ROLLING THE DICE ON REFORM

The Municipal Code of Chicago (Section 2-156-120) requires that the city’s Office of the Inspector General (IGO) file four reports a year on the activities of the office.  They are fascinating documents for two reasons: (1) sadly very few people actually read them, and (2) they basically always report the same findings of fraud and corruption.

The OIG’s latest report, issued last week,  is a one-year follow up of its May 2010 Review of the City’s Minority & Women Owned Business Enterprise (MWBE) program.  The Office released a statement saying, “The follow-up notes that City leadership largely ignored the prior report’s findings. Specifically, the City has long inflated program accomplishments, seriously mismanaged the program, and disregarded a host of corrective recommendations made in the May 2010 review. The follow-up also reports that, despite the best efforts of Office of Compliance employees, the MWBE program is still afflicted with widespread fraud, abuse, and mismanagement. “

During the past year, the IGO has issued 16 summary reports of investigations of fraud, abuse and mismanagement in the MWBE program resulting in a number of proposed disbarments, decertifications and the City had to report downward revisions to its previously reported participation figures. There have been three new federal indictments that occurred from grand jury investigations in which the IGO has partnered with federal law enforcement agencies and the United States Attorney’s Office.

Even with all that success “catching the bad guys,” the Inspector General said the program is still fraught with “widespread fraud, abuse, and mismanagement.“ Inspector General Joe Ferguson reiterated that thought by saying, “Since the original report’s release, there was little positive change in either the MWBE program’s administration or performance.”

The report points out that because of all the fraud and abuse, legitimate firms are deprived, “of opportunity and it restricts competition by discouraging firms that do not participate in these schemes. Despite the IGO’s work and several high-profile scandals involving the program, the prior administration did not take action to effect real reform.”

Chicago Mayor Rahm Emanuel has an opportunity here to prove Inspector Freguson is wrong and that he will not be like the “prior administration” and he will take “action to effect real reform.”

Is anyone wiling to bet on the probability of that actually happening?  When a Chicago casino gets built, that’s when we will get the real odds.