By Andy Shaw, BGA President & CEO
Illustration/Better Government Association
Last month, the BGA and FOX Chicago exposed Chicago city officials spending your tax dollars on lavish meals, first-class seats and fancy hotels, and even red-light camera tickets. These investigations had results:
- 6/1: BGA Investigations Prompt Early Exits for Parks Chief
- 6/3: Emanuel Cuts Credit Card Use After BGA/FOX Investigation
- 6/14: Embattled CHA Chief Resigns After BGA/FOX Investigation
Today the city is making big changes to rein in city spending and credit card abuse. Mayor Rahm Emanuel announced he’s eliminating most of the 500 city credit cards and banning the use of petty cash altogether.
Here’s what the Sun-Times had to say this morning:
Mayor Rahm Emanuel is cutting from 500 to just 30 the number of credit cards used by local government agencies — and banning the use of petty cash altogether —after alleged abuses that ousted the chiefs of the CHA and Chicago Park District.
Government employees will also be expressly forbidden from spending taxpayers’ money on everything from alcohol, flowers, office decor and restaurant meals within a 50-mile radius of Chicago to sponsorships, charitable donations and parties celebrating holidays, birthdays and employee appreciation.
Mayor Emanuel/Sun-Times
To guard against future abuses, only five credit cards will be issued to each of six agencies: the CTA, CHA, Park District, Chicago Public Schools, City Colleges and Public Building Commission. Their use will be confined to top executives, whose expenditures will be posted monthly to shine the light on credit-card spending.
Last month, a joint investigation by the Better Government Association and WFLD-TV uncovered alleged credit-card abuses at the CHA and the Park District.
The card issued to Chicago Housing Authority CEO Lewis Jordan had been used to pay for costly meals at Gibsons and other upscale restaurants.
The investigation also found CHA credit cards were used to buy thousands of dollars worth of flowers, cakes and holiday gifts for employees, a suite at the United Center and to pay red-light camera tickets.
Emanuel has made ethics reform a central theme of his new administration and pounced on the abuses. He called a halt to credit-card spending and ordered a sweeping audit of agency policies. Jordan subsequently resigned.
The investigation also hastened the departure of Park District Superintendent Tim Mitchell, a political operative for former Mayor Richard M. Daley who had been angling to stay under Emanuel.
Now, City Comptroller Amer Ahmad — with pro-bono help from Sidley Austin LLP and the Civic Consulting Alliance — has completed his review. It wasn’t pretty.
He found that the city’s loosey-goosey or non-existent policies governing credit cards, petty cash and employee reimbursement had opened the door to an array of abuses that circumvented city contracts that would have offered taxpayers a cheaper bulk price.
“Although all policies specifically stated that the card must be used exclusively for business purposes, questionable and/or inappropriate expenditures were identified, such as: extensive local meals/refreshments; entertainment; excessive professional development/executive coaching; parking/ red light tickets; car washes; sporting goods; flowers [and] cable bills,” said the report, obtained by the Chicago Sun-Times.
The city’s petty cash policy is supposed to limit accounts to $1,000 and individual expenditures to $1,000. Even so, there were “numerous reimbursements in the thousands of dollars and one as high as $34,000,” the report stated.
Sources said the $34,469 expenditure was for gasoline. That’s even though recurring fuel purchases are supposed to fall under the city’s competitively bid fuel contract.
City Hall will continue to steer clear of credit cards. The 30 cards issued to other government agencies will be confined to “emergency purchases.” They will be controlled by the agency’s chief financial officer and registered with the city comptroller. “If it is determined that an expenditure purchased with a procurement card is not for emergency purposes, the agency’s access to procurement cards will be revoked,” the policy states.
From now on, employees will be required to submit their non-travel expenses within 30 days and explain why the item was not purchased “through the normal purchase order/ procurement process.”
“The primary means of purchasing valid goods and services necessary for conducting City of Chicago business should be through a competitively bid procurement process,” Ahmad wrote in a memo to city department heads.
BGA Investigators' Notebook 