Mara Georges, the Daley administration's top lawyer, for years swore in court that the city was abiding by the hiring restrictions. After Wednesday's court hearing, Georges said the agreement would allow Daley "to demonstrate that he is truly committed to reform."

And Daley's chief of staff, Ron Huberman, said skeptics should know that "it's a new day."

The agreement was announced as Daley was traveling in Europe with local business leaders. He has denied any knowledge of wrongdoing in city hiring.

When the hiring scandal broke in 2005, Shakman's lawyers asked U.S. District Judge Wayne Andersen to hold the city and Daley in contempt of the federal hiring decrees. The city had tried to void the decrees, saying they were no longer needed.

The proposed settlement ends Shakman's quest to hold the city and Daley in contempt of the court orders.

The city and the mayor do not admit violating the Shakman decree but decided to settle "solely for the purpose of avoiding prolonged and expensive litigation and the drain on the city's resources and employees' time and energy," according to the settlement.

The city has paid $1.65 million to the monitor, Noelle Brennan, and her lawyers since Andersen appointed her less than two years ago, city officials said.

Brennan will remain to assess claims and approve damage payments for people who can demonstrate they were harmed since Jan. 1, 2000. The claim form will be available at www.shakmanmonitor.com.

Shakman said he and his lawyers would submit bills to the city for their work on the case over 20 years. He estimated the sum would exceed $2 million.

The city also agreed to pay $25,000 each to six current and former city workers who in 2005 joined Shakman's suit as plaintiffs. The workers alleged that their careers in Daley's administration suffered because they lacked the right connections to pro-Daley political organizations. The six workers from the Streets and Sanitation and Water Management Departments could still seek additional money from the $12 million fund.

Under the settlement, most of the nearly 40,000 spots on the City Hall payroll would have to be filled without regard to politics, with about 800 exceptions for policymaking positions.

Under the mayor's order, city employees would have a duty to report political job discrimination to the city inspector general, and they would get protection against retaliation for pointing out problems.

Inspector General David Hoffman would investigate and could recommend potential discipline or file criminal charges.

"This is an important milestone in creating a system of integrity," said Hoffman, appointed by Daley to a four-year term in 2005. "Given the proper resources, we will be able to become a strong, independent watchdog."

Brennan said City Hall eventually would have "an independent system that's within the city."

"We will all see what happens when we go away, but I am optimistic that things really are changing within the city."

In December, Brennan reported that the Daley administration was making strong progress in reforming hiring. Yet she also said she had encountered "pockets of resistance in the city, primarily from those individuals who benefited from the patronage system."

If the city convinces the court that it is in "substantial compliance" with the agreement, the Shakman decree would expire on Dec. 31, 2008.

More than 35-year battle

Shakman has fought City Hall over patronage since 1969, when Daley's father was mayor. As a candidate for the state Constitutional Convention, he said he had no chance against armies of patronage workers loyal to the Cook County Democratic Party.

The party's power withered over time, only for Daley's political organization to supplant it after he became mayor in 1989. Under Daley, the Democratic ward organizations that traditionally dispensed jobs to political workers became less significant.

Witnesses in the Sorich trial detailed how Daley aides instead funneled patronage through new pro-Daley groups such as the Hispanic Democratic Organization.

Regardless of the settlement in Shakman's civil case, it appears unlikely that the criminal investigation of hiring fraud is over. After Sorich's conviction, prosecutors warned they would pursue higher-ups in the Daley administration who participated in the scheme.

In the courtroom Wednesday, two prosecutors who have probed City Hall corruption observed the proceedings from the back row. Assistant U.S. Attys. Philip Guentert and Manish Shah declined to comment.

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dmihalopoulos@tribune.com | tlighty@tribune.com

Chicago Tribune Editorial | Toward an Honest City Hall

TOWARD AN HONEST CITY HALL

Chicago Tribune Editorial
March 22, 2007

Wednesday's agreement on a new protocol for enforcing rules against illicit patronage hiring and promotion at City Hall is an upbeat chapter in a decades-long legal drama. We could fill this page and many others with all of the background.

Or we could cut to the chase scene: No longer should federal prosecutors and FBI agents have to be the de facto enforcers of Shakman-decree rules and a host of laws meant to guarantee fairness in city employment. Instead, as of May 31 (barring the unexpected), that job will fall to the city's inspector general.

That makes sense, as this page argued last summer after the corruption convictions of four former City Hall officials. The current inspector general, former federal prosecutor David Hoffman, may not relish the idea of adding oversight of hiring to his anti-corruption duties. But with a beefed-up staff of 40 investigators, an aggressive focus on more substantial cases and protocols for seeing that wrongdoers get punished, his team is ideally equipped to do what the city administration hasn't: eradicate the widely held assumption that when the city hires or promotes, the fix is in.

Owing to City Hall's serial failures to halt illegal employment practices, a federal monitor is now responsible for city hiring--and also for probing alleged violations. She'll continue to oversee the former for two years, but investigation and enforcement now will shift to the IG.

It's crucial that future oversight not drift back to any of the politicized city departments that report to the mayor. Neither Mayor Richard Daley nor his successors should be monitoring their own compliance with rules intended to guarantee fairness to job applicants and employees seeking promotion.

Mayors, of course, appoint inspectors general, so the potential for mischief remains. But barring a permanent federal takeover of employment at Streets and San, the IG is likeliest to police employment with genuine independence. The inspector general has a four-year term, works from office space outside City Hall--and can only be fired "for cause" by a majority vote of the City Council. After years of relative inaction, the office is building a no-nonsense reputation: Last week, for the first time, federal criminal charges were brought on the basis of a joint IG-federal investigation, as six defendants were charged with accepting bribes to subvert building-safety rules.

Prior to Wednesday, Daley had long fought to void Shakman regulation of patronage hiring. Now he has agreed to issue an executive order intended to keep politics out of personnel decisions. The IG's job is to make that stick.

