The Biggest Shark in the Reinvention Pond: The Commercial Club of Chicago

As we sketched out in our posting of May 24, 2011, it is the rich and the corporations who have been molding the Reinvention through the Advisory Councils (http://reinventingccc.org/task-forces/advisory-council) and the “Partners” listed by the CCC in their website (http://reinventingccc.org/partners). One particularly influential business organization is not listed as a “Partner”: the Commercial Club of Chicago (ComCC). The ComCC is only referred to indirectly through its pro bono government-consulting arm, the Civic Consulting Alliance. But we should be clear here, the huge white elephant in the room is the Commercial Club of Chicago, which is not only the most powerful force behind the Reinvention, but in the city of Chicago itself. And it has been this way for more than a century.

The ComCC is sort of the executive committee of Chicagoland’s ruling elite. Mayors have come and gone, with their own personal quirks, ambitions, corruption schemes, etc., but when it came to the major adjustments in the direction of the city, the ComCC has always been present, directing the flow in relative obscurity. In an unabashed description of how it conceives its role, the ComCC says in its website that “As the 20th century dawned, Commercial Club members turned their attention to the broader objective of molding Chicago into one of the great cities of the world.”  (http://www.commercialclubchicago.org/purpose/index.html)

A History of Disdainfully Exercised Power

The ComCC does not exaggerate when it claims that its main goal was and is to mold the city. Its own description of its historical accomplishments in the web link listed above clearly details the overwhelming power of this club of rich elites.

Going as far back as 1877, its first goals were ambitious: restructuring taxation (still working at it today), addressing the infrastructure of the city, mainly streets and schools, and founding the first vocational school for boys. Clearly all these goals were not selfless acts of human generosity, but they were aimed at improving the business environment of Chicago. The ComCC’s meddling with education dates back to its inception, and clearly the vocational school for boys was a direct means to produce workers with the skills its industrial barons desired.

Through architect Daniel Burnham’s 1909 Plan, they shaped the city, being the force behind the scene in the building of Wacker Drive, Grant Park, and “most of the major rail and highway corridors serving Chicago today.” Its power overflowed the city’s boundaries.  It “championed a 16-year … campaign to reform the Federal Reserve system and helped draft the Federal Reserve Banking Act of 1913.” And it was the major force pressuring for the “referendum [that lead to] a convention to rewrite the Illinois constitution in 1970.” With its Chicago Metropolis 2020 report in 1999, the ComCC developed a master plan to shape 6 major areas of public policy for the city: “education; economic development; taxation; governance; transportation, and land use and housing.”

As writers Beth G and Lisa Sousa point out:

The Commercial Club created an organization to carry out the lofty, ‘global city’ goals of Metropolis 2020, bearing the same name. The drive to attain ‘global city’ status has meant engaging in intense competition to attract business (particularly in the financial and hi-tech services sectors: think Boeing), a focus on city image over substance (think the campaign for “greenest city in America”), remaking particular areas as playgrounds (think Millennium Park), and an overall increase in the polarization of rich and poor as priorities shift. (http://www.areachicago.org/p/issues/city-as-lab/snuggle-commercial-club-chicago/)

The Civic Committee

In 1983 the ComCC “formed its Civic Committee - a smaller group of member CEO's and senior executives from Chicago's leading businesses, professional firms and universities - to consider needs and plans for the development of the Chicago metropolitan area.” [from the same ComCC link listed above, emphasis ours] Two of the Civic Committee’s major preoccupations were “reforming” the Chicago public schools (CPS) and expanding O'Hare airport. If you look at the list of “accomplishments” of the Chicago bosses, Daley the father and Daley the son, and compare it with the information described so far, a different picture emerges of who has always been the real boss of Chicago: the Commercial Club of Chicago.

