Chicago mayor’s intentions questioned after taking donations from hoteliers

On his first day in office, Mayor Rahm Emanuel signed a series of executive orders banning political giving from lobbyists and contractors doing business with the city, part of his campaign pledge to move City Hall beyond the pay-to-play culture that has earned Chicago a national reputation.

“Government can no longer be an insider’s game, serving primarily the lobbyists and well-connected,” Emanuel said on the campaign trail.

Yet as mayor, Emanuel is taking in campaign donations from business interests who need his administration to provide crucial approval for major real estate developments, including high-profile hotel projects in some of the city’s biggest tourist areas.

Last month the mayor recorded a $10,000 contribution from a development company just a week before the Emanuel-appointed Chicago landmark commission approved the firm’s request for a multimillion-dollar tax break to convert the Chicago Athletic Association building near Millennium Park into a hotel.

Earlier in March, Emanuel shoveled dirt at a ceremonial groundbreaking for a high-rise Streeterville hotel and apartment complex with two developers who combined have given him $35,000 as mayor, including $15,000 this year.

The donations highlight a path around the executive orders Emanuel signed, which aim to promote public confidence by insisting city officials “avoid transactions and circumstances that may compromise or appear to compromise the independence of city decisions.”

Under those fundraising rules, a company seeking a city contract of any size is banned from making a political donation to the mayor. Likewise, anyone listed as a City Hall lobbyist for a building developer cannot contribute to Emanuel’s campaign fund. But the owner and employees of a development company are free under the rules to fill the campaign coffers of the mayor, even while his administration makes key decisions involving their projects.

Those decisions range from zoning changes and tax breaks to building permits and liquor licenses.

David Morrison, acting director of the Illinois Campaign for Political Reform, said the lobbyist and contractor restrictions Emanuel has put in place are not “terribly meaningful.”

“It is a restriction that looks good on paper but is pretty porous in practice,” Morrison said.

Former alderman and Chicago ethics expert Dick Simpson said such donations exist in a gray area that the mayor should clear up with a broader contribution ban.

“It’s a little hard to write the language, but it’s very clear what the idea is,” said Simpson, a political science professor at University of Illinois at Chicago. As alderman, Simpson said, “I would not take any contribution from people who had a development or a zoning proposal related to my ward in the previous year or who were going to in at least the coming year.”

Many members of City Council do just the opposite, raking in donations from real estate interests who recognize that aldermen hold veto power over development in their wards.

Emanuel has said little about that practice but has called for other ethics changes that he says will bring more transparency and accountability at City Hall. The mayor’s top spokesperson said that nothing about the developer donations contradicts that idea.

“The mayor has instituted the highest ethical and transparency standards and does not accept contributions from entities that do business with the city,” Emanuel communications director Sarah Hamilton wrote in an email response to the Tribune. “Nearly every Chicagoan does business in the city, and the mayor is happy to have their support.”

It’s not easy to discern from records filed by Emanuel’s political operation with the State Board of Elections that his campaign funds have benefited from businessmen who need City Hall clearance for their projects.

One of those businessmen, Donald R. Wilson, has been a major donor since Emanuel’s campaign.

In 2010, Emanuel’s primary political fund received $147,000 tied to a large securities trading firm, DRW Holdings LLC. The firm’s founder, Wilson, and employees of his related companies made the contributions that were recorded in one day; campaign finance records reflect only the company’s role as a trading firm.

Wilson has also moved into the real estate development business. Campaign records show Wilson has personally donated $30,000 since 2011 to Emanuel’s other political fund, the Chicago Committee, including $10,000 in January.

At about the same time, Emanuel received $5,000 from Jonathan Tisch, CEO of Loews Hotels & Resorts, which will operate the hotel portion of the Streeterville high-rise Wilson is developing.

The three men appeared together March 1 at the site just east of Columbus Drive and north of the Chicago River, where Emanuel praised the project for adding construction jobs and enhancing Chicago as a tourism destination.

A spokesman for DRW and Wilson declined to answer questions. A Tisch spokesman said the Loews CEO and Emanuel have a relationship that dates to Emanuel’s years in the Clinton White House and noted there were no subsidies for the hotel project.

“It really isn’t about anything other than that — an existing relationship and that he thinks the mayor is doing a good job in Chicago,” said spokesman Jeffrey Stewart.

Companies tied to another prominent businessman and hotelier, Ben Weprin of AJ Capital Partners, made $15,000 in donations to Emanuel this year as two hotel developments gain traction at City Hall.

On March 26, Chicago for Rahm Emanuel received a $10,000 donation from CAA Hotel Owner LLC and a $5,000 donation from FMP One LLC, according to campaign finance records.

FMP One is listed as the owner of a former industrial building near the West Randolph restaurant corridor that Weprin’s AJ Capital is turning into the Soho House, a members-only club and hotel scheduled to open in 2014.

AJ Capital Partners is also part owner of CAA, which is developing the old Chicago Athletic Association building at 12 S. Michigan Ave. The nearly $100 million joint venture also is being backed by the San Francisco private equity firm run by billionaire John Pritzker.

On April 4, the Commission on Chicago Landmarks voted to reduce property taxes on the building for a dozen years, a tax break the commission spokesman estimated would save about $5.7 million.

The project has yet to be introduced to the Chicago City Council, which would still need to approve the development along with officials in Emanuel’s administration.

Weprin did not return calls for comment.

A top political consultant to Emanuel said those donations do not influence the mayor.

“He does what he believes to be in the best interests of the city as a whole,” said Emanuel adviser John Kupper. “He does not get involved in individual issues before the Landmarks Commission or other independent bodies.”

Kupper noted that Emanuel raised parking lot taxes this month, a move opposed by hoteliers.

The city’s hospitality industry, including hotel and restaurant operators, held a fundraiser for Emanuel on March 11 at Gibsons Steakhouse, weeks before the City Council approved the mayor’s tax plan.

Association officials also met with Emanuel aides but were unable to persuade the administration to drop the plan, said Marc Gordon, president of the Illinois Hotel and Lodging Association. That one move doesn’t change the industry’s appreciation for the mayor, Gordon said.

“The mayor has done a lot of things to help hotels in Chicago, and he understands how important the hotel industry is to our city and state,” Gordon said.

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