The settlement creates a $12 million fund for people who allege that they were victimized by the unfairness that has tarred City Hall. And the IG's office likely will need more staff if it's to handle all future employment complaints on top of its current busy workload.

Chicago will be a long time paying for the shabby practices that cheated many good people out of jobs or promotions they deserved. The hope here is that Wednesday's settlement keeps that from occurring again.

Protesters Welcome USOC Visit

Protesters greeted the USOC visitors outside the Chicago Hilton & Towers before they boarded a bus for a venue tour as part of the USOC's recent visit. Daley has a track record of looking the other way on police torture, so that appears to be part of the motivation behind these protests.

about six minutes long

Daley Disregards London 2012's Soaring Costs

Daley Unfazed by London's Swelling Olympics Tab

Chicago Mayor Richard Daley is assuring taxpayers that his budget estimate for the Olympics contains no surprises. London's Olympics budget ballooned to three times the original estimate today.

The 2012 games will now cost $18 billion. The mayor says Chicago's plan involves less new construction and more temporary facilities.

Daley: We're not building McCormick Place, we're not building Soldier Field, we're not building Wrigley Field, we're not building United Center, we're not building Cellular Field.

Daley has come under fire for having the city pledge half-a-billion dollars in case of a budget overrun. Previously, the mayor promised taxpayers not to use public money to fund the games.

Producer: City Room, Chicago Public Radio

Release date: 3/15/2007

Alderman O'Connor Warns About USOC Finding Out About Acrimony | Oh, Can't Have That!

Chicago's 40th Ward Alderman O'Connor warned at Wednesday's City Council meeting the USOC and Olympic officials might find out about all the "acrimony" in the debate that is not reflected in the 45-5 vote.

It could be worse. They could find out voices of the public protest were thrown out of the city council chambers and no public hearing has been allowed.

They could find out the Mayor and his aides have been lying and misleading the city council, public, media and (gasp!), they might start to figure out the USOC has been a victim, too.

Hopefully, they also don't know about all the massive corruption scandals brewing under Daley and or how he cost taxpayers more than a billion dollars with his Soldier Field mistake to benefit the Chicago Bears, including co-owner Patrick Ryan (just a coincidence, of course).

Chicago Sun-Times | Secrecy Must Stop

Get Olympics planning out in the open

Chicago Sun-Times Editorial
March 15, 2007

Mayor Daley repeatedly promised no public money would be spent if Chicago were picked to host the 2016 Summer Olympics. That pledge is no doubt a key reason why many people have gone along with the city's bid -- if it's not going to cost us anything, why not go along? But it's probably fair to say that many others supported the idea even though they were skeptical about the pledge -- and two recent developments appear to confirm that that skepticism was well-grounded.

The first was the news last week from an Olympic scout team that was in Chicago to study the city's bid. That team insisted that Chicago "put some skin in the game" with some form of government guarantee against operating cost overruns. The city responded by presenting a layered guarantee that would put other entities on the hook before $500 million in city reserves were tapped. Daley said the guarantee doesn't break his pledge because the city isn't "putting any actual money up" unless an unprecedented financial disaster happens. Mayoral aides said the chances that the $500 million pool will be tapped are "practically nonexistent." Fair enough. But Daley and his Olympic boosters could have saved themselves a lot of aggravation if they had come clean about the need for a guarantee from the city from the start.

The second development, however, is a little less easy to explain away. The city's Olympic team last week said the Metropolitan Pier & Exposition Authority would sell air rights at the site of the proposed Olympic Village near McCormick Place and use the proceeds -- about $100 million -- to help pay for a temporary Olympic stadium in Washington Park on the South Side and a permanent aquatic center in Douglas Park on the West Side. No matter how you cut it, those are public dollars that would be spent on the Olympics, dollars that might instead be put to some other public use. And the decision to spend them was made in the shroud of secrecy that has surrounded Olympic planning to date.

Chicago is competing against Los Angeles for the right to be the U.S. candidate in the international race for the 2016 games. The U.S. Olympic Committee is scheduled to make its choice next month, with the global race to be settled in 2009. We've argued that Chicago should be picked because it would put our city on display to the rest of the world and provide us with a golden opportunity to invest in our infrastructure. We still emphatically support the city's bid -- and we'd guess most Chicagoans still support it as well -- even though public money was officially committed by the City Council on Wednesday. But the time for secrecy is over. Let's bring the planning process into the open so we know, to the greatest degree possible, what we're getting into.

Chicago Tribune Editorial | Olympic Faith and Facts

Chicago Tribune Editorial
March 15, 2007

Chicago aldermen signed on Wednesday to a $500 million guarantee for the 2016 Olympic Games on behalf of city taxpayers. If they were worried about such a large commitment, it wasn't reflected in the vote. It passed 45-5.

There is a financial risk in that commitment, even if city officials say it is slim. There is also a risk that the lopsided council vote will encourage the Daley administration to think it can continue to pat the aldermen on the head and tell them not to worry about Olympics spending, it will all work out.

The city promises to pay up to $500 million in the event the experts' rosy projections of a spectacular 2016 Summer Games in Chicago implode. That's the equivalent of nearly 10 percent of the 2007 city budget. It's about what the city collected in sales taxes last year.

That public commitment demands that Mayor Richard M. Daley and the Chicago 2016 committee be much more transparent than they've been about how this massive project will be financed. Taxpayers shouldn't be continually surprised and chagrined that the mayor and the organizers have told them one thing and done another.

It looks like they have done just that again. The Tribune reported Wednesday that the Metropolitan Pier & Exposition Authority will sell air rights over the land where the Olympic Village would be built and hand the proceeds to the Olympic project. That amounts to a government infusion of $100 million to $125 million into the Olympics--though Daley said government wouldn't be bankrolling this project.

