$20M No-bid Contract Plus a Connected Nonprofit Equals One Big Inquiry

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April 18, 2015; Chicago Tribune

The work and influence of the Chicago Public Education Foundation (CPEF) received headline attention as a result of a $20 million no-bid contract award by the Chicago Public Schools (CPS) for training services for the district’s principals. On Sunday, the Chicago Tribune reported that although “the course of the evolving investigation is still unclear, the scandal has focused on Chicago schools CEO Barbara Byrd-Bennett. She once worked for the Wilmette-based SUPES Academy that received the no-bid contract to train school principals.” While federal subpoenas have been served on CPEF, its exact connection to any potential wrongdoing is still unclear. Ms. Byrd-Bennett was granted a leave of absence by CPS while the investigation continues.

In a statement emailed to NPQ by Matt Lyon, CPEF’s COO, Heather Y. Anichini, CPEF’s CEO, said:

“In 2011, our organization made a $380,000 grant to SUPES Academy for a one-year pilot program to train CPS network chiefs and their deputies. Network chiefs are the CPS employees who supervise and manage school principals. In 2012, following the completion of that pilot program, we declined a request by CPS leadership to provide a second year of funding for SUPES Academy training of principals. The Chicago Public Education Fund, its directors, and its staff have had no involvement with SUPES Academy since 2012. We have been advised that our participation in the recent investigation regarding CPS and SUPES Academy is solely as a witness.”

As detailed on the foundation’s website, CPEF was formed 15 years ago as one of the “first city-based philanthropic venture funds in the nation.” The Fund is “dedicated to achieving the goal of a world-class education for all of Chicago’s children.”

The investigation includes two other CPS employees with close ties to Ms. Byrd-Bennett “who worked with her in Cleveland and Detroit before taking six-figure jobs at CPS. Sherry Ulery, the CEO’s $175,000-a-year chief of staff and Rosemary Herpel, a $140,000-a-year ‘executive director of leadership development’ in CPS’ HR department, are due before a federal grand jury on Tuesday.”

Sparking interest in CPEF’s connection to the budding scandal is the politically powerful makeup of its board of directors. Illinois Governor Bruce Rauner and U.S. Commerce Secretary Penny Pritzker are past chairs of CPEF’s board of directors. Beth Swanson, who formerly was Deputy Chief of Staff for Education under Chicago Mayor Rahm Emanuel, and the current chair of the Chicago Board of Education, David Vitale, serve as CPEF board members. Other notable business and philanthropic leaders also serve on the fund’s board.

The probe comes at a difficult time for Chicago Public Schools. It is facing a $1.1 billion budget shortfall, a seriously underfunded pension plan ($9.5 billion) and a teachers’ contract that expires this summer. Should the scandal prove to be more deeply connected to CPEF and its powerful leadership, it will have serious implications for finding a way out of the deep financial hole faced by CPS, the City of Chicago and the State of Illinois.—Marty Levine