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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Top five highest-paid lobbying firms in Chicago (2010)
NOTE: Money earned from lobbying city officials only
SOURCE: Chicago Board of Ethics

In October 2009, the board’s investigative committee submitted a report to the attorney general’s office that concluded there was “no intent either by or for [Doherty] to misuse or personally benefit from the City Club resources.” While it was common practice for Doherty to do both of his jobs from the City Club’s office, the committee found little overlap.

What about Doherty’s use of the club’s office for political work for Kennedy? The committee submitted a signed affidavit from Lanctot stating that he worked out of the City Club for only a few hours and did nothing with the club’s database. And the redemption of $60,000 worth of Lettuce gift certificates from 2005 to 2009? The club’s outside auditor concluded that their use was “not material” to the City Club’s overall financial picture.

The board passed a separate resolution declaring that the certificates had been used “for the benefit of the City Club” and that the club would not be “seeking further accounting or reimbursement.”

But Chicago’s investigation raises additional questions. For example, numerous internal e-mails show that Doherty often directed City Club employees to input or transfer data into various databases related to his outside work. Screen shots from Doherty’s computer indicate that Doherty kept hundreds of electronic files at the club’s office tied to his lobbying, consulting, and fundraising. Those files include e-mails that Doherty sent from his City Club account to Richard Durbin and Michael Madigan pushing for Kennedy to be appointed to the Senate seat vacated by Barack Obama.

Then there are the committee’s interviews of former staffers. Another executive director who was questioned by the committee (and who also requested anonymity) says she wasn’t made aware that she was being interviewed for a formal investigation. Dave Cameron acknowledges speaking to Hayes but derides the interview as a sham. “It felt like one long, not-so-subtle attempt to twist everything I was saying and make it sound like I was agreeing with Jay,” he says.

Related:

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Jay Doherty, his clients, and the City Club speakers

“He didn’t substantiate at all the allegations that were made,” responds Hayes, who says that Cameron declined an invitation for a second interview.

By now, the board had moved to reduce its own size from 17 to 15 members. Hayes says that the club felt the smaller number would make for a more engaged group. But Posner says that everyone knew one board member, the former state lawmaker Judy Erwin, intended to depart. That left 16 members. On December 16, 2009, the board voted to retain all of them—except Posner.

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It has been more than three years since the attorney general’s investigation of Doherty began. What’s taking so long? Does Lisa Madigan’s friendship with Doherty and other members of the City Club—where Madigan spoke five times between 2003 and 2009—have something to do with what Posner perceives as a lack of action? Madigan’s spokeswoman, Natalie Bauer, adamantly denies it. She points out that Madigan has declined 22 separate invitations to speak at the club over the last three years. As for Madigan’s speech at that club luncheon in April 2009, two months after the Doherty investigation began, she explains, “This was a prior commitment, and she fulfilled it.”

Bauer adds that these sorts of investigations take time and it can be difficult to prove wrongdoing. For example, investigators must determine whether Doherty’s lobbying activities harmed the club. Remember, City Club board members said that having a prominent and successful president helped the organization, even if Doherty also benefited.

There are other gray areas here. Some might ask, What’s wrong with using a leadership position in a club to help your business? In Chicago, that’s not unethical—it’s smart! What’s more, it’s not like the Doherty-era City Club hasn’t done anything for Chicago. Come election time, it cosponsors TV debates featuring the candidates for top office, thereby helping voters make informed decisions. And the information-sharing and networking opportunities it provides arguably help keep the city’s wheels turning smoothly.

Though the investigation drags on, the club’s board, under the AG’s prodding, made some changes. It instituted tougher employee and board guidelines and now tracks the use of gift certificates and comped lunches. The president is required to reimburse the club for use of office equipment. There’s even a new whistleblower policy that requires club employees to report any “questionable” behavior and protects them from retaliation—though the ultimate arbiter on these matters remains the club’s president and his allies. (The new policy is of little consolation to Posner, who hasn’t attended a club lunch in more than two years. “City Club was a huge, huge part of my life,” she says. “It put me in a position of some civic prominence, and I lost all that.”)

Those changes are positive, to be sure. But the club does not appear to have made what some say would be the most positive change of all: rededicating itself to the reformist mission laid out by its founders. “I was hopeful that the organization would start doing some good things again, but there was limited enthusiasm,” says a former executive director. “I got the sense that real change was going to have to come from Jay if it was going to come at all.”
 

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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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