Bloomberg News

Emanuel Fights Sagging Chicago Polls With CEO Donations

July 21, 2014

Emanuel Fights Sagging Chicago Polls With Fundraising Juggernaut

Chicago Mayor Rahm Emanuel arrives for a National Night Out event in Douglas Park on Aug. 6, 2013 in Chicago. Photographer: Scott Olson/Getty Images

No one in Chicago is talking these days about Rahm Emanuel running for president.

More than three years after President Barack Obama’s former chief of staff cruised into City Hall, they’re instead asking if the middle finger-flipping mayor and legendary political tactician just might fail to win re-election in the nation’s third-most populous city.

Chicagoans who chose two generations of workaday Daleys to lead them are, at the moment, not fond of the flashier Emanuel, recent polls show. The first-term, 54-year-old mayor faces the prospect of a February 2015 challenge from Karen Lewis, the Chicago Teachers Union president who faced him down in a school strike two years ago and is every bit as combative as he is.

He’s turning to his best defense and most storied talent: raising political cash.

“Fundraising against Mayor Emanuel is like playing cello against Yo-Yo Ma,” said Ben LaBolt, who worked for Emanuel at the White House and during his first mayoral campaign. “It’s how he started in politics, and he has built countless trusted relationships with donors over the years.”

Those connections and his ability to tap them also may be his greatest liability, reinforcing an image of a mayor closer to the elite than to the neighborhoods.

Already, six-figure donations have poured in from a who’s who of Chicago business and finance to a newly formed political action committee separate from Emanuel’s campaign fund, according to filings with the Illinois State Board of Elections.

‘Mayor 1%’

Hedge fund executive Kenneth Griffin, founder and chief executive officer of Citadel Advisors LLC, has given $150,000, as has Eric Lefkofsky, co-founder of Groupon Inc. (GRPN:US), the e-commerce company. So did Michael J. Sacks, chief executive officer of Chicago-based Grosvenor Capital Management and someone Emanuel appointed as vice chairman of the city’s economic development arm.

Emanuel, a former congressman who also served as an adviser to President Bill Clinton, rejects the perception summed up in the title of a 2013 book, “Mayor 1%,” by journalist Kari Lydersen. In remarks to reporters on July 15, the mayor said raising the city’s minimum wage to $13 an hour, phasing it in over several years, is a priority.

“He’s fighting for one of the highest minimum wages in the country,” said Pete Giangreco, spokesman for the Emanuel campaign. “You’ve got a mayor who has come out for the minimum wage, for immigration reform and for making sure that we are doing the things to help make ends meet for people.”

Gun Violence

At his July 15 appearance at a southwest side high school, Emanuel batted away questions about Lewis’s potential candidacy and his drop in the polls.

“There will be a time for the campaign,” he said. “The issues facing the City of Chicago are very serious.”

Indeed. Though the city’s homicide total last year was the lowest in almost five decades, gun violence persists in poor neighborhoods and shootings are up from 2013. Eighty-two people were shot during the Fourth of July weekend alone, and an 11-year-old girl was fatally struck by a stray bullet July 18 as she attended a sleepover at a friend's home.

While “Star Wars” creator George Lucas announced plans June 24 to build his art and memorabilia museum on the lakefront, citizen anger over last year’s closing of 49 public elementary schools lingers.

Tourists pour into downtown’s 10-year-old Millennium Park, the city’s playground of gardens and postmodern architecture, and Navy Pier, which lures 9 million visitors a year. And unemployment was 8.4 percent in May, down from 10.6 percent a year ago. Yet Chicago’s solvency is threatened by pension debts that Emanuel inherited from his predecessor, Richard M. Daley, and the almost unavoidable solution is higher property taxes.

Fiscal Threat

The fiscal threat appeared to grow July 3 when the Illinois Supreme Court ruled the state’s constitution prevents the reduction of contributions to retiree health care. A week later, Moody’s Investors Service said the decision was a negative credit factor for the state and city, as the legislature’s recently approved plan to stabilize the retirement funds relies on benefit cuts.

