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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.
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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