The real scandal behind Leon Finney’s downfall

The Woodlawn developer continued to land millions in public housing contracts despite his decades-long record of self-dealing and mismanagement.

Print More
Leon Finney Jr.

File photo by Marc Monaghan.

Leon Finney Jr. walks the 6300 block of South Kenwood Avenue showing off a single-family housing development.

Calling Rev. Leon Finney Jr. “an iconic person” who “has done good work,” Chicago Mayor Lori Lightfoot said she was “surprised” by a Sun-Times report on Finney’s latest problems.

But no one who’s been following the story ⁠— particularly since Angela Caputo’s 2012 exposé in The Chicago Reporter ⁠— is surprised by the latest turn of events.

RELATED:

Following Finney

As the Sun-Times reports, Finney’s nonprofit, the Woodlawn Community Development Corp., has filed for bankruptcy, Finney has been ousted as it head and a federal judge has appointed a trustee over the organization. The IRS says WCDC owes $4.2 million in taxes, interest and penalties, and the group owes another $3.3 million to the Local Initiatives Support Corp. following a 2017 lawsuit over a loan that was never repaid.

WCDC’s $2 million-a-year contract managing 4,300 units of public housing was cancelled in June after the Chicago Housing Authority accused the group of “mismanagement resulting in $400,000 in damages,” according to the Sun-Times.

The real surprise is that WCDC was managing public housing units for so many years after being forced to repay CHA $50,000 to clear up a ghost payrolling scandal, as Caputo reported. The agency’s inspector general found that Finney charged CHA in 2003 for work that was actually done on his church building.

Just two years later, CHA awarded WCDC $4 million in property management contracts, which were repeatedly renewed. The total paid by the housing agency to Finney’s nonprofit since then is well over $20 million.

Finney’s trail of scandal stretches back decades. In the early 1970s, an audit by the U.S. Department of Housing and Urban Development found that $800,000 in income from a federally-subsidized housing complex built by Finney in Woodlawn had been improperly diverted, according to the Sun-Times.

That reflects the pattern Caputo depicted: funds from a variety of nonprofit entities commingled so that no accounting was possible; $1.5 million in charges to Finney’s nonprofits for consulting, rent, and catering services provided by businesses owned by Finney, including a real estate company; WCDC stepping up to finance Finney’s church and to buy a house from the estate of Finney’s father.

There are also stories of employees going unpaid and of slum conditions in the properties Finney managed.

In 2010, residents of Finney-run buildings demanded then-Mayor Richard Daley remove Finney from the Chicago Plan Commission, where he had served since 1979, chanting “Slumlords out of City Hall.” Finney resigned from the commission a few months later.

In 2011, a Finney-led nonprofit was added to the city’s “building code scofflaws” list and barred from getting city funding – but not from CHA contracts. In 2013, residents from a CHA senior housing managed by Finney demanded he be removed as a CHA contractor due to pervasive code violations. Their call went unheeded. Finney’s management tried unsuccessfully to evict tenant leaders who complained at the Judge Slater Apartments in Bronzeville, according to Jawanza Malone, executive director of the Kenwood Oakland Community Organization.

In 2014, state agencies cited Finney’s longstanding community group, The Woodlawn Organization, for falsifying data and failing to pay workers, seeking repayment of nearly one third of an $800,000 anti-violence grant, the Tribune reported. TWO disappeared from the scene some time after that.

For many Chicagoans, the only surprise is that the gravy train actually seems to have come to an end.

How did Finney pull it off for all these decades? For one thing, he became a key supporter in the black community for Richie Daley and Rahm Emanuel. Before that, appointed to the CHA board by Mayor Jane Byrne, he backed policies of hers that inspired protests presaging the Harold Washington campaign.

Time and again, when the powers that be needed the appearance of grassroots support, Finney showed up with busloads of South Siders — many of them his tenants, at least some of whom probably wanted to stay on their landlord’s good side.

One organizer recalls a protest at the Board of Education during the Daley years against an early round of school closings. As pickets marched outside the building, buses pulled up with Finney’s people — to support the closings.

When Mayor Daley was fighting labor and community groups that were pushing for an ordinance requiring Walmart and other big box stores to pay a living wage, Finney brought busloads to oppose the measure. He performed similar services when the Children’s Museum wanted to move into Grant Park — busing people in to demonstrate at a meeting of the plan commission, where he was a member — and for the Lucas Museum.

With the Obama Presidential Center coming to Woodlawn, Finney has failed to back a community benefits agreement. Instead, when CBA supporters began organizing, he launched a Coalition for the Obama Presidential Center, arguing that “current advocates [do] not successfully represent the interest of community residents,” according to a press release.

Months later, Finney attempted to hike rents at a low-income building near the proposed OPC site by as much as $200, but was forced to back off after tenant protests organized by the CBA coalition.

Last year, emails revealed Finney had reprised his role as school closing supporter, working with school board contractors to support plans to close Englewood high schools.

All in all, you have to admit, Leon Finney is indeed an iconic Chicagoan, a master of self-dealing and inside deals who would make Nelson Algren proud. But he couldn’t have done it alone, and the mayors and power brokers who gladly accepted his support and winked at his malfeasance are equally implicated. They’re kind of iconic, too.

Meanwhile, WCDC’s court-appointed trustee has announced that 15 properties will be auctioned off next month. These include a number of vacant buildings and lots in Woodlawn and one occupied multi-unit building in the neighborhood. 

They don’t appear to include buildings with current federal subsidies, where ownership is often confusing – not just because Finney set up a series of LLCs, but because ownership is sometimes traded among a small circle of developers, possibly to evade accountability by federal and local authorities, said Alex Goldenberg of Southside Together Organizing for Power, a group that has fought displacement in Woodlawn.

Subsidized buildings would be covered by the state’s Federally Assisted Housing Preservation Act, which requires that owners wishing to sell give first right of refusal to tenants or to nonprofit low-income housing providers, he said.

And while immediate displacement of low-income residents may not be threatened by the sale, it could open the door to a “gentrifying land-grab” by big developers, Goldenberg said, adding, “It’s also an opportunity for community-controlled development” – though whether the bankruptcy court would take that into account remains to be seen.

The sale also highlights the importance of housing protections in the proposed community benefits ordinance for the Obama center, Goldenberg said. Advocates are frustrated that the ordinance appears to be on the Lightfoot administration’s back burner for now, while the housing market in Woodlawn heats up rapidly.

But if the proper tribute to another Chicago icon, Ald. Ed Burke, was restrictions on aldermanic prerogative and outside employment, perhaps the proper tribute to Finney is a community benefits ordinance that would offer some protection to the residents who for many years have been his most direct victims.

This post has been updated since publishing.