Chicago Public Schools probe: Feds seek files on elite nonprofit

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Sunday, April 19, 2015

CHICAGO -- Federal investigators looking into a $20 million no-bid Chicago Public Schools contract have requested records related to a nonprofit group tied to Mayor Rahm Emanuel, Gov. Bruce Rauner and prominent business leaders.

Investigators are seeking documents related to the Chicago Public Education Fund.

The elite group's former chairs include Rauner and U.S. Commerce Secretary Penny Pritzker. Citadel CEO Ken Griffin is on the board. So is Beth Swanson, who formerly was Emanuel's Deputy Chief of Staff for Education.

On Friday, Chicago Schools CEO Barbara Byrd-Bennett took a leave of absence amid the investigation over a no-bid contract that the district awarded to a training academy where she once worked as a consultant.

The training academy, SUPES, was launched with seed money from the nonprofit education fund.

A change in leadership at Chicago Public Schools will take effect Monday as Byrd-Bennett is taking a leave of absence in light of a federal investigation.

School Board President David Vitale announced Friday that fellow board member Jesse Ruiz will act as temporary CEO.

After days in the dark, the ABC7 I-Team has learned new details of the federal investigation, including who authorities are looking at and what they want.

As information about the federal investigation has dribbled out, the I-Team has a gush of details in federal subpoenas served this week on top Chicago Public Schools officials. The subpoenas define a time period covering more than four years and lay out what prosecutors are looking for and names of the subjects of the grand jury case.

Federal authorities have ordered CPS to turn over reams of paperwork connected to the district's $20 million consulting deal with a North Shore firm, including contract records, expense receipts, notes from meetings and other internal documents. SUPES Academy trains CPS teachers and administrators.

Prosecutors demanded CPS' chief legal officer James Bebley to appear before the grand jury last Tuesday. Bebly is seen with CPS' CEO Barbara Byrd-Bennett, who is at the center of the investigation and bridged the relationship between CPS and SUPES, where she herself once worked.

"We have been asked not to comment to the extent that we know something," Vitale said.

According to federal subpoenas, Byrd-Bennett is being joined under scrutiny by three of her top deputies who were also ordered to testify: her chief of staff Sherry Ulery; Tracy Martin, the director of strategic school support services; and Rosemary Herpel, executive director of CPS leadership development.

All four women previously worked together at the Detroit and Cleveland school districts.

Byrd-Bennett is paid $250,000 a year and the three associates she brought in make a minimum of $140,000. U.S. prosecutors are demanding personnel files for all of them.

The feds also have subpoenaed school district records related to an education reform group that at one time financed SUPES training for school district personnel.

Chicago Public Education Fund board members include some major city business players: Commerce Secretary Penny Pritzker and Gov. Bruce Rauner.

The federal investigation of what was behind a no-bid contract with SUPES Academy is just underway. Two members of Barbara Byrd-Bennett's inner circle are to go before the grand jury on Tuesday. Byrd-Bennett herself has not been subpoenaed to testify.

As a rule, the focus of an investigation is not put in front of a grand jury. Those subpoenaed did not respond Friday night to questions from the I-Team.

The Associated Press contributed to this report.