In 1994, School Board President D. Sharon Grant and Facilities Director James Harney became the poster children for corruption in the Chicago Public Schools.

In early February, reporters and investigators from WBBM-TV and the Better Government Association (BGA) got their hands on an audit by Arthur Andersen & Co., which the board had been sitting on for months. It showed that under Harney’s watch, building contractors had overcharged the board $7 million in a single fiscal year, including a $75 charge for an 80-cent electrical wall plate.

By the time the board accepted Harney’s resignation on Feb. 24, other questionable spending had come to light; some involved Grant, whose mother leased a building from the board. Board contractors and repair workers had done $340,000 worth of repairs in 1992 and 1993, even though the lease specifically stated that the lessee was responsible for repairs.

Grant insisted that the building, at 5151 W. Madison, was her mother’s affair and not her own. “Don’t ask me questions about my mother’s personal business,” Grant told a Tribune reporter. “Do you answer for your mother?” However, Grant’s mother had been in a coma since 1990, and the Tribune reported that board documents listed Grant as the contact person for the lease.

Grant’s conduct had raised conflict-of-interest questions before: In 1993, she had come under fire for negotiating a no-bid insurance contract with Blue Cross/Blue Shield, even though Grant was part-owner and CEO of a health-care company with business ties to Blue Cross/Blue Shield.

Investigations by WBBM-TV’s Pam Zekman, the BGA, the Spanish-language newspaper La Raza, the teacher-run muck-raking newspaper Substance and the Chicago Sun-Times kept the heat on for months. The Cook County States Attorney, alerted by media reports, opened up investigations on both Grant and Harney, who was alleged to have used School Board contractors to do repairs to his own home.

“It left me with the impression that it wasn’t so much institutional corruption as a kind of free market corrupt economy,” says Mike Lyons, chief investigator for the BGA. “The board had so many areas where if one were a clever and sinister entrepreneur, one could make money. And people did.”

Chicago Teachers Union spokesperson Jackie Gallagher, among others, was disgusted. “That’s when we had to take a two-year pay freeze in order to keep the schools open,” she recalls. “And to find out later that the administration at the time was running roughshod over everybody’s pocketbooks was nauseating.”

Grant brazened out the uproar. In May, with Mayor Daley’s backing, she engineered her re-election as board president, and she held that office until she handed the gavel over to Gery Chico in July 1995, a few weeks before she pled guilty to federal and state tax evasion charges.

Grant, who had not paid income tax for more than 15 years, went to prison in early 1996, a few months before Harney pled guilty to extorting $330,000 from three board contractors in a kickback scheme and was sentenced himself.

With their predecessors headed up the river, Mayor Daley’s school leadership team wasted no time presenting themselves as a clean-up crew. Within days of his inauguration as chief operating officer in July 1995, Ben Reyes scored headlines by taking reporters on tours of warehouses full of materials that seemed to be lying fallow. A month later, he disclosed that a second Arthur Andersen audit revealed another $7 million in overcharges under the prior regime.

“My first reaction was, it was a lot of eyewash,” says the BGA’s Lyons. But the new board won his respect, partly by putting former Sun-Times reporter Maribeth VanderWeele in charge of internal investigations. “I’ve known her for a long time, and she hasn’t got a corrupt bone in her body. … She’s mean as a snake, with the instincts of a reporter.”

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