The Olympic Village site, which would leave the city with permanent housing on the Near South Side, seems to make sense. But the air rights deal was made in January and not revealed to aldermen until last Friday--and not revealed to taxpayers until the Tribune reported it.

That kind of secrecy has to stop. It's time for the city and the Chicago 2016 committee to put all their financial projections and planning in the open--now, not after the site for the 2016 Games is sealed in April.

The Chicago 2016 committee projects a $525 million surplus from the Games. The committee calls that a conservative estimate, based on revenue streams from past Olympics--ticket sales, television rights, corporate sponsorships and the like. But we're being asked to accept largely on faith that this is conservative planning, because only scant details about revenues and costs have been produced.

We do know some details. If the Games lose money, the first $200 million in losses would be covered by revenues generated by skyboxes and suites at major venues, including the new temporary stadium at Washington Park; money from the developer of the Olympic Village; and other private donations.

The city would be liable for the next $250 million in losses. The $250 million after that would be covered by unspecified private sources and other government entities.

And if things got even worse, the city would be liable for up to another $250 million. At this point, Chicago 2016 would have gone in the record books as losing nearly $1 billion.

Yes, that's a doomsday scenario. It's reassuring that the 2002 Winter Olympics took place in Salt Lake City just six months after the Sept. 11, 2001, terrorist attacks, and did not lose money. The 1996 Games in Atlanta were jarred by a bombing, but didn't lose money. There's good reason to believe Chicago can run a spectacular Olympics and wind up in the black.

Just don't hide the facts.

Chicago Tribune | $500 Million Guarantee While $15 Million Taxpayer Funds Quietly Slipped for Aquatic Center

By Mickey Ciokajlo, Tribune staff reporter. Tribune staff reporter Noreen Ahmed-Ullah contributed to this report

March 15, 2007

The City Council on Wednesday overwhelmingly approved a $500 million guarantee to back up Chicago's Olympics bid, despite skepticism from some aldermen about the Daley administration's plan.

Later in the day, the Chicago Park District voted to reserve $15 million in revenue to help pay for an aquatic center to be built if the city wins the 2016 Games.

As the city took some of the first official steps toward committing public funds for the Olympics, Mayor Richard Daley sought to stem concerns that there was not enough public discussion about the plans developed by the private Chicago 2016 committee working with his administration.

"Even if the U.S. Olympic Committee selects you, this is not a done deal," Daley said. "This is just the beginning. We're in batting practice. We haven't even stepped up to the plate yet.

"There's going to be a lot of conversation, a lot of talk, a lot of improvements in regards to the whole process."

Five South Side aldermen voted against the plan to provide up to $500 million in city funds if the Games lose money, saying they couldn't risk taxpayers being on the hook even if they supported the idea of Chicago hosting the Olympics.

Ald. Toni Preckwinkle (4th) said she was troubled that the need for a city guarantee was not disclosed until after last month's city election. Explaining her "no" vote, she said the timing of the disclosure made her doubt whether she could trust the financial projections for the Olympics.

"Ironically, the same people who didn't want to tell us that this guarantee would be required want us now to trust them that the possibility of having to use these guarantees is very, very, very remote," Preckwinkle said. "The funny thing is I think you could make a case--if people were more honest--you could make a case that even if the city has to make these guarantees to get the Olympics, it's worth it."

Despite the reservations, the aldermen voted 45-5 in favor of the proposal, with many saying the Games would provide lasting economic benefits for the city, such as new housing and the aquatic center.

"It is those residuals that is really the bottom line and makes the Olympic 2016 a valuable asset to the city of Chicago," said Bernard Stone (50th).

The United States Olympic Committee is expected to choose April 14 whether Chicago or Los Angeles will be sent to the international competition, from which the ultimate site for the Games will be picked in 2009.

Daley for months had said that Chicago taxpayers' money would not be used to host the Olympics and has embarked, with the help of a local business leaders, on an aggressive fundraising campaign.

But last week an official with the USOC said the committee expects the city to put "some skin," or financial backing, on the line as part of its bid. Daley's team began meeting with aldermen on Friday about a plan to provide a $500 million layered city guarantee.

The city has not fully explained how it will come up with the money, and Daley and his finance team have downplayed the likelihood that it would ever be tapped. They stress that they expect the Games to generate a $525 million surplus.

"Consider it like an insurance policy," Daley said Wednesday. "If everything fails--earthquake, tornado, everything comes down--this is your insurance policy."

Asked if there were any additional guarantees required beyond the $500 million, Daley said "No, I don't think so."

Joining Preckwinkle in voting against the guarantee were Ald. Dorothy Tillman (3rd), Shirley Coleman (16th), Arenda Troutman (20th) and Howard Brookins Jr. (21st).

"I don't think that there is anybody in this body ... hoping that these Olympics won't come to Chicago," Brookins said. "But as I stand here, I have to be a voice of quiet reflection saying this thing may not work, we may be stuck."

Three of the five African-American aldermen who dissented are facing challengers in the April 17 runoff election. A small group of African-American protesters occasionally disrupted the council meeting, arguing that the Olympics could force the dislocation of poor residents and destroy Washington Park where the Olympic stadium is planned.

With the protesters voicing support, Troutman called the Olympic proposal a "blatant land grab" and started her criticism by saying the Nazis purged slums in preparation for the 1936 Games.

"I am still the voice of the people," said Troutman, who lost in last month's election and faces federal charges for allegedly accepting bribes.

Sun-Times | Council OKs 'Insurance Policy'

Council OKs Games 'insurance policy'
(http://www.suntimes.com/news/metro/298302,CST-NWS-oly15.article)

March 15, 2007

Chicago Sun-Times
Fran Spielman City Hall Reporter

In a historic vote that could reshape Chicago or leave taxpayers deeply in debt, the City Council took a $500 million gamble Wednesday that a 2016 Summer Olympic Games here would turn a profit.