“It seems it’s going in the wrong direction, the city, the powers that be,” Emily Brown, 26, who voted for Emanuel in 2011, said in an interview in the north side Lakeview neighborhood. “There doesn’t really seem to be a whole lot of ownership for things that are going wrong. His office is pretty good with making things look like they’re going good when they’re not.”

Unhappy Voters

Voter unhappiness was reflected in a poll published July 14 in the Chicago Sun-Times, showing Emanuel losing to Lewis, 45 percent to 36 percent. A survey released the same day by the liberal advocacy group MoveOn.org, which supported Obama’s campaigns, said only 15 percent of the group’s 75,000 members in the city support Emanuel’s re-election.

“When it comes to public education, when it comes to being too close to corporate interests, when it comes to not tackling crime in a way that supports folks at the neighborhood level, progressives very much see him as being on the wrong side,” said Ilya Sheyman, the New York-based executive director of MoveOn.org’s political action committee.

In Chicago, though, mayoral challengers can usually expect to be crushed under the weight of the incumbent’s connections and, as important, money. Toni Preckwinkle, the president of the Cook County Board who held a 24-point lead over Emanuel in the Sun-Times poll, withdrew her name as a potential mayoral candidate the day after it was released.

‘Liar, Bully’

Lewis, who hasn’t declared she’s running, is a 61-year-old Dartmouth College graduate and former public school chemistry teacher who led the 2012 strike of 30,000 teachers, the first in the city in 25 years. She clashed with Emanuel, calling him, among other things, “a liar and a bully.”

In a 2013 speech to the City Club of Chicago, Lewis called for taxing suburban commuters and creating a city income tax. She said her union opposes “those who are in power, many of whom have never stepped foot in a classroom and inhabit editorial boards or make millions on the top levels of corporate-owned skyscrapers or promulgate in the halls of our legislative bodies.”

It was a thinly veiled reference to Emanuel, who worked for three years as an investment banker before going to Congress and then back to the White House as Obama’s chief of staff.

As of the end of March, Emanuel reported about $7.4 million in his campaign war chest, and enjoys the support of a recently created super-PAC -- Chicago Forward. Like other super-PACs, it can gather and spend unlimited amounts from corporations, unions and individuals as long as there’s no coordination with the candidate.

Election Tool

The money it collects offers a potential tool to reward loyalty to Emanuel among aldermanic candidates in next year’s elections in Chicago’s 50 wards -- or punish those inclined to support a mayoral rival. The PAC raised $1.3 million through July 10, its first three weeks of operation, records show.

By comparison, Daley spent $4.6 million in 2007 to defeat two opponents.

Cultivated over a quarter century in politics, Emanuel’s longstanding relationships with the nation’s top Democratic donors were built working for Clinton and as the leader of the Democratic Congressional Campaign Committee in 2006 when it recaptured the majority in the U.S. House of Representatives.

In his first mayoral bid, Emanuel leveraged those connections to raise more than $12 million from such people as then-Apple Inc. (AAPL:US) Chief Executive Officer Steve Jobs and David Geffen, co-founder of DreamWorks SKG. His fundraising success from big names fueled suggestions that he was a celebrity candidate who wasn’t as closely tied to the city’s neighborhoods.

White House

No sooner had Emanuel taken office in May 2011 than media-driven speculation boiled up -- and was always denied -- about the former congressman eventually running for president. In a 2012 interview with Bloomberg News, Emanuel smiled and extended a middle finger to a reporter when asked about a possible White House bid.

On the streets of Chicago, presidential speculation has given way to more immediate, provincial concerns. The mayoral election is seven months away, a political eternity yet soon enough for Jonathan Goldthwaite, 24, a student and part-time theater production assistant, to conclude he’s not exactly thrilled by a second Emanuel term.

“Sometimes in politics it’s like the lesser of two evils,” Goldthwaite said, “and I don’t feel good about either choice.”

To contact the reporters on this story: John McCormick in Chicago at jmccormick16@bloomberg.net; Tim Jones in Chicago at tjones58@bloomberg.net; Elizabeth Campbell in Chicago at ecampbell14@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net Flynn McRoberts


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