CHICAGO
10/04/2011 05:40 pm ET Updated Dec 04, 2011

Inspector General: Maggie Daley's Non-Profit May Have Received Preferential Treatment

A review of tax increment financing (TIF) public benefits clauses and charitable donations released Tuesday by Inspector General Joe Ferguson alleges that the city may have given preferential treatment to After School Matters, the non-profit founded by former Mayor Richard M. Daley's wife Maggie.

The results of the audit suggest that under Daley, the city required firms receiving TIF subsidies to donate money to certain non-profit groups, and that Maggie Daley's After School Matters program and its subsidy, KidStart, received 59 percent of those agreements, making it "second only to the city itself in the number of mentions," according to the report. The non-profit received $915,000 from at least 16 contributions out of 27 total grant agreements that donated $3.7 million in all.

In a series of interviews with ten TIF-recipient companies, Ferguson reports that nine of them had agreed to make donations to After School Matters. Ferguson writes that all but one of the corporate representatives reported that the city "unilaterally chose the non-profits named in the public benefits clause."

Ferguson's report does not question the value of the work done by After School Matters, but raises concerns that other, equally deserving charities may have been passed over.

“With no internal accountability for the selection of non-profit entities, nor any published guidelines or criteria by which to evaluate programs named in public benefits clauses, the public benefits program remains vulnerable to mismanagement and the appearance of preferential treatment for select charities,” Ferguson wrote.

To prevent future "transparency issues," Ferguson recommended that the city cease naming private entities as recipients of private donations under public benefits clauses, or establish an open process for the selection of eligible beneficiaries and allow TIF recipients to choose the charities they will support to fulfill the conditions for their subsidies.

Read the full report here.

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UPDATE: After School Matters has issued a response to Ferguson's report. As reported by Crain's Chicago Business, the organization states it is "flat-out false" to suggest that TIF recipients were required to donate to them. They say 16 of 73 TIF deals over the last 25 years directly benefitted them. They deemed any reports to the contrary "an insult to the work that former first lady and After School Matters Chair Maggie continues to do."