"If everything fails -- an earthquake, tornado, everything comes down -- this is your insurance policy," Mayor Daley said, insisting the $500 million guarantee will never be tapped.

Beating a U.S. Olympic Committee deadline with 17 days to spare, aldermen also voted 45-5 to approve intergovernmental agreements that put local tax dollars on the line for the Olympics, even if there's a surplus.

Among other things, the Metropolitan Pier and Exposition Authority would transfer to the city ownership of air rights over a truck staging area for McCormick Place that would be used to build a $1.1 billion Olympic Village.

'Price controls' to be sought

Corporation Counsel Mara Georges disclosed last week that the air rights would be sold to private developers for $100 million. Half would be used to build an amphitheater to be left behind when a temporary Olympic stadium in Washington Park is torn down. The other half would help build an aquatic center in Douglas Park. The Chicago Park District has also agreed to contribute $15 million toward the aquatic center.

So much for Daley's promise to bankroll a Chicago Olympics with "not a dime" of taxpayers' money.

The mayor has also agreed to seek state and city legislation no later than June 30, 2014, to implement "price controls" that would apply to hotels and other "spectator-oriented businesses" before and during the Games.

All five votes against the Olympics were cast by African-American aldermen who feel shut out of the Olympic planning -- and fear constituents would not share in the jobs and contracts.

They are Dorothy Tillman (3rd), Toni Preckwinkle (4th), Shirley Coleman (16th), Arenda Troutman (20th) and Howard Brookins (21st).

Troutman, who lost her re-election bid under the cloud of corruption charges, called the Olympics a "blatant land grab" and warned that "undesirables" would be moved out to polish the city's image.

'How committed is Chicago?'

Preckwinkle blasted Daley for waiting until after the election to come clean about the cost. "It's very hard to believe that no one in the city knew prior to the election that we were going to be required to put up $500 million."

Finance Committee Chairman Edward M. Burke (14th) said the Olympics "will alter our urban terrain forever."

Several times during the 1-hour 16-minute debate, there were shouts from the gallery and banging on the glass that separates the balcony from the chamber. But only a handful of people were escorted out.

Ald. Pat O'Connor (40th) warned that the "acrimony" of Wednesday's debate could make the USOC wonder, "How committed is Chicago?"

The guarantee assumes a Chicago Olympics would turn a $525 million profit and that -- even if it lost money -- a $200 million private sector cushion provided by Olympic Village equity and the sale of stadium skyboxes would shield taxpayers.

Sun-Times | More Daley Administration Bribery

Buildings project manager arrested, charged with bribery

(http://www.suntimes.com/news/metro/298650,bribe031507.article)

March 15, 2007
Chicago Sun-Times
Fran Spielman City Hall Reporter

An $85,308-a-year project manager in the city of Chicago’s Department of Buildings was arrested Wednesday night and charged with bribery, in a growing investigation into shakedowns in the two city agencies that are supposed to make sure buildings are safe.

Kurt Berger’s arrest came one day after the city inspector general’s office and agents working for the U.S. Postal Inspection Service raided the City Hall offices of the Department of Construction and Permits and left with computers and scores of documents.

On the same day that Inspector General David Hoffman led that raid, an electrical inspector assigned to Construction and Permits was charged with accepting $16,000 in bribes. In exchange for a pair of $8,000 cash payments allegedly stuffed in Wendy’s bags, Daryl Williams is accused of looking the other way while a contractor added residential units to an extensive remodeling project without obtaining the required zoning change or building permits.

The investigation against Williams was reportedly aided by a building inspector who was similarly accused but won’t be prosecuted in exchange for his undercover cooperation.

Berger’s arrest marks the latest in a series of scandals for the two city departments charged with guaranteeing building safety in Chicago.

Two years ago, a residential permit was issued in a planned manufacturing district to a developer who took then-Building Commissioner Stan Kaderbek’s top deputy no a spring break trip to Brazil.

The department also was at the center of the city hiring scandal for its role in hiring the 19- and 23-year-old sons of Carpenters Union officials as building inspectors. And another building inspector was accused of falsifying a report on a building where a porch railing snapped, killing a 9-year-old girl.

The Buildings Department has been without a permanent commissioner since December, after the resignation of John Knight. City Hall sources called Knight a bad fit from Day One.

Behind the Bid Note: Aside from the obvious chronic corruption under Daley, isn't building safety somewhat important for the Olympic Games?

Chicago Tribune | Harbor May Be Opened for Out-of-Town Boaters

By Noreen S. Ahmed-Ullah
Tribune staff reporter

March 15, 2007

The Chicago Park District hopes to create a harbor for boaters looking for a temporary place to park their watercraft near downtown.

On Wednesday, park district commissioners agreed to swap man-made structures with the city of Chicago to create the harbor on a stretch of land commonly known as Dime Pier.

The park district will hand over a concrete structure near DuSable Harbor so the city can create a helipad for first responders to emergencies. In exchange, the park agency will get Dime Pier, which runs parallel to the south side of Navy Pier. Park officials hope the pier can add 350 to 450 slips.

The harbor will be used by people from other harbors or out-of-town visitors who want to dock for the day, officials said.

It was one of the recommendations suggested by a review of the park district's harbor system.

"Right now, there is no harbor for people visiting from Wisconsin or Michigan to just come and moor their boat," parks Supt. Tim Mitchell said. "This gives them the opportunity to bring their boat down, go to Navy Pier for the day, go to the museums, go out for dinner and then get on their boat to go home."

If the Olympics are held in Chicago in 2016, the harbor would also be used to moor boats from Monroe Harbor, which is being proposed for Olympic events, Mitchell said.

Crain's | McPier Funding

McPier plans to help fund bid for Olympics: report

Crain's Chicago Business
March 14, 2007

(AP) — The government entity that controls Chicago's McCormick Place would help fund the city's 2016 Olympic Games bid with the sale of public assets near the convention complex, according to a published report.

