The Chicago Way of hosting the Olympics

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Michael Scott

You could write the script blindfolded and with your hands tied
behind your back. Kinky--but not illegal, we're told--dealings have
emerged from the Daley/corporate campaign to bring the 2016 Olympics to
Chicago.

And, in another unrelated but related story, promises that another
huge and costly project that wasn't supposed to cost hometown taxpayers
anything reportedly have been quietly broken.

The Chicago Tribune first disclosed that a member of the Chicago
2016 committee in charge of attracting the Olympics here is involved in
a planned development near one of the Games' venues. Michael Scott,
appointed to the Olympic committee by Mayor Richard M. Daley, and other
political insiders were planning to develop city-owned vacant lots near
the Douglas Park cycling venue into a mix of affordable and market-rate
housing and stores, including a Nike shoe store.

Scott, also the Daley-appointed president of the Chicago Public
Schools board, initially did not disclose his involvement with the
for-profit group, but upon its disclosure, said that he would receive
no financial gain from his connection with the project. Chicago 2016
initially said they were satisfied that Scott had done nothing wrong.
Someone must have told the committee, "Uh oh, this doesn't look too
good," because overnight the committee issued a new comment saying that
Scott should have disclosed his involvement and that he is severing his
connection with the group as soon as possible. (Tribune story is here.)

Let's review: Daley announces a big project, with lots of concrete
to be poured, lots of engineering work to be done, lots of consultants
and advisors to pay, lots of people to hire, lots of contracts to let.
Suddenly, it is discovered that someone--an insider with connections to
both the city and the group that is putting together the project--has
plans to leverage the project by building a development on land that
just happens to be owned by the city. (Insiders buying up property near
a big project in the early stages of its planning is a finely developed
art in Chicago and Illinois. But sometimes it can prove risky, witness
the folks who gobbled up property along Cicero Ave. in the 1970s
figuring that the Mayor Richard J. Daley's push to build the Crosstown
Expressway was a lock. The expressway never was built.)

As usual, the powers that be scoff at the conflict of interest
variously saying: (1) it doesn't matter, (2) no one will make any money
off it and, finally, (3) gee, we never knew about it and now that we
do, we'll make sure that it never happens again.

Meanwhile, other scripted events move apace. Another fundraiser to
pay for the Chicago 2016 bid scared up another $5 million, bringing the
total raised from this and previous efforts to $66.6 million in cash
and $9.4 million in pledges. This money (of course, how could we think
otherwise?) comes entirely from civic-minded individuals, groups and
companies that have nothing in mind but the greater glory of Chicago.
No one would be contributing to get the inside track when the contracts
are handed out. Such contributions are being monitored by the
committee's own ethics officer, audit committee, board of directors and
so forth. True to form, the ethics officer repeated her conclusion that
Scott would not profit from his involvement, but that it did create a
perception of a conflict of interest.

What we have here are...perceptions. No one in this city ever has a
real conflict, insider deals are never struck, Daley was never aware,
nobody knows nothing. Just as we have been repeatedly told that the
Olympics will never cost the taxpayers anything, or at least not very
much, even though the numbers behind the claim remain about as clear as
a blow of split pea soup. Witness the O'Hare Airport expansion, which
Daley and his captive corporate captains always maintained was to
improve the airport, never, ever to make anyone some nice money.

Those with good memories may recall that the same kinds of promises
were made when a city-state agency known as the McPier Authority
proceeded with the financing for such lakefront convention and tourism
projects at McCormick Place and Navy Pier. A big hotel/motel tax
(imposed on outsiders, you see) would pay the bonds to fund the
projects.

Now comes the disclosure that the tax, oops, won't be enough to make
the bond payments after all and--guess what? --the agency had to bleed
some $18 million from the state's sales tax. This is money that was
supposed to go into the state's general fund, to pay for an array of
services that are getting pinched because the state already is in deep
financial trouble. As blogger Greg Hinz explained: "The state is the
legal guarantor of up to $275 million in McPier debt. In the event of a
shortfall in McPier's accounts, the agency can go directly to the state
comptroller to get the funds it needs up to the $275-million limit,
without having to go back to the General Assembly for a separate
appropriation."

How convenient. How unshocking.

Is there a lesson to be learned here that can apply to 2016
Olympics? You bet. No one outside the inner circle of Olympic
impresarios really has a handle on how the Games here would be
financed. Whatever you think of the benefits to be had and the costs to
be imposed on the commonweal, this isn't the way to do business. Even
if it is--in columnist John Kass' coinage--the Chicago Way.

This column also appeared in the Chicago Daily Observer

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