Did School Officials Cross the Line By Hiring Their Old Law Firm?

Last month, the Chicago Board of Education agreed to a contract paying as much as $250,000 to law firm Jenner & Block, where Chicago Public Schools CEO Forrest Claypool and General Counsel Ron Marmer formerly worked.

Did this move violate the school system’s code of ethics, given the officials’ former relationship with Jenner? The deal was revealed by the Chicago Sun Times, and now the inspector general for the Chicago Board of Education will investigate.

At the heart of the controversy are Marmer’s continuing financial ties to the firm. In 2015 he received $200,000 from the firm and will continue to receive severance payments totaling $1 million through 2018, the newspaper reported. Marmer had been a partner at Jenner for most of his career, while Claypool last worked there more than 30 years ago.

The CPS Code of Ethics requires employees to disclose any “Business Relationship” with an entity from which the employee receives “payment in the amount of $2,500 or more in a calendar year.”

When a business relationship exists, the employee may not “recommend, retain, or hire” that entity and may not have “personal involvement” in “the preparation of specifications, evaluation of bids or proposals, negotiation of contract terms, and supervision of contract performance.”

Jenner began its work for CPS in March, preparing for the filing of a civil rights lawsuit to challenge the state’s school funding formula. The firm billed the school district for more than $182,000, the Sun Times reported, yet the lawsuit was never filed as the result of state officials agreeing to give city schools $100 million in extra state aid.

In a letter to the Sun-Times, CEO Claypool said he relied on Marmer’s recusal from negotiations as a key factor. Claypool also said “… attorneys at Jenner & Block took this case at steeply discounted rates, because of their belief in the cause.” Claypool further stated, “Few attorneys or firms of this stature and expertise would do so.”

A spokeswoman for Jenner & Block said she was referring all requests for comment to the Chicago Public Schools. Emily Bittner, the spokeswoman for Chicago Public Schools, did not respond to requests for comment.

In an interview, Kathleen Clark, professor at Washington University Law School in St. Louis said that any investigation into whether an ethics violation occurred will most likely focus on the timing of Marmer’s recusal.

“At what point did Marmer recuse himself, before or after they chose Jenner & Block?”

Another key question is whether other law firms had the opportunity to bid on the contract, she said.

John M. Breen, a professor of law at Loyola University of Chicago said, on the face of it, there does not appear to be a conflict of interest.

“The story said they [Jenner] got paid $295 an hour — knowing something about the big firms, that is a substantial discount on what they would pay for hourly fees,” he said. “It does not look like they are doing a favor for its friend, Jenner, because that is a low hourly price. Are you more likely to hire people you know? The answer to that is yes. It would be different if they were not a really good firm and it would be different if they were not able to negotiate a reduction in the hourly fee.”

Breen, however, said there are some questions about the extent to which Marmer was involved after the Jenner hire. Marmer is required by ethics rules to recuse himself from the entire law firm engagement — not just the initial award process, Breen said.

Breen said that the relationships between the players, as reported by the Sun Times, add a layer of intrigue: Claypool knows Marmer from when they both worked at Jenner & Block. Randall E. Mehrberg, the Jenner & Block partner who signed the deal with CPS, also worked for the Chicago Park District in the 1990s when Claypool was parks chief and contributed to Claypool’s election campaign.

“This is the way Chicago works,” Breen said. “Everyone kind of knows each other, and that’s both good and bad.”

(UPDATED: This story has been corrected. The inspector general for the Chicago Board of Education is conducting an investigation into school officials, not the city’s inspector general.)

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