The proceeds would come from the sale of air rights above land near McCormick Place, the Chicago Tribune reported Wednesday.

The city and the state run the Metropolitan Pier and Exposition Authority, known as "McPier," which oversees McCormick Place and Navy Pier. McPier also owns land and air space south of the convention center and along the south shore of Lake Michigan.

"We're committing our resources, which is the value of the air rights, to be used to support the Olympic effort," said Theodore Tetzlaff, chairman of McPier. "There's real value there that can be used, that we're prepared to commit to use, to make the Olympics happen."

The Tribune, citing unnamed sources, reported that potential investors have said in writing they would pay at least $100 million for the air rights, although the package's total value could rise to $125 million. The money would be used to help fund Olympic construction, the Tribune reported.

A McPier spokesman said Wednesday morning that the agency would comment on the situation later in the day.

The $125 million would be an important part of the financial plan for the Chicago games.

The City Council is scheduled to vote Wednesday on Chicago Mayor Richard Daley's request to put Chicago on the hook for up to $500 million if the games' operating budget lost money. Daley previously said no taxpayer money would be used for the Olympics.

The city has outlined a five-layer structure of financial guarantees to submit to the United States Olympic Committee. One of the guarantees, estimated by an organizing committee, is a budget surplus of $525 million.

Dana Levenson, the city's chief financial officer, has said the chance of city money being tapped is "practically nonexistent."

A message left at Daley's office was not immediately returned Wednesday morning.

The city is competing with Los Angeles to bid for the 2016 Summer Olympics; the United States Olympic Committee is to announce its choice April 14. The International Olympic Committee won't pick a host city until 2009; other bidders are expected to include Madrid, Rio de Janeiro, Rome and Tokyo.

Chicago has unveiled its plans to build a $366-million, 80,000-seat temporary stadium in a South Side park and a $1.1-billion lakefront athletes' village.

There has been no study on the value of the air rights. Also, there's no guarantee that the proceeds would have a value equal to $125 million needed for the Chicago games, said Renee Benjamin, general counsel for McPier.

Sun-Times | Aldermen OK Olympic Funding

Chicago Sun-Times
March 14, 2007

BY FRAN SPIELMAN City Hall Reporter

The City Council today kept Mayor Daley’s Olympic dream alive by putting Chicago taxpayers at risk — to the tune of $500 million — in the event that a 2016 Summer Games here loses money.

Beating a U.S. Olympic Committee deadline with 17 days to spare, aldermen also approved a series of intergovernmental agreements that put local tax dollars on the line, even if the games turn a profit.

The vote was 45 to 5.

Among other things, the agreements require the Metropolitan Pier and Exposition Authority to transfer to the city ownership of air rights over a truck staging area for McCormick Place that will be used to build a $1.1 billion Olympic Village.

Corporation Counsel Mara Georges disclosed last week that the air rights would be transferred to the Olympic organizing committee known as Chicago 2016 and sold to private developers for $100 million.

Half of that money will be used to build the 5,000- to 15,000-seat amphitheater that will be left behind in Washington Park after a temporary Olympic stadium there is torn down. The other half will be used to build an aquatic center in Douglas Park. The Chicago Park District has also agreed to contribute $15 million toward the aquatic center it will inherit.

So much for Daley’s promise to bankroll a Chicago Olympics with “not a dime” of taxpayers’ money.

The mayor has likened the $500 million guarantee from Chicago taxpayers to earthquake insurance.

The city would be left holding the bag, only if Olympic planners are dead wrong in, what they call their “conservative” assumption that a Chicago Olympics would generate a $525 million surplus.

If the Games lose money, there would still be a $200 million cushion. That would come from the sale of 117 luxury skyboxes at the Washington Park stadium and from an equity payment to the city from Olympic Village developers.

Chicago taxpayers come next on the financial totem pole — to the tune of $250 million. The five-layered approach then envisions $250 million in “third-party” guarantees--either from other public agencies or from private money, possibly insurance. After that, the city would be on the line for another $250 million.

Voting no were: Aldermen Dorothy Tillman (3rd), Toni Preckwinkle (4th), Shirley Coleman (16th), Arenda Troutman (20th) and Howard Brookins (21st).

Prior to the final vote, Preckwinkle blasted Daley for waiting until after the mayoral election to come clean about the need for the $500 million guarantee. “It’s very hard to believe that nobody knew prior to the election that $500 million would be required...and those same people want us to trust them that using these guarantees is a very remote possibility. It’s hard to believe,’’ said Preckwinkle, whose no vote came even though the Olympic Village would be located in her ward.

Ald. Leslie Hairston (5th) supported the guarantee but only after putting the mayor’s Olympic planners on notice: “We are a multiracial city and that should be reflected at every level in the planning of these Olympics. We need to err on the side of inclusion, not just smoke and mirrors,’’ she said.

Ald. Ed Smith (28th) took the $500 million leap of faith with his fingers crossed.

“I’m a little bit about shaky about this one. Actually, I’m ....really trepidacious about this one because we really don’t know what lies ahead. We could end up with some major financial problems. I understand that ‘nothing ventured, nothing gained.’ I just don’t want to end up with a lemon on my hands. ‘’

Several times during the more than hourlong debate, there were shouts from the gallery and banging on the glass that separates the third-floor balcony from the chamber. There were several threats to clear the chamber if order was not restored but only a few people were escorted out.

Ald. Pat O’Connor (40th) warned that the “acrimony’’ of the debate could send the wrong message to the U.S. Olympic Committee, which is scheduled to decide between Chicago and Los Angeles on April 14.

Today’s City Council vote in favor of the city’s share of a $1.47 billion financial guarantee marks a pivotal moment in Chicago’s heated competition against L.A. for the right to advance to the international stage. Without a guarantee against operating deficits by a March 31 deadline, Chicago’s bid was doomed.

