Financing the Fifth: Where Alderman Hairston’s Campaign Cash Comes From

Every Chicago politician wants to be Leon Despres. The “Conscience of the City” retired from public life in 1975 but remains the most cited role model in candidate questionnaires. The former Fifth Ward alderman, launched by the hotbed of Hyde Park progressivism into City Council in 1955, championed the changing national attitude towards civil rights, the environment, and fair housing long before his other aldermen were ready for reform. Often finding himself on the losing side of 49-1 votes, Despres made loud every objection he had to the regime of Mayor Richard J Daley even as his microphone was cut off. The clean government crusader famously wouldn’t take more than even $10 for lunch.

What about $1,849,859?

That’s the amount Leslie Hairston, incumbent alderman of the Fifth Ward, has raised since she announced her first campaign over twenty years ago. But one of her first donations? Despres, who gave her $300 in 1998. If elected tomorrow, Hairston—who was endorsed by Despres in every election until his passing in 2009 and who she calls her “mentor”—will displace him as the Fifth Ward’s longest serving alderman. Certainly, the nature of fundraising and campaigning has changed since the 1960s, but the question of money’s role in politics still remains.

The following is a close analysis of Alderman Hairston’s fundraising from 1998-2018. For the purposes of this story, only itemized contributions above $150 were considered as they have attributed names and addresses. Campaigns are not required to disclose the names and addresses of donors contributing below this amount.

Alderman Hairston’s fundraising from inside (blue) and outside (orange) the Fifth Ward from 1998-2018

In 1999, Hairston forced the incumbent Fifth Ward Alderman Barbara Holt into a runoff. She alleged that Holt had been “non-responsive” and that the ward needed an “independent thinker” as its representative. The centerpiece of her campaign was how Holt mishandled the sale of Jeffery Plaza to a pair of developers without properly informing the public. That year is also the only year in Hairston’s twenty-year tenure when she raised more money inside the ward than outside. Fifty-three percent of her donations that year came from constituents. Today, the average is 18%.

Alderman Hairston’s fundraising totals from 1998-2018 by region

On the whole, over 60% of Hairston’s funds come from the other 49 wards. Around twelve percent of her donors are outside the city limits in Illinois and nine percent are in other states. Hairston’s largest donors are property developers and real estate investors. Their industry accounts for over 18% of Hairston’s campaign funds. This is closely followed by other politicians and construction companies, which amount to 17% and 16.5% respectively. The last outlying industry is law firms, which mainly specialize in land use and contracts.

Asked about the amount of money she has received from real estate developers, the construction industry, and corporate attorneys (cumulatively over 40% of her funds), Hairston said, “I’ve built a lot of relationships over the years. I work with a lot of different people. That’s how I’m able to make things happen in the ward and they seem to think I do really good work.” Those who think Hairston does good work often reward her, sometimes in spite of spending caps.

Alderman Hairston’s fundraising totals by industry

City code limits the total amount a contractor doing business or seeking to do business with city government can donate to any particular campaign--$1500/per year/per campaign (“doing business” with the city is defined as receiving over $10,000 in taxpayer money or registering as a lobbyist). Three years ago, one of the last reports published by the City Council’s Legislative Inspector General found that 29 aldermen had taken in around $280,000 in violation of this statute. Once in a while, the violation is obvious and rectified quickly. But what’s far more prevalent--and legal--is skirting this regulation by donating to a candidate from multiple companies under a restricted individual’s control. This technique appears several times in Alderman Hairston’s campaign funds.

SMART Hotels is an Ohio-based developer and property management firm that builds hotels near college campuses. They are responsible for Harper Court (2013) and Sophy Hyde Park (2018). The company received $3.7 million from the 53rd Street TIF (tax increment financing, a specially designated economic relief fund) for opening Harper Court and has continued to receive hundreds of thousands of dollars from city government ever since. Because of these payments SMART Hotels has been considered a city contractor since July 2015. In 2016, the company donated $4,500 over the limit to Alderman Hairston. In 2018, the company gave $1,000 over the limit. City Council was considering a request from SMART Hotels to rezone the property for Sophy Hyde Park in 2016. The 2018 donation came in the same week the hotel opened. In 2017, Hairston acknowledged that a violation had occurred. On June 29, her campaign returned $5,000 to SMART Hotels. One month later, SMART Hotel’s President, Ed Small, donated $2,500 back to Hairston’s account. This money was never returned.

