The City of Chicago spends millions of taxpayer dollars every year on inspectors general, a post that in the U.S. heralds back to before the Revolutionary War’s Continental Army, and whose local mission today is fighting corruption, fraud and waste in the trenches of municipal government.

In all, there are seven inspectors general (IG) tasked with watching over major institutions such as City Hall, the City Council, city agencies including the park district and public schools, and the Public Building Commission. There’s also a separate state IG that monitors the Chicago Transit Authority (CTA).

City IGs: Racking Up The Results

Since 2012, over 175 workers fired or resigned.

It’s challenging to gauge the full impact of the government watchdogs’ work because only five of the seven city Inspectors General publicly release results in their reports.

A look at available data since 2012 shows:

  • More than 175 employee terminations or resignations.
  • More than seventy employee suspensions.
  • The temporary or permanent disbarment of more than 20 vendors.

Those figures include 90 dismissals or resignations and 11 suspensions at Chicago Public Schools and 34 dismissals or resignations and eight suspensions at City Colleges.

At City Hall, as a result of IG Joseph Ferguson’s probes, there have been 28 dismissals or resignations, more than 40 suspensions and four cases that resulted in criminal investigations by federal authorities.

Of the five IGs who disclose results, only City Council’s Faisal Khan posted no results although he notes his department has dozens of inquiries pending.

Collectively, these IGs produce hundreds of examinations every year. But a Better Government Association review of publicly available reports finds the local IGs’ track record is, at best, mixed when it come to busting Chicago-scale corruption schemes.

Indeed, the IGs collective forte is not uncovering major league fraud or multi-million dollar systemic scams–which city government has a sorry history of producing. Instead, they’ve churned out an abundance of investigations that uncover predominately low-level and often minor infractions involving employee attendance and residency violations, harassment allegations, mismanagement and theft.

While such crackdowns have their place and merit, even the IGs are frustrated with the size and scale of their output. Inspectors general argue they don’t have the legal independence, financial firepower, political backing or are so isolated that they can’t work alongside other IG offices to develop major cases.

undefined“The oversight is partitioned,” Chicago Inspector General Joe Ferguson says. “If someone were designing an effective system this wouldn’t be it.”

With the exception of the IGs at the building commission and Chicago Housing Authority, the city watchdogs release reports, often on a quarterly or annual basis that are available to the public and which summarize completed investigations and the outcomes.

A BGA review of the reports dating back to 2010, uncovered probes and financial audits that led to criminal charges, policy shifts or tighter internal controls. In short, there have been some trophy investigations.

A majority, however, were small in scope and involved rank-and-file employees, a puzzling outcome given Chicago government’s rich record of shady deals and troubled outcomes.

Since 1973, 31 aldermen have been convicted of public corruption, according to a report compiled by University of Illinois at Chicago political science professor Dick Simpson, and countless scandals involving city leaders, vendors and clout heavy employees have bubbled up.

“We’re the most corrupt city in the country,” Simpson says, adding taxpayers can’t afford the cost of public officials’ bad or criminal behavior. “We need every penny we have.”

So it’s fair to ask: Why don’t the IGs have more to show for their efforts?

In some cases, it’s because these watchdogs don’t have the needed political independence or investigative powers.

Other IGs have those tools but lack adequate resources to launch and complete complex or large-scale investigations.

“We could be much more effective with a larger budget and a larger staff,” says James Sullivan, who recently resigned as the CPS IG after serving 12 years.

Sullivan’s office has 17 employees and an annual budget of more than $1.8 million, second only to Ferguson with 54 employees and $5.8 million.

But given the agency’s size—650 schools and 40,000 employees—more manpower and money is needed, he contends.

And because the IG offices are separate and contained within a particular agency, Sullivan or another watchdog can’t share staff or resources with each other.

Basically, it’s every watchdog for his or herself. There’s no uniformity and little cohesion, as evidenced by:

  • Chicago City Colleges inspector general John Gasiorowski is one of only two IGs that lack subpoena power, a critical investigative tool.
  • The CHA’s Elissa Rhee-Lee can issue subpoenas, but only if the public housing agency’s CEO or general counsel approve, putting her in a tricky position if she were to investigate a top official.
  • Maribeth Vander Weele, the inspector general for the Public Building Commission, is the only part-time watchdog. She doesn’t have subpoena power, has only a two-year term—a minimum of four years is considered best practice—and doesn’t release reports to the public, leaving taxpayers with no information about her investigations or findings. Her company has been paid more than $470,000 since December 2012, records show.
  • The Chicago Transit Authority had a full-time, in-house inspector general until the Illinois General Assembly, following the Metra Chairman Phil Pagano financial scandal, tapped the Office of Executive Inspector General for the Agencies of the Illinois Governor in 2011 to oversee CTA, Metra and Pace. The office has a separate transit division with 13 employees and an annual budget that since 2012 has declined 20 percent to $1.6 million, a nominal amount given the massive size of the transit agencies.

Compared to his peers, the obstacles Faisal Khan, the Chicago City Council’s legislative inspector general, faces are more like brick walls, than speed bumps.

faisal khan publicdomain

He can’t initiate his own investigations – there must first be a sworn and signed complaint – and even then he needs a green light from the city’s Board of Ethics.