Chicago 2016 Chairman Pat Ryan and Dana Levenson, the city’s chief financial officer, have said repeatedly that the chances of actually tapping Chicago tax dollars are “practically nonexistent.”

Daley agreed on the eve of the City Council’s historic vote.

“This is in case . . . everything breaks down completely…This would be like an earthquake. If an earthquake takes place and I doubt if it’s going to take place,” the mayor said.

Chicago taxpayers are on the line only because the federal government has refused to assume the risk, the mayor said.

“The U.S. Olympic Committee requires an insurance policy. In other countries, the federal government steps up and says, `We’re the insurance policy.’ Here in the United States, they’ve never done that. And that’s been a real question by the International Olympic Committee. Why wouldn’t the United States stand behind the Olympic movement?” he said.

If the USOC chooses Chicago over L. A. and Chicago is the International Olympic Committee’s choice in 2009, Levenson has said, the city could start building up cash reserves to cover any Olympic shortfall.

Ryan has said he expects to further insulate the city by raising more private money — on top of the $32 million in contributions already in the bank.

“All of the Games have been profitable…Nobody’s ever lost money on that operating line. We would have to be the first really incompetents to do that,” Ryan said last week.

“If we’re in the red — if we do something nobody’s ever done before — we have $200 million ahead of [the city]. We’re going to add to that…in private capital raising. We’ve got nine years to do this. We’re just at a point in time…where we have to have this in order to get to the next step. But once we win it, we’re going to move the city back” even further in the pecking order.

Chicago Public Radio | Listen to Council Voices and Was Daley Drunk at the End?

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Sun-Times | Daley Always Knew City Had to Pony Up

March 14, 2007
Chicago Sun-Times

BY FRAN SPIELMAN
City Hall Reporter

Mayor Daley said Tuesday he knew "at the beginning" that city tax dollars would have to guarantee Chicago's Olympic operating budget, but he didn't fess up about it because "we're not putting any actual money up."

The mayor's cover was blown last week when Bob Ctvrtlik, chairman of the U.S. Olympic Committee's evaluation commission, demanded during a visit here that Daley "put some skin in the game."

On the eve of a City Council vote that's make or break for Chicago's bid to host the 2016 Summer Games, Daley denied that the $500 million city guarantee breaks his promise to bankroll his Olympic dream with "not a dime" of local tax dollars.

'Like an earthquake'

"No we're not [breaking the promise] because we're not putting any actual money up," the mayor said. "This is in case . . . everything breaks down completely. . . . This would be like an earthquake. If an earthquake takes place, and I doubt if it's going to take place."

In a stuttering response to a reporter's question, Daley said he knew "at the beginning" of the bidding process that city money would have to be put on the table. Daley said he kept it quiet -- not because he wanted to get past the mayoral election -- but because "we're not putting any direct money into it."

A few hours later, mayoral press secretary Jacquelyn Heard clarified Daley's remarks. Heard said Daley knew about the demand for an Olympic guarantee "at the beginning." But until last week, he did not know that private market guarantees would be insufficient.

Racing to beat the USOC's March 31 deadline, the City Council is scheduled to vote today on the city's share of a $1.47 billion financial guarantee.

The layered guarantee assumes a Chicago Olympics would turn a profit of $525 million and that, even if it lost money, a $200 million cushion provided by Olympic Village equity and the sale of sky boxes at a temporary stadium in Washington Park would be enough to shield Chicago taxpayers.

Chief Financial Officer Dana Levenson has said the chances of actually tapping Chicago tax dollars are "practically nonexistent." If the USOC chooses Chicago over Los Angeles on April 14 and Chicago is the International Olympic Committee's choice in 2009, City Hall could start building up cash reserves to cover any Olympic shortfall, Levenson said.

Despite overruns that nearly tripled the cost of $475 million Millennium Park and $400 million in overruns at O'Hare Airport, Daley said he is confident Chicago taxpayers will not be left holding the bag.

Diverse panel planned: mayor

"It's a whole process going through the U.S. Olympic Committee. It's a whole process going through the International Olympic Committee. By the time you get there, you know every cost and figure you want out. It's completely different than any other project you've done," the mayor said.

Pressed on whether the U.S. government should step up to the plate, Daley said, "Well, you want them. But I can't try to persuade them. . . . You would never submit a U.S. city for consideration because you'd be waiting for a century to get it done."

This week, Ald. Freddrenna Lyle (6th) used a Finance Committee meeting on the $500 million guarantee as a forum to lambaste what she called the "elite white man's rich millionaire's kind of party club" that's spearheading Chicago's bid.

On Tuesday, Daley acknowledged that Chicago 2016 needs to broaden its umbrella.

"The committee is not really set up. This is a temporary committee just to get . . . some people with money involved. It has to reflect racially, ethnically all over the city, and that's what we're going to do," he said.

http://www.suntimes.com/news/metro/295879,CST-NWS-oly14.article

Sun-Times | Daley and Ryan Go Vacation...Again

According to Sun-Times Sneed column on Wednesday:

Dateline: The Jetstream Line -- Mayor Daley, first lady Maggie Daley and a gaggle of businessmen including Hizzoner's good buddy, Aon chief Pat Ryan and wife, Shirley, leave Sunday for a six-day blitz of four of Europe's tonier cities.

• Destinations: Dublin, Barcelona, Rome and Monte Carlo. Former U.S. Ambassador to Ireland Jim Kenny and Chicagoland Chamber of Commerce President and CEO Jerry Roper will be along for the ride.

• Is it for the Olympics? No.

• Is it to pitch trade and commerce in Chicago? Yes.

• Is it free? The Chicagoland Chamber of Commerce is picking up the tab. (Ryan is reportedly paying his own way.)

