Jay Doherty and the City Club of Chicago Under Fire

CLUB JAY: Has the powerful lobbyist Jay Doherty, the president of the City Club of Chicago, transformed that venerable organization into a means to enrich his clients—and himself? The Illinois attorney general is investigating. But the answer may not be so black and white

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Jay Doherty, his clients, and the City Club speakers

On April 8, 2009, a capacity crowd crammed into the downtown Maggiano’s for a City Club of Chicago luncheon featuring Lisa Madigan, the attorney general of Illinois. About 40 times a year, the restaurant’s banquet hall serves as a gathering place for City Club—a privileged cocoon for heavy-hitting politicos and prominent business leaders, who have been meeting under the organization’s aegis since 1903.

On this particular afternoon, Madigan told the rapt audience that she wanted to talk about two things: public corruption and the foreclosure crisis. But before that, she thanked the stocky man with the ruddy face sitting at the table closest to the podium: Jay Doherty, the longtime City Club president, a political insider and a powerful lobbyist—and someone Madigan’s office was, and still is, investigating.

Two months earlier, a whistleblower had approached Madigan’s office with allegations that Doherty had for years been running his lobbying business out of the Michigan Avenue office of the City Club. Later the whistleblower would also allege that Doherty used the club’s office for political projects—including a behind-the-scenes effort to help his close friend Christopher Kennedy run for the U.S. Senate.

This article appears in the June 2012 issue of Chicago, on newsstands May 17. Also in the magazine:
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If Madigan felt uneasy about appearing at a City Club event while her office’s investigation of Doherty was underway, she didn’t show it. Before and after her speech, she cracked jokes, smiled for pictures, and bantered with Doherty and Paul Green, a member of the club’s board (and a Roosevelt University professor) who often emcees the luncheons. Watching all this was Kathy Posner, a retired PR doyenne and a member of the City Club’s board since the mid-1990s. She was the person who had blown the whistle on Doherty.

Taking on a man like him is not for the faint of heart. Doherty is rich, powerful, and widely regarded as a hero who rescued the City Club from near death. Since becoming president in 1994, he has boosted the club’s membership to more than 1,200—its highest level in nearly 60 years—and transformed the luncheon forums into “a required stop for most anyone who wants to win office around here,” as The New York Times observed in 2010.

Internal documents from the City Club provided to Chicago by Posner, together with interviews with three of the club’s former executive directors, suggest that Doherty’s roles overlapped to the point where his outside lobbying activities were often indistinguishable from the club’s operations. The documents—which Posner also delivered to the attorney general and which include City Club e-mails, minutes of board meetings, and correspondence and memos between Doherty and his outside clients—show that Doherty regularly used the nonprofit club’s office, small staff, and database to benefit himself and his business.

“My concern was for the club,” says Posner. “I didn’t care where Jay was making his money; I just thought it shouldn’t be made through the use of City Club.”

Furthermore, Chicago’s analysis of the organization’s luncheon forums from 2007 through 2011 shows that at least 41 percent of the speakers were targets of Doherty’s lobbying efforts. “Jay would get people to speak who could be beneficial to his clients,” says Dave Cameron, the club’s executive director from 2006 to 2008. “Then his clients would come to City Club. After lunch they’d all be sitting at the head table with Jay, and they’d be presumably networking, making deals and stuff.”

Such access benefited Doherty’s lobbying firm, Jay D. Doherty & Associates, which consists of Doherty and one or two part-time assistants and, according to his filings with the Chicago Board of Ethics, is headquartered in his Gold Coast condo. In 2010 (the last year for which complete figures are available), the company was the third-highest-paid lobbying firm in the city, collecting $771,750 in fees from clients including Commonwealth Edison, Potbelly Sandwich Company, and several engineering firms. Documents show that Doherty also made money lobbying state officials and from his work as a consultant and fundraiser, income he is not required to disclose.

Doherty, 58, did not respond to repeated requests for comment. Michael Hayes Sr., a lawyer at K&L Gates who is representing the City Club, says that the club’s board looked into the allegations raised with the attorney general’s office and concluded that they largely lacked merit. In a statement, Paul Green, now the club’s chairman, said, in part, “We are proud of our programming, our president, and our entire board.” A spokeswoman for Madigan’s office told Chicago that its investigation remains active, though she would give no details.

Doherty’s alleged activities present some tricky questions. Exploring murky legal and ethical areas, investigators must decide whether Doherty personally profited from his position at the City Club. They must also determine whether Doherty’s actions were harmful to the organization: Did he use the club to enhance his lobbying business, and if so, did it actually cost the club anything? In fact, the club’s board would essentially claim the question was moot: Any benefit Doherty enjoyed from his ties to the organization, it said, was far outweighed by the many ways he had enhanced its prestige and its bottom line.

But this isn’t just the story of a powerful man being investigated for claims made by a whistleblower. It’s the tale of an august Chicago nonprofit institution—one founded specifically to examine and fix public policy problems—that has drifted from its original mission. Beneath the City Club’s veneer of lofty purpose, critics say, it is now little more than a setting for political cronies, lobbyists, and business insiders seeking lucrative public contracts. That’s a charge that should trouble all Chicagoans. Yes, Doherty saved the City Club—but at what cost?