The blatant self-serving intrusion of the ComCC in the city’s education system is highlighted by the fact that its Civic Committee issued a report titled “Left Behind” whose recommendations became the basis for CPS’s draconian Renaissance 2010. The Renaissance 2020 plan called for the closing of 60 to 70 neighborhood schools and for the introduction of up to 70 charter schools. According to DePaul University professor Pauline Lipman “Renaissance 2010 opens up the third largest school system in the USA to a market model of school choice, privatization, and elimination of school employee unions and elected local school councils.” (http://www.areachicago.org/p/issues/city-as-lab/linking-policy-experiments-ren2010-and-plan-transf/)

By now the Chicago Teachers Union has lost thousands of members due to the school closings and the transformation of the schools into non-union charters schools. The charter school crusade has reached unseen lows, with former Chicago CPS CEO Arne Duncan (and now Obama’s Secretary of Education), who oversaw the implementation of Renaissance 2010, stating that “The best thing that happened to the education system in New Orleans was Hurricane Katrina.” (http://abcnews.go.com/blogs/politics/2010/01/duncan-katrina-was-the-best-thing-for-new-orleans-schools/?utm_source=twitterfeed&utm_medium=twitter) Why? Because it allowed the New Orleans government to fire all school teachers and turn most schools into charter schools. So to this day the Civic Committee has poured about $70 million into the charters schools through its Renaissance Schools Fund. (http://civiccommittee.org/initiatives/education/index.html) Currently, the Civic Committee continues to direct the “charterization” of Chicago’s public schools through an entity it named New Schools for Chicago (see http://newschoolsnow.org/).

The City Colleges of Chicago (CCC) have a long history of hiring former CPS officers to their top-level administrative posts. With the Reinvention, the hiring trend has continued, but along very revealing lines. A good number of the new personnel at CCC headquarters comes from the CPS departments dealing with Renaissance 2010 matters or from the Civic Committee’s Renaissance Schools Fund staff. A key appointment that highlights the incestuous relationship between the ComCC and the CCC administration is that of  “Alvin Bisarya, Vice Chancellor of Strategy and Institutional Intelligence, [who] has previously served as a senior staff member at the Renaissance Schools Fund and a consultant with McKinsey & Co.” (http://www.ccc.edu/20100714.asp, emphasis ours) Mr. Bisarya is none other but the Vice Chancellor in charge of the Reinvention Task Forces! Perhaps the choice of the term Reinvention is not so original given that it was used by CPS back in 2003 when it launched its first round of Renaissance 2010 schools in the mid-south side of Chicago because it wanted to “reinvent the area’s 25 schools and make them a magnet for the return of middle-class families.” (Lipman, op cit.)

The Civic Consulting Alliance

In its website, the Civic Consulting Alliance (CCA) describes itself in the following manner (http://www.ccachicago.org/sites/default/files/About%20Civic%20Consulting%20Alliance_2.pdf):

Civic Consulting Alliance is a partnership that reshapes how the city works.  We build pro bono teams of business experts, government leaders, and our own staff…For twenty-five years, Civic Consulting has led long-term series of projects to make a difference that no single firm could achieve on its own…Our government partners commit to implementing the changes we jointly identify as necessary, and we work with them to steward that implementation…In becoming involved, partners demonstrate their commitment to the city and can be assured their work will make a real impact.

Establishing implementation as a fundamental principle means that our teams facilitate and experience rewarding change on each project, thus making Civic Consulting the most effective way for firms to work pro bono on metropolitan issues…A small core staff is supported by funding from  the Civic Committee of The Commercial Club of Chicago, one of the oldest organizations representing the business, professional, educational, and cultural leaders of the Chicago region, and foundations that understand the value we provide…We only take on projects where we believe we have the opportunity for significant impact…Large, pressing problems affecting a broad swath of businesses and residents get top priority. (emphasis ours)

Evidently the CCA identifies the major changes it intends to promote, writes the blueprints and takes it all the way to implementation. From cradle to grave. This is the strategy that the ComCC has identified as the most productive in molding Chicago to its business development schemes and priorities. And the mayors assent. No wonder that the CCA brazenly quotes former Mayor Daley implicitly acknowledging who the instigator of his most impacting programs was:

“My hope is that Civic Consulting Alliance will continue to be a partner in change, and that both Civic Consulting and the private-sector leaders in Chicago will help us continue to make Chicago an even greater city.”