If that weren’t enough, Khan must notify the target of an investigation within 14 days, even if doing so jeopardizes the probe.

With an annual budget of only $354,000 Khan warns he may run out of money this month, leaving his investigations in limbo. If an emergency cash infusion is needed, he must ask, yes that’s right, his employer: The Chicago City Council. Those are the same legislators he is tasked with investigating.

“When you have to report to the people you oversee, the system falls apart,” says Khan, who has clashed with council members since his appointment in 2011.

Observers say tension between IGs and political leaders can be healthy, a sign that the watchdog is doing his or her job.

Khan has gone public with his demands for greater independence and resources, irritating some aldermen, some of whom are now working on legislation to have the city IG Ferguson oversee the council.

City Council Vs. Inspector General

Grudge Match: Key Chicago Aldermen Seek to Replace Kahn

By Andrew Schroedter/BGA

The Legislative Inspector General has warred with the City Council over his budget, power and even how he’s run the office.

Now, some top council members are working on an ordinance that would give Chicago Inspector General Joseph Ferguson the power to police the aldermen and their staffs.

Ald. Ameya Pawar (47th) recently told Chicago Tonight he hopes the ordinance passes by the end of the year.

That, of course, would mean the end of Khan.

The fact that aldermen are even weighing this move shows how testy things have gotten with Khan, the first ever-legislative IG who was hired in 2011. Council members have previously fought efforts to have Ferguson oversee their activities.

But from the beginning the council has capped his investigative powers.

He has limited independence and a fraction of Ferguson’s budget. His greatest impediment may be a requirement that he obtain a signed and sworn complaint to initiate an investigation – a burdensome mandate that no other city IG faces.

Most recently, Ald. Pat O’Connor (40th) spearheaded a bill that gave the Board of Ethics – and not Khan – the power to probe aldermanic campaign fund issues. It passed by a wide margin, even as news reports revealed Khan was probing allegations of campaign finance misconduct involving O’Connor.

It’s not clear what if any hurdles Ferguson would face if given the power to investigate aldermen. Could be pursue anonymous complaints? Probe campaign finance issues? What about the Board of Ethics? Would he need their permission to kick-start a probe?

That remains to be seen, though it’s hard to believe the outspoken and hard-charging Ferguson would accept many limitations.

Ferguson, meanwhile, has clashed with former Mayor Richard Daley and now Mayor Rahm Emanuel over issues, including his budget and the city watchdog’s desire to enforce his own subpoenas.

The subpoena battle began when Ferguson started investigating a no-bid contract awarded by the Daley administration. The former mayor, however, refused to turn over the documents, resulting in a legal skirmish that has continued under Emanuel. It concluded last year when the Illinois Supreme Court unanimously ruled that Ferguson doesn’t have that statutory authority, and it appears unlikely that Emanuel will do anything legislatively to change that situation.

In 2011, Business and Professional People for the Public Interest, a public interest law and policy center, released a report that looked at five IG offices in Illinois, including Ferguson and Khan’s.

The review concluded that IGs can be effective corruption busters but only if the offices have sufficient power. Some of the recommended best practices include tools that Ferguson, Khan and others are demanding, such as:

  • Investigatory powers. Initiate investigations with unfettered access to premises, computers and records, along with the issuance and enforcement of subpoenas when needed.
  • Independence. Greater control of IG resources and budgets, job protection from political retaliation and terms of at least five years.
  • Enforcement Powers. Ability to refer cases to law enforcement, power to compel agency heads to respond to IG recommendations and if applicable explain why no action was taken.

Another idea some observers point to is the creation of a centralized inspector general office, modeled on the one in New York, that oversees City Hall, council members and the sister agencies, giving the watchdogs uniform power, greater independence and control of resources.

The New York Department of Investigations has been in existence for 140 years and was formed in the 1870s after infamous politico William “Boss” Tweed bilked millions of dollars from the city. An independent agency with an annual budget of $21 million, the department investigates elected officials, employees, and contractors — and needs no permission to do so.

The department has complete access to city computers and records, and can issue and enforce its own subpoenas. More importantly, at least where Chicago is concerned, the commissioner can direct resources where the need is greatest, meaning a sweeping investigation isn’t mothballed because of a lack of manpower.

A centralized office is “much more efficient because there’s shared resources,” says Mark Peters, the New York department’s commissioner. “We have tremendous independence. There’s no one in city government that has a right to object to what we’re doing.”

Mission Unaccomplished

Dorothy Brown, Feeling Heat

New Watchdog, New Conflicts

Outside of Ferguson and Khan most city IGs were lukewarm when asked about importing the New York model to Chicago, worrying that it could give one person too much power.

“There is a grave concern there,” says Alison Perona, Chicago Park District inspector general.

Before he became mayor in May 2011, Emanuel appeared at a press conference with Ferguson’s predecessor David Hoffman to present a list of ethics reforms he planned to enact if elected. The proposals included beefing up Ferguson’s budget and broadening his powers to include oversight of the park district and public buildings. But those changes never happened, taking a back seat, perhaps, to more pressing matters involving street violence, budget issues and pension reform.

The Emanuel Administration declined to comment on this report.

This story was written and reported by the Better Government Association’s Andrew Schroedter. He can be reached at (312) 821-9035 or