Gov. Pat Quinn's administration has halted state fund for a large charter school operator, saying it violated the terms of a $98 million grant when failed to disclose that it had hired for construction projects in Chicago two companies owned by the brothers of one of the operator's top executives.
The Chicago Sun-Times reported Friday that it had obtained a letter in which the general counsel for a state agency notified the United Neighborhood Organization that it had cut off funding.
"We believe that UNO's failure to notify the Department of Commerce and Economic Opportunity of an appearance of a conflict of interest arising from the familial relationship between a senior UNO official and two contractors hired to perform work with grant funds constituted a violation of ... the grant agreements," wrote Charles M. Biggam, the general counsel for the agency, to Juan Rangel, UNO's chief executive officer.
Rangel, the head of the influential organization who also co-chaired Rahm Emanuel's successful 2011 Chicago mayoral campaign, told the paper that UNO was "working ... to address the relevant issues."
UNO executive Miguel d'Escoto resigned in February after the Sun-Times first reported that the two companies owned by his brothers had been hired to do construction work with state grant money. On Friday, the paper said the two companies have been paid a total of $8.5 million.
UNO suspended doing business with D'Escoto Inc., which is owned by Federico d'Escoto, in February but has continued to use Rodrigo d'Escoto's company, Reflection Window, the newspaper reported.
UNO, which has received nearly $55 million of the $98 million grant for school construction projects, is in the process of completing the construction of a charter high school on the city's South Side that will be called the UNO Soccer Academy High School. It remained unclear how the state's decision might affect that school.
"We should not lose sight that there are hundreds of children already enrolled for the new UNO Soccer High School looking to start this fall in their school, currently under construction," he said.
A spokeswoman for the state's Department of Commerce and Economic Opportunity and Juan Rangel did not immediately return calls for comment from The Associated Press.