Richard M. Daley, Mayor, City of Chicago

Funding and human resources are provided to the pro bono projects of the CCA by companies and foundations. Some of the most significant ones are: McKinsey & Company, Inc. (for whom Vice Chancellor Bisarya also worked, and listed separately by the CCC as a “Partner” of the Reinvention), The Boston Consulting Group (BCG), Deloitte, Ernst & Young, IBM Corporation, KPMG LLP (listed separately by the CCC as a “Partner” of the Reinvention), Accenture (listed separately by the CCC as a “Partner” of the Reinvention). To examine the full list of Reinvention business and pro-business foundations “Partners” see http://reinventingccc.org/partners.

Another significant Reinvention appointment connected to the ComCC through the CCA (and also to Reinvention “Partner” Accenture) is that of Harold Washington College’s new president, Donald Laackman. He is described by the CCA as one of their former Principals, and in his previous life as “managing director of Accenture's North American Insurance program.” Laackman describes himself as having worked for Accenture for 23 years. This statement hides the fact that Accenture came only into existence in the 2000s after fully dissociating itself under the name Arthur Andersen Consulting from Arthur Andersen, the auditing company that went under after the multimillionaire ENRON scandal of the early 2000s. Laackman’s business experience and the fact that he directed Accenture’s North American operation, i.e., having under his supervision thousands of employees, dwarfs the business credentials of CCC Chancellor Cheryl Hyman—who at the time of her executive zenith at ComEd had managed a maximum of 14 employees.

 Considering that the Reinvention, as we have described in previous postings (September 5, 2011), is a response to the Obama administration’s plans to dramatically restructure the role of community colleges through Chicagoan Arne Duncan’s Department of Education, and that Laackman’s spouse is a key economic advisor at the White House, it is hard to avoid the following questions. Why isn’t Laackman the Chancellor and Hyman the subaltern? Is this scenario in the cards? Couldn’t it be that Hyman is the CCC’s counterpart to CPS’s new CEO Jean-Claude Brizard who has been brought to Chicago to break the back of the Chicago Teachers Union (CTU), and after he has shed enough blood, successful or not, he will be kissed good bye by Emanuel, and replaced by someone less controversial to stabilize the system?

The Commercial Club of Chicago and Public Employee Pensions

The ComCC wants to balance the Illinois state budget on the backs and corpses of public employees. Not content with having greased the way for Illinois state legislators to raise the age of retirement for new employees to 67 years, with lesser pension benefits, it wants to do the same with public employees who have worked at their posts for years or decades. (See the website built by the ComCC  to promote their crusade: http://www.illinoisisbroke.com/facts.aspx.) Under the Illinois state constitution this is supposedly illegal. However, the ComCC and its political servants are betting that if the law is enacted, when the law is challenged at the state’s Supreme Court, the judges will follow the smell of the money that placed them there and decree that the law passes constitutional muster.

For this purpose it has designed a two-pronged approach to dismember the pensions of public employees. Under the banner “Illinois is Broke” it has funded an extensive public relations campaign demonizing public employees as fat cats who want to retire in luxury at the expense of state taxpayers. But as NBC Chicago blogger Edward McClelland wrote,

The class envy angle is particularly cynical, because the main reason private employees don’t enjoy the same benefits as public employees is that groups such as the Commercial Club have been so successful in destroying the labor movement. Now, they’re trying to turn the impoverished lower-middle class they helped create against one of the last remnants of the middle class, all so the upper class can pay less taxes. (http://www.nbcchicago.com/blogs/ward-room/Illinois-Is-Broke-peddles-broken-rhetoric-121506344.html)

In addition, the ComCC has managed to gain extensive support from powerful Democrat politicians like House Speaker Charles Madigan who co-sponsored Senate Bill 512 with Republican Tom Cross. Although the voting on the bill has been postponed by the House of Representatives, if passed, SB 512 would offer current public employees three options, (1) pay higher contributions to keep their benefits unchanged, (2) lower retirement benefits with a minimum retirement age of 67 years, or (3) to do away with a defined benefit pension in exchange for a 401k-type of plan.

According to a statement, aired by WTTW on October 22, from the public employees union AFSCME, it would take 652 years for the average AFSCME retiree (at $30,000 per year) to receive as much money as the current chairman of the ComCC, Abbott Labs CEO Miles D. White, will receive from his pension.

