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.

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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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