Chicago Is Poised to Bet Its Fiscal Future on a ‘Clean-Slate’ Candidate

(Bloomberg) -- With Chicago facing gun violence on its streets and looming turmoil in its finances, some in the business community are lining up behind the mayoral candidate they don’t know -- not the one they do.

Former federal prosecutor Lori Lightfoot has deep experience wrestling with the city’s scandal-tarred police department and its struggle to combat crime without violating citizens’ civil rights. But she has never held elective office, and on the other issue threatening Chicago’s future -- its fiscal mess -- she has released few detailed plans.

Yet Lightfoot is widely favored to defeat Cook County Board President Toni Preckwinkle in the April 2 runoff to replace Rahm Emanuel, who opted not to seek re-election.

In one telling example of how the city’s elite appear to be trending toward Lightfoot, she quickly charmed John Canning, chairman of Madison Dearborn Partners LLC, one of the largest private-equity firms in the Midwest. After their first-ever meeting -- a 45-minute conversation two weeks ago -- he was so impressed he wrote out a campaign check for $100,000.

“She’s starting with a really clean slate,” Canning said, praising Lightfoot for lacking any political debts, either to unions or the business community. “She can be fairly objective about how she goes about approaching problems.”

Canning isn’t alone in being won over by Lightfoot, who if elected would be the first black woman, as well as openly gay, mayor of the third-largest U.S. city.

Lightfoot led Preckwinkle by a sweeping 53 percent to 17 percent in a Temkin/Harris poll done in partnership with Crain’s Chicago Business and WTTW, a public-television station. Almost one-third, or 29 percent, of likely voters in the March 18-20 survey said they are still undecided. Democrat Max Temkin, a Lightfoot supporter and co-creator of the game “Cards Against Humanity,” helped oversee the poll.

In the first round of voting in February, Canning and much of the city’s business leadership supported Bill Daley, the son and brother of former mayors who collectively governed Chicago for 43 years. His failure to make the runoff was seen as a rejection of Chicago’s establishment.

Craig Duchossois, chairman and chief executive officer of Chicago-based investment company, Duchossois Group Inc., gave $50,000 to Lightfoot’s campaign on March 8 after donating the same amount to Daley’s campaign in January, according to contributions reported by the Illinois State Board of Elections. Also this month, restaurateur Robert Melman gave $20,000 and both former CEO of LaSalle Bank Norman Bobins and Bradley Tusk, CEO of Tusk Holdings, donated $10,000, the filings said.

Daunting Challenge

No matter who wins next week, the city will have its first black female mayor. And she will face a daunting fiscal dilemma.

Chicago’s contribution to its four big pension funds will nearly double during the next administration, forcing City Hall to allocate another $1 billion by 2023 to cover mandatory payments. The funds were only about 27 percent funded in 2017, according to the city’s most recent annual financial analysis. As costs mount, Chicago is losing population -- particularly African Americans -- marking a sharp contrast to other cities that are seeing a boom.

Preckwinkle, 72, a former Chicago alderman who has led county government since 2010, is backed by some of the largest labor organizations, including the Service Employees International Union and the Chicago Teachers Union.

Lightfoot has never held elective office, but she drew attention for her leadership of the board that oversees the police department. She led an Emanuel-appointed task force that issued a scathing review of the department in the wake of the shooting of an unarmed teenager, Laquan McDonald, by a Chicago policeman. The officer was recently sentenced to nearly seven years in prison.

In a city that follows politics as passionately as it does sports, Lightfoot, 56, is trying to underscore her progressive credentials while also cultivating corporate leaders and politicians. So far, it has worked: She has drawn support from some bold-face business names, former mayoral-race rivals, community activists, as well as endorsements from the Chicago Tribune and Chicago Sun-Times.

The Chicagoland Chamber of Commerce on Wednesday said it was “enthusiastically” endorsing Lightfoot.

“Chicago needs a mayor who will work with businesses to provide a stable environment to help grow the economy, attract new companies and create job opportunities for its citizens in every corner of the city,” said Chamber CEO Jack Lavin.

