The head of a politically powerful janitors’ union on Tuesday renewed calls for Mayor Rahm Emanuel to cancel a new cleaning contract at O’Hare Airport that could be worth almost $100 million.
Tom Balanoff, president of Service Employees International Union Local 1, alleged United Maintenance Co. Inc. violated the city’s rule requiring bidders for city business to provide officials with “current” information on their ownership.
Balanoff’s call followed a Chicago Sun-Times report that United executives took a year to update their initial report to the city and reveal how president and CEO Richard Simon had sold a 50 percent stake in the South Loop firm to a private-equity fund. By that time, United had landed the O’Hare deal.
“This is a serious deception,” Balanoff told reporters outside Emanuel’s office. “It’s important to know who owns these companies. We all know the history of Chicago. These [rules] were put in place to avoid conflicts of interest.”
Emanuel aides acknowledge Simon sold a 50 percent stake in United’s holding company to Loop-based Invision Capital I LP in December 2011 but did not inform the city of the ownership change until last month.
City purchasing rules dictate that economic-disclosure statements from bidders “must be kept current.” Failing to do so can result in the city voiding contracts.
But in a statement, the mayor’s office said “the city is not required to take any action” against companies that don’t file updated disclosures.
Emanuel spokeswoman Kathleen Strand told the Sun-Times administration officials believe United’s one-year delay in bringing its ownership disclosures current was an unintentional oversight.
Strand said the O’Hare contract was United’s first deal with the city. “So they’re not old hands” at filing the disclosures, she said.
Simon had been described as the firm’s sole owner when United first bid for the O’Hare deal in September 2011. The disclosure document submitted then was the only publicly filed record of United’s ownership until after the Emanuel administration awarded the $99.4 million contract on Oct. 31. The deal went into effect a month ago.
The statement from Emanuel’s office Tuesday also accused union leaders of a “campaign to smear the mayor.” The service employees’ union, which was neutral in the 2011 election that Emanuel won, has alleged for months that the United deal would cost its members jobs.
City officials added that background checks on “the current United owners” turned up no reason not to give them the airport custodial work.
But it’s unclear whether city officials know the identities of any of the investors who own the part of United that Simon sold.
In their disclosures filed with the city, Invision executives said none of the firm’s owners hold a stake of more than 7.5 percent. That’s the city’s minimum standard for disclosing a company’s owners.
Invision listed a general partner, Robert Castillo, in its filing with the city last month. Castillo has not returned repeated phone calls.
A spokesman for United declined comment Tuesday.