Small’s donation, according to the Chicago Board of Ethics, was legal. The manager of a company “does not violate the Ordinance by making a contribution greater than $1,500 in a single year, unless the manager was reimbursed by the [company] for the contribution.” From the perspective of the Board of Ethics, Ed Small and the company he operates are two separate entities, even if the following year he made another donation, using the company’s business address as his own.

Small was not available for comment to discuss if any reimbursement had taken place.  

MAC Property Management is a New Jersey-based developer that owns over 100 properties in Hyde Park. The company is itself a subsidiary of Antheus Capital, but manages hundreds of companies such as Windermere House LLC and 1644 E 53rd LLC that adopt the name of their locations. All list their address as a small office in Englewood, New Jersey.

Between 2006 and 2018, MAC has used at least 17 different people, buildings, or entities to donate to Alderman Hairston’s campaign. Since February 2012, at least one MAC affiliated entity has been included on the city contractors list. And since 2015, MAC has donated $1500 every year to Hairston’s account while its Director of Community Development, Peter Cassel, and his wife have chipped in an additional $500 in each of those years. Cassel said neither he, his wife, nor any other employee of MAC Property Management had ever been reimbursed by the company for one of these donations.

Alderman Hairston’s relationship with MAC Property Management has been a recurrent target of her opponents’ campaigns. A Freedom of Information Act (FOIA) request for emails from Hairston and her staff about the developer and its leadership since 2006 returned over 13,000 emails. For comparison, a similarly defined FOIA request for discussions about a grocery store since 2012 returned just under 7,000 emails.

Leon Finney, longtime Woodlawn community organizer and social activist, has financially supported Hairston since she became the Fifth Ward’s Alderman. Finney is also a prominent developer, who has earned millions of dollars from the city by providing subsidized housing through the Chicago Housing Authority. A few of his high-rise apartment buildings are in the Fifth Ward. Up until May 2016, Finney’s main company, the Woodlawn Organization, was recognized as a city contractor. However, throughout this time, Finney himself and four other side organizations that he administers donated to Hairston’s campaign. If all of these accounts were understood to operate in conjunction with the Woodlawn Organization, Finney would have exceeded city contractor donation caps in 2007, 2013, and 2014. It’s worth noting that one organization under Finney’s control that donated to Hairston, United Communities of Chicago, sprung up for the 2011 Chicago elections and dissolved the next year—a curious life cycle when examined through the lens of mayoral contributions that year.

Lastly, Larry Huggins, a construction executive and former board member of Metra, has been listed as a city contractor since 2006 (either personally, under one of his two companies, or under a joint company). Huggins is also the landlord for Alderman Hairston’s office space. In 2002, he received $23 million from the city for construction of the Chicago Skyway Bridge. Although using a different address for his company, Riteway Construction Services, Huggins donated in excess of $500 in 2003 and $1000 in 2004. Huggins exceeded the cap in 2007 and 2008 by also donating in his own name.

Reviewing Hairston’s campaign finance records, it is clear this loophole in the city’s campaign finance law is exploited time and again by major donors to the alderman. The question becomes, then, whether these donations affected how Hairston governs.

Alderman Hairston has voted on 28 zoning changes within the Fifth Ward since 2011. 26 passed, and two were held in committee. Property holders or developers for 17 of the 26 properties have donated to Hairston’s campaign. MAC Property Management alone requested rezoning four times. SMART Hotels requested rezoning once.  

Of those 26 City Council votes, all were unanimous. Zoning changes within a ward are often left up to that ward’s alderman in a tradition known as aldermanic prerogative. When a developer needs to change a locale’s zoning to allow for certain projects, they typically come to the alderman for support and guidance. The alderman can help them craft the proposal, write supportive letters to the Chicago Plan Commission, and shepherd the legislation through the Zoning Committee and into City Council. Or, they can make sure it never happens.

