Today, the City of Chicago Office of Inspector General (OIG) released a review of World Business Chicago’s (WBC) involvement in the City’s approval of Tax Increment Financing (TIF) proposals.
The OIG report found that WBC staff advocated for the approval of significant TIF subsidies for two major corporations–CME Group and United Air Lines–despite the fact that the companies’ executives were then serving on WBC’s board of directors. WBC is a City-funded economic development organization. As part of the TIF approval process, WBC routinely submits to the City letters in support of corporations applying for TIF funds. The City, in turn, relies on WBC’s letters as evidence of community support for the proposed TIF projects.
The OIG has determined that WBC lacks an effective conflicts of interest policy necessary to ensure the integrity of the organization’s recommendations to the City. Additionally, the OIG further concludes that the City should not rely on WBC’s letters as evidence of community support for TIF projects because:
- WBC is dependent upon the City for the majority of its funding and is therefore not an independent organization
- WBC engages in minimal analysis of the merits of the TIF proposals for which it advocates
- WBC’s corporate directors each owe a fiduciary duty to their own companies, creating an apparent conflict of interest in WBC’s evaluation of TIF proposals
Given the persistent concerns regarding transparency in the City’s TIF program, the OIG recommends that the Office of Budget and Management (OBM) require WBC to adopt a rigorous conflict of interest policy. This policy should require WBC to disclose potential conflicts when making recommendations for City action-including the approval of TIF funds in which its employees, volunteers, officers, or directors have a personal interest.