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Photograph: Michael Jarecki

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comments
2 years ago
Posted by Kathy Posner

David Bernstein did an increidble job of reporting and the response to me has been totally supportive. I know I did the right thing.

2 years ago
Posted by Joe Northside

"What's taking so long?," the article asks.
Don't be naive. Lisa only goes after baby crib manufacturers or enemies of daddy who the feds have already indicted. Everyone else is clearly off limits.

2 years ago
Posted by Mark B.

Jay Doherty is one of the finest, most honorable people I have ever known.

2 years ago
Posted by Tparachute

Enjoyed reading this article, but where's the scandal?

A civic organization might have shared an email list?
Less than half of the people who gave speeches here might be able to benefit from the person who asked them to give the speech?

Is this what Chicago magazine calls a smoking gun?

2 years ago
Posted by mwp

I was a member of the City Club and gave it up when I finally realized it is an old boys club. It certainly is not the "fair and impartial" organization they claim it is.

2 years ago
Posted by HonestThomas

What the article does not mention is the years at Marquette University, where suspicious letters to the school newspaper, praising Mr. Doherty as a wonderful class president, turned out to be completely fraudulent, written by, hmmmm, I wonder.
It is very hard to take this person seriously. And I pity those who cannot see the self-serving motives in others, as well as in themselves.

2 years ago
Posted by JL

"Suspicious letters to a school newspaper" praising Doherty?!
When was he there? like 40 years ago?

This is what you got on the guy?
Get over it.

2 years ago
Posted by POSNER IS FRIEND OF CHI MAG

Why not do a story on Chicago Magazine's Board of Director contacts and how they use subscriber data, e-mails and other lists as a profit center by selling confidential information for their own profit. Further, what about Ms. Posner's great relationships with people in the Chicago Magazine hierarchy? Chicago Magazine has come far from it's mission in covering a non-story like this to help a long time friend of the Chicago magazine hierarchy --- truly editorial hypocrisy!

2 years ago
Posted by Karen

Sounds like nothing more than vindictiveness and sour grapes to me.

2 years ago
Posted by murphy44

Jay Doherty donates a kidney, accepts no salary and donates some of his hard earned money to the Club when it is in dire need. Jay is a generous and engaging person.Kathy Posner is his opposite. i am certain she is not missed and she still has both her kidneys.

2 years ago
Posted by soulmate68

Jay Doherty is one of THE MOST GENEROUS and UPSTANDING citizens I know in this great city. He is the first person to help any friend in need. This article is a bunch of nonsense coming from a very lonely, lowly and obviously disgruntled individual(s). Chicago Social Magazine is obviously desperate for publicity. Very sad that they feel the need to print an article like this in an attempt to get people to read their publication. A very low blow. Shame on Chicago Social. Shame on the writer of this article.

2 years ago
Posted by Karen

SOULMATE68- I agree with your comments; Posner does sound like a miserable person, but it's not Chicago Social, it's Chicago Magazine.

2 years ago
Posted by kmw

Sounds like David Bernstein and Kathy Posner both need to get a life and end the jealousy they harbor toward successful, hard-working people. How is this even newsworthy? Chicago Magazine is obviously on the decline.

2 years ago
Posted by GM

If Jay was a prosperous North Shore executive he would be praised in your artical for doing a great job of networking.

2 years ago
Posted by sarah t

Why is this article being published...this is not credible or newsworthy? Chicago magazine must really be hurting if they think this is a real story. This Posner person seems like a real jerk and so must Bernstein be for thinking he's a writer.

2 years ago
Posted by Irving Feinglass

So Posner gathers Mr. Doherty's files, correspondence, etc. and turns them over to the attorney general? And then to the magazine? Hope she is proud of herself. To besmirch this man in this fashion is appalling.

2 years ago
Posted by kmw

Irving Feinglass, you are right. I hope Mr. Doherty goes after that pathetic Posner.

2 years ago
Posted by webgirl

Way to go Jay Doherty! Running a business using a charity as an office, for free, sounds like a great way to cut down on my overhead! I wish I would have known that I could have gotten away with it too. I could more than doubled my profits and skipped on the hassle of all that payroll, taxes, and petty stuff.

Really wish Jay would have told me how easy it is to get away with!

2 years ago
Posted by LindaChicago

Kathy Posner is one of the most generous and civic minded people in this great city. She sits on dozens of boards and is extraordinarily philanthropic. She has begun programs for disadvantaged children in this city that have been successful for decades. When she sees something "dishonest" going on, she will try to right it. That is what she is doing here. It is not just a matter of "sharing lists" but also of using a not-for-progit office FOR PROFIT. That is not right! And using gift certificates for your own use for tens of thousands of dollars? Is that right. Stop sucking up to the powerful and praise the person who stands up for justice!!!

2 years ago
Posted by webgirl

All kidding aside.
Some of the earlier comments are stating that because they are appreciative of the success of City Club, Jay Doherty should be able to use the club anyway he sees fit. Nope, this is not legal. Using this logic I should be able to use several political offices for my own personal business. After all, I helped raise more than 75 million dollars last year and the political groups I work for love me and want me to continue to be happy. Woops, it is still illegal. I need to do run my private for-profit business separately.

The problem comes in where: he has not paid for the gifts, staffing and services which he and his company has benefitted from financially. The charity has paid for it using tax free dollars

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