And this goes to the heart of the matter. Who are these people that have been running and ruining our lives? At 500, the ComCC’s “[m]embership is “limited to residents of the Chicago metropolitan area who shall be deemed qualified by reason of their personality, general reputation, position in their business or profession, and service in the public welfare.” The club’s makeup is self-perpetuating: new members are accepted based on a written nomination by a current member, and requires seconds from at least six other members.” (G and Sousa, op cit.) Below is a selection of this elite crew (from http://www.commercialclubchicago.org/members/):

Ellen S. Alberding, President, Joyce Foundation

Anthony K. Anderson, Vice Chair and Midwest Managing Partner, Ernst & Young LLP

Gerald J. Arpey, Chairman and Chief Executive Officer, AMR Corporation/American Airlines, Inc.

James A. Bell, Corporate President and Chief Financial Officer, The Boeing Company

James C. Borsum, Principal, KPMG LLP

William J. Brodsky, Chairman and Chief Executive Officer, Chicago Board Options Exchange

Greg Q. Brown, Chairman & Chief Executive Officer, Motorola Solutions

Kathleen L. Brown, Chairman, Investment Banking Midwest, Goldman Sachs & Company

David A. Carlquist, Vice President, IBM

Gregory C. Case, President and Chief Executive Officer, Aon Corporation

Frank M. Clark, Chairman and Chief Executive Officer, ComEd

Christopher M. Crane, President and Chief Operating Officer, Exelon Corporation

Lester Crown, Chairman, Henry Crown and Company [family wealth = $4.8 billion]

William M. Daley, Chief of Staff, The White House

Deborah L. DeHaas, Vice Chairman and Central Region Managing Partner, Deloitte LLP

Rahm I. Emanuel, Mayor, City of Chicago

Charles L. Evans, President and Chief Executive Officer, Federal Reserve Bank of Chicago

David W. Fox, Jr., Vice Chairman, J. P. Morgan

James T. Glerum, Jr., Chairman, Head of North America Regional Banking, Citigroup

Kenneth C. Griffin, Founder and Chief Executive Officer, Citadel, LLC [wealth =$3.7 billion]

Tony W. Hunter, Chief Executive Officer, Tribune Publishing Company

Valerie B. Jarrett, Senior Advisor to the President, White House

Paul V. La Schiazza, President – Illinois, AT&T Illinois

Timothy P. Maloney, Illinois President, Bank of America

J. B. Pritzker, Managing Partner, The Pritzker Group [wealth = $1.6 billion]

Penny Pritzker, President and Chief Executive Officer, Pritzker Realty Group, LP [wealth = $1.7 billion]

Thomas J. Pritzker, Chairman, Hyatt Hotels Corporation [wealth = $1.8 billion]

J. Christopher Reyes, Chairman, Reyes Holdings, LLC [wealth = $2 billion]

Michael D. Scimo, Managing Director, Chicago Office, Accenture

William Wrigley, Jr., Chief Executive Officer, Wrigley Management, Inc. [wealth = $2.2 billion]

The Commercial Club of Chicago exercises its power regardless of who is in office, imposes its agenda and is accountable to no one. This disturbing reality explains much about the history of the city. As G and Sousa ponder,

What are the implications of city policy being framed around a corporate definition of a good society? Do we want our children’s educational opportunities to be dictated by JP Morgan Chase, Exelon, Morgan Stanley and Bank of America? Public policymaking should not be the domain of Chicago’s corporate elite, whose fundamental motives lie with increasing the potential for their own profit.

We should have no illusions that such powerful, ruthless and self-serving entity has the best interests of the city’s working people and its poor at heart when it pursues any policy. This should be very instructive to us at the CCC regarding the Reinvention. Reinvention in whose interest and at whose expense? Certainly not for the students and their communities, not for the faculty, nor the professional, clerical or physical plant workers. We need to understand what is the source of this hefty power that directs and prods the Reinvention ahead. But we also have to get organized to confront it. The Occupy Wall Street movement gives us a glimpse of our own power and the path that we need to take to stop these sharks on their tracks, to put people over profits.

PEARL