Beachwood Reporter | Examples of Daley Doubts

Beachwood Reporter takes a nice look at the flip-flops of King Daley:

"No we're not [breaking the promise] because we're not putting any actual money up," Daley said after it was revealed that city's Olympic bid will include a financial guarantee built from taxpayer money. "This is in case . . . everything breaks down completely . . . This would be like an earthquake. If an earthquake takes place, and I doubt if it's gonna take place."

Click here for other doubts and flip-flop examples...

Chicago Tribune | City, Daley Duck the Money Issue

City, Daley duck the money issue
Philip Hersh
On Olympic Sports

Chicago Tribune
March 12, 2007

It has been 10 months since Mayor Richard Daley announced Chicago would explore whether it made economic sense to bid for the 2016 Olympics.

Although the reply seems to be that the city will learn in a month whether it or Los Angeles is the U.S. candidate for 2016, some may wonder if the original question ever was answered.

Chicago 2016 has logos, T-shirts, a $30 million-plus war chest for the international phase of the competition and impressive, well-conceived plans for what the Summer Games would look like and where they would take place.

Even so, the Chicago bid story still has elements of an old folk tale about a man who didn't know how long it would take to roast a pig because he didn't know how much the animal weighed.

A friend told the man to put the pig on a board positioned like a seesaw and to find a rock that would exactly balance the pig. Having achieved that balance, there was only one problem: No one knew how much the rock weighed.

Chicago 2016 officials were caught between a sizeable rock and a hard place last week (yes, we're mixing metaphors) when the U.S. Olympic Committee insisted the city have a stake in the guarantee against financial shortfalls that the International Olympic Committee requires of bid cities. So they decided the Chicago pig weighed enough to feed the kitty, no matter how long it took to roast.

Chicago 2016 officials said Friday the city would never need to tap $500 million it would pledge to a guarantee because a Chicago Olympics would leave a $525 million surplus. But Chicago 2016 Chairman Patrick Ryan declined to give projected revenue and expense numbers to show how the balance would tip so heavily against any financial risk for the city.

And that brings to mind Charles Lamb's early 19th Century essay, "A Dissertation Upon Roast Pig," in which Lamb says that if there were ever a pretext to burn down houses, it would be to enjoy roast pig.

After all, we have Taste of Chicago. Why not enjoy a taste of the Olympics and assume it is a cash cow rather than Mrs. O'Leary's?

Give Chicago 2016 and the city credit for cooking up a fast response after USOC Vice President Bob Ctvrtlik insisted the city must have "some skin in the game" at a Wednesday news conference following the USOC's two-day evaluation visit.

Ryan insisted Chicago 2016 officials were caught off guard by the USOC's rejection of their plan to fund the guarantee from only the private sector. That surprise seems to explain what University of Chicago economist Allen Sanderson called a "deer-in-the-headlights" reaction by Mayor Daley at the Wednesday news conference, when he repeatedly dodged questions about his previous promise that no public funds would be used for the Olympics.

U.S. bidders start at a disadvantage. Everywhere but the United States, governments provide the financial guarantee. London had $3.8 billion in government guarantees against organizing committee shortfalls and an apparently limitless guarantee against other related costs when the IOC chose it as 2012 Summer Games host.

"I'm not opposed to spending public money for something beneficial to the city of Chicago," Sanderson said, "but the mayor should have made that case a long time ago. Maybe the benefits aren't that great."

Chicago 2016 officials are relying largely on Olympic finance theories posited by a German sports economist, Holger Preuss, in his 2004 book, "The Economics of Staging the Olympic Games, 1972-2008."

Preuss claims all those Olympics made a profit on organizing the Games if one removes "investments" from the final balance sheets. That will come as a shock to the citizens of Montreal, left with a white elephant Olympic Stadium and a $1 billion deficit.

Preuss' conclusions about profits for other recent Olympics, notably Atlanta '96, also are debatable.

"There are investments you have to make to have the Games," said Conrad Freund, chief financial officer of the 1984 Los Angeles Summer Games.

L.A. '84 became the economic model on which most future Olympic financial plans have been based. Privately financed, with corporations building the only two major facilities (aquatics center and cycling velodrome) the city lacked, Los Angeles turned an organizing profit of $232.5 million.

Freund sees the Los Angeles profit as a justification for Chicago's surplus projection, provided there is as much sponsor and TV excitement about a 2016 Olympics in the United States as both Ryan and LA 2016 bid Chairman Barry Sanders say they can expect.

"If you just multiply the L.A. profit by the inflation index, $500 million does not seem an unreasonable figure," Freund said.

Chicago plans to pay for its biggest Olympic projects—a $366 million largely temporary main stadium, a $78 million aquatics center with three permanent pools, a $1.1 billion Olympic Village—in a variety of ways, including Olympic revenues and investments by developers. All of it is to be private funding.

It very well could add up the way Chicago bid boosters claim. It just would be nice to see all the numbers before the bid dives from the frying pan it apparently escaped last week into the fire.

Crain's | Olympic Challenge

Olympic challenge

Crain's Chicago Business
By Gregory Meyer

March 12, 2007

What Chicago officials are calling "layers" securing taxpayers against a funding shortfall at the 2016 Olympic Games are actually revenue associated with the games themselves and the goodness of donors' hearts.

With no third party having yet stepped up to guarantee against an operating deficit, the Chicago 2016 bid committee's first line of protection is a projected $525-million operating surplus, city and bid committee officials announced Friday.

Its second protective layer is $200 million that the committee hopes to raise from the sale of luxury suites and from proceeds from the Olympic Village along the lakefront. As a third backstop, Olympics bid Chairman Patrick Ryan vowed he would redouble private fundraising efforts. But that carries the risk of crowding out donations to other non-profit groups, says one philanthropic expert.