Blank Slate

Meanwhile, Lightfoot’s lack of a political record is giving backers room to draw their own conclusions about how she would govern.

Lightfoot rejects the notion that she doesn’t have a plan to deal with Chicago’s cash-strapped pension funds. She said she wants to ensure that employees receive the benefits they’ve been promised, cut costs and boost Chicago’s revenue by getting a “fair share” of the funds generated by a state push to introduce a graduated income tax and legalize marijuana and a city-owned casino.

“I have been very specific about a plan by which we both cut costs and make government respect taxpayers’ precious dollars," she said in an emailed statement to Bloomberg. More revenue will be needed but we have to build the case for revenue.”

Preckwinkle supports benefit buyouts for some employees as part of a fiscal fix and would work with the state to pass legalization of marijuana and expansion of gaming “with all revenues dedicated to pension debt stabilization.”

Former Lightfoot rival Willie Wilson, a businessman best known for handing out $100 bills to residents during his campaign, hopes she will lower property taxes and build more affordable housing in low-income neighborhoods. (Wilson won the majority of the city’s predominantly black wards in the first round.)

“She’s sensitive to the cause of the citizens of Chicago -- all citizens -- but particularly to the African-American community and Latino community and why people are moving out of state because of high taxes,” he said.

But another campaign rival-turned-supporter, Paul Vallas, a former city budget director, said he doesn’t think Lightfoot (or Preckwinkle) would rule out a property-tax increase after other fiscal measures are exhausted.

While business leaders worry about Preckwinkle’s union ties, in Lightfoot’s case it’s the lack of any specific fiscal plan that is raising concern. When she met with the editorial board of Crain’s Chicago Business earlier this year, she arrived with a thick binder of proposals.

“But what was quite amazing was there was nothing dedicated -- not one tab -- to finance, to the fiscal situation,” Crain’s editor Ann Dwyer recalled on an episode of a Crain’s podcast. “We said: ‘Well, where’s your plan?’ and she said, ‘Well that’s TBD. Work in progress.”

Crain’s announced Wednesday it would endorse Lightfoot despite her lack of experience, writing that both Lightfoot and Preckwinkle are unprepared to take on "the fiscal monster Emanuel only partly tamed during his tenure."

Still, Lightfoot is "the better of two unsatisfying choices," Crain’s editors wrote. Preckwinkle’s close ties to labor unions raise “serious questions about whether she can and will be tough enough to propose anything the powerful Chicago Teachers Union wouldn’t like, whether it’s lengthening the school day or trying to defuse the city’s pension time bomb.”

Not Entry Level

Lightfoot’s business support is by no means universal. Ariel Investments founder and CEO John W. Rogers Jr. said he’s firmly “on the Toni team” and suggested Lightfoot is ill-prepared to lead.

“This isn’t the job for a novice," said Rogers, who was co-chairman of Barack Obama’s presidential inaugural committee in 2009. "This isn’t an entry-level position.”

Canning, one of Lightfoot’s most prominent business supporters, acknowledged that she would require “a lot of help” to address the city’s fiscal problems.

“She’s going to need to take some tough positions with labor,” he added. But “she’s better-suited at that because most of the unions are supporting Preckwinkle.”

For those living outside Chicago’s booming downtown, crime and strained relations with police officers are a source of resentment and one of the reasons for the departure of African Americans.

Ira Acree, pastor of Greater St. John Bible Church in the Austin neighborhood on the city’s west side, has endorsed Lightfoot because he said her background makes her uniquely qualified to lead what remains one of the country’s most segregated cities.

Calling Lightfoot a “triple minority” -- gay, black and female -- he said. “She understands the struggle," he said. "She’s a breath of fresh air.”

--With assistance from Elizabeth Campbell.

To contact the reporters on this story: Danielle Moran in New York at dmoran21@bloomberg.net;Kim Chipman in Chicago at kchipman@bloomberg.net

To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, William Selway

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