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TIF money for city jobs, and accountability for CME

In a march on City Hall tomorrow, community and labor groups will present Mayor Emanuel with a golden toilet representing the TIF subsidy recently returned by CME Group, which was to help build a luxury bathroom, cafe, and fitness center.

Led by the Grassroots Collaborative, the groups are asking Emanuel to use $33 million recently returned by CME, Bank of America, and CNA, to restore jobs and services in the city’s schools, clinics, and libraries.

They’re also calling for a moratorium on new TIF projects in the LaSalle Central TIF district, which they view as the epicenter of TIF subsidies benefiting corporations at the expense of neighborhoods.

Community activists from across the city will rally at the Chicago Board of Trade, 141 W. Jackson, at 10 a.m. on Wednesday, February 8, and march to City Hall.

Jobs for Chicagoans

Eric Tellez of Grassroots Collaborative cited recent research showing that jobs from downtown development spurred by TIFs have largely gone to suburban commuters.

“This is Chicago’s tax money – why isn’t it being used to employ Chicagoans?” he asked.  Restoring funding for city services “protects jobs with good wages for people who we know will live in Chicago.  They provide services for our neighborhoods, and they employ people from our neighborhoods.”

Meanwhile, as details emerge regarding CME’s role in the collapse of MF Global last October, Stand Up Chicago is highlighting issues of accountability – including the need for outside regulation of “self-regulating” exchanges.

CME auditors missed evidence of fraud in an audit shortly before the firm’s collapse, according to a bankruptcy trustee, the Sun Times reports.

Regulatory loophole

Public assurances that over 70 percent of $1.2 billion in fraudulently diverted customer funds have been returned serve to obscure the fact that big investors will be paid off first, while farmers who depended on MF Global to hedge against losses (and CME to protect them) have to wait in line, said Elizabeth Parisian of Stand Up.

With the Commodity Futures Trading Commission launching an investigation of CME and MF Global – and members of Congress calling for regulation of CME by the CFTC – the exchange is scrambling to maintain its regulatory loophole, Parisian said.

She said self-regulation by CME and similar exchanges is a “conflict of interest.”

“Instead of working behind the scenes to try to avoid regulation, CME should publicly acknowledge the need for outside oversight,” she said.

It’s an issue of accountability, Parisian said, which stretches beyond the MF Global scandal. She points out that a huge state tax break recently enacted on CME’s behalf included no commitments regarding job creation or retention.

Some 450 jobs were eliminated after CME bought the Chicago Board of Trade in 2007, the deal which the TIF subsidy was supposed to support.

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Category: city budget, taxes, TIF

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