After that, city taxpayers would be on the hook for as much as $500 million, depending on whether as-yet-unnamed private guarantees or "other public funds" come through, Mr. Ryan says. Games promoters would also buy insurance against catastrophes, such as a terrorist attack.

'WRAPPED IN CERTAINTY'

Dana Levenson, the city's chief financial officer, reiterated Friday that the city's exposure to a deficit would be "practically nonexistent."

But whether the operating books are written in red or black depends heavily on a proposed $366-million stadium being built on budget — something Olympics boosters say is a near certainty but some outside observers doubt.

More than 86% of the funding for the centerpiece stadium is to come from operating revenue — sales of tickets, television rights and sponsorships.

Mr. Ryan on Friday said the temporary stadium's cost estimate was vetted by three private firms and includes 15% for contingencies and that the design uses less steel and concrete, minimizing the risk of rising costs.

"We believe we have the stadium wrapped in certainty and conveyed this confidence to the U.S. Olympic Committee," Mr. Ryan says.

But as sports stadium consultant Marc Ganis notes, such plans and budgets almost never remain unchanged.

"There's virtually no chance of projecting the price of a facility that will open nine years from now," says Mr. Ganis, president of Chicago's Sportscorp Ltd. "What you can do now is provide your best estimates and hope that you're within a range and work within that range. But will it be different? Of course it will be different."

Says Allen Sanderson, an economist at the University of Chicago: "The temporary stadium is not going to come in at $300 or $400 (million) — it's going to be $700 (million) or a billion. Who's going to be liable for that?" He cites Millennium Park and the Dan Ryan Expressway reconstruction as examples of projects with cost overruns.

Mr. Ryan, whose committee has already raised more than $30 million to pursue an international campaign for the games, said he'd seek to raise more funds from private donors to limit the city's exposure.

"We plan on continuing to raise private funds to increase the value of this layer to further distance the city from risk," says Mr. Ryan, who did not provide the games' total revenue projection.

That's a prospect some non-profits are worried about, says fundraising consultant Greg Simoncini, vice-president at Scofield Co. in Chicago.

"I would say that the organizations that receive money from individuals, corporations and foundations should be protected if raising money from those sources is going to be one of the ways the city guarantees it can support the games," he says.

LA Times | Chicago Olympic Bid Hits a Bump

USOC asks city for financial guarantees

By Lisa Dillman, Times Staff Writer
March 8, 2007

CHICAGO — The U.S. Olympic Committee team evaluating the competing bids for the 2016 Summer Games ended its two-day visit here Wednesday with a request for financial guarantees, raising questions about the feasibility of this city's plan, specifically the temporary $366-million Olympic Stadium in Washington Park.

The request, voiced by Bob Ctvrtlik, who leads the USOC commission, came nearly a week after a similar inspection trip in Los Angeles, and knocked Chicago bid officials and Mayor Richard Daley off a carefully choreographed message.

At an afternoon news conference, Daley raised the possibility that city tax dollars might be used, a reversal of his previous comments.

He said they were working on achieving guarantees with both "private and public [funds]."

"There's a concern the U.S. Olympic Committee has," Daley said, "and rightly so, and we'll come up with a plan shortly."

The mayor then spent most of the question-and-answer session refusing to provide specifics about the guarantees. The issue could be addressed at a City Council meeting next week, given that the USOC has set a March 31 deadline.

Said Ctvrtlik: "There are many ways guarantees can be constructed. We definitely want the government to have some skin in the game. We've been assured by the mayor that is the case of the city of Chicago."

No such requirements were made of the other finalist, Los Angeles, about its plans to temporarily enhance the Coliseum, costing $112 million. In fact, there have not been any follow-up questions from the evaluation commission, according to a bid official, suggesting a high degree of comfort with L.A.'s plan.

"Because our proposed Coliseum work can be done in 6-9 months, the $112 million is not a capital expense and therefore can be paid for from Games revenues," said bid President David Simon in an e-mail. "If you can't pay for something from Games revenues, i.e., if it will be a major capital expense, the USOC asked that private financing be secured."

For Chicago bid officials, it was a mixed day that started with a light blanket of snow and a protester heckling as the evaluation committee members boarded a bus outside a downtown hotel.

Of more concern was the issue of financial guarantees and a possible mayoral flip-flop detracting from what had been regarded as a positive bid evaluation. This could mean three rocky weeks for local organizers and loss of momentum leading up to the final decision by the USOC on April 14.

"There are basically two issues at hand, and only two," said sports facility expert Marc Ganis, who is based in Chicago. "One is not being embarrassed on the Olympic Stadium. That's a threshold. And the second is to get the 60-some-odd votes that constitute a majority at the IOC [International Olympic Committee] level. Everything else is background noise."

Two other American bids have imploded because of the Olympic Stadium issue: New York, at the international level, in 2005, and San Francisco, in the domestic bid process late last year.

"If the New York embarrassment didn't happen, I don't think we'd be putting as much attention on this today as we are," Ganis said. "I'm not sure our Chicago planners understood the magnitude of the issue to [USOC Chairman] Peter Ueberroth. Either you get this done or don't bother to try to come and play the game."

Said Chicago economist Allen Sanderson: "Chicago has had two recent big-ticket items. Millennium Park was put out at something like $150 to $175 million and came in at $475 [million]. The rebuilding of the Dan Ryan Expressway, which was budgeted at $500 million, will now run over $1 billion.

"There's no way the Olympic cost would not follow that sort of model. I just would like something that would pass Accounting 101."

Jim Scherr, USOC chief executive, mentioned the huge cost overrun of the Millennium Park project as a "factor in our evaluation" but said he felt comfortable with the estimates for the Olympic plans from officials.

As for Daley, Ganis expects he will come through, even if it means going against his pledge.

"You use political capital when it's time to close a deal," Ganis said. "There will be people who will have loud voices against it. But at the end of the day, this man controls this city."

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