“On zoning matters,” Dick Simpson, professor of political science at the University of Illinois at Chicago and former Chicago alderman, said, “the alderman’s view prevails. The business can certainly introduce a zoning change but to get it to pass the City Council or the Zoning Board of Appeals, normally they have to have the alderman’s agreement.”

The legislative future of a zoning change is almost always assured by that ward’s alderman long before it even gets a vote. As a result, according to the City Clerk’s online record, Hairston has never voted against a zoning change request made by any of the previously mentioned companies or the University of Chicago in the Fifth Ward.

Hairston says her governance is reflective of and “generated by the community.” Recently, she reversed course on a community benefits agreement for the Obama Presidential Center after it attracted overwhelming support in a referendum, deciding to endorse an agreement. She has defended her record saying she doesn’t vote to “try to impress somebody. The votes are based on the issues. Period.”

Fifth Ward aldermen and committeemen from 1923-2019. Ald. Barbara Holt was appointed committeeman after Committeeman Joseph Gardner died

In 2000, Hairston became the first Fifth Ward alderman to run for Fifth Ward Democratic Committeeman. She ultimately ran unopposed and has since done so in every election but one. Ward committeemen’s main responsibility is getting out the vote for their party’s candidates. Historically, they were an indispensable element to the city’s political machine. For this reason, certain aldermen had opted not to run for committeeman in order to separate their non-partisan role from the city’s political monopoly.

Dick Simpson was one of those who decided against. However, forty years since his time in City Council, Simpson explains that patronage reforms in the 1980s caused the committeeman position to lose most of its clout. Now, he says, its “biggest influence is in the party slating, particularly for judicial candidates.”

Party slating is a process that occurs every August before an election year. Candidates up and down the ballot present themselves to the 80 members of the Cook County Democratic Party central committee seeking their endorsement in the next year’s primary. This endorsement is crucial for candidates at the bottom of the ballot (Metropolitan Water Reclamation District (MWRD) commissioners, Board of Review commissioners, and especially the dozens of judges) as their low name recognition races lend themselves to coattail riding. One report found that “if a candidate was not slated, then s/he had a 5.8% chance of winning the primary. If s/he was slated, those chances increased to 68.4%.” And in a city and county where the vast majority of elected officials are Democrats, the party’s primary is the main election. Once endorsed, candidates are expected to make contributions—committeemen have said upwards of $40,000—to the Party.

Alderman Hairston’s political donations by candidate and group

Hairston laughed when asked if the position had affected her independence. In 2000, Despres himself had even seconded the idea saying that “if Leslie Hairston is interested and feels it’s important, I am certainly willing to support her.” Looking back on her decision to contest the office, Hairston said, “I had always been involved in politics. I had put together an organization. We were still knocking on doors and I thought it was very important that we participate.”

Since 2000, Hairston has received over $18,000 from MWRD and judicial candidates who won the endorsement of the Cook County Democratic Party. The total number of these candidates who have donated is 64. How individual committeemen vote on endorsements is not made public.

Nevertheless, one donating candidate did stand out: Michael Alvarez. Alvarez ran for Metropolitan Water Reclamation District in 2010, won the central committee’s endorsement, and subsequently won the election. Alvarez, while also serving in that role was a registered city lobbyist bound by the $1,500 cap. In 2010, Hairston took an additional $250 from Alvarez’s firm and in 2015 took an additional $1000 from his campaign fund above the cap.

Hairston’s campaign fundraising features multiple instances of contributors threading the needle between what is legally allowed and ethically questionable. However, this issue is not unique to Hairston; it is endemic in Chicago, especially among long-term aldermen. But as Hairston faces her first runoff election as alderman, it begs the question of whether these practices are reflective of her constituents’ values. This question will ultimately be answered tomorrow, by the voters of the Fifth Ward.

NOTE: As of April 1, Calloway has not submitted any quarterly campaign filings so a similar analysis could not be performed. Although he announced his candidacy in November, his campaign committee, “Friends for William Calloway”, was formed in January with an expected first quarterly filing deadline of today.