NANCY STONE, CHICAGO TRIBUNE
Lois Scott is Mayor Rahm Emanuel's top financial aide.September 5, 2013
Mayor Rahm Emanuel's top financial aide Lois Scott had close business ties to the indicted former Chicago comptroller that are part of a revolving-door relationship involving her private bond consulting firm, City Hall and key figures in an Ohio federal bribery probe, a Tribune examination has found.
More than 700 pages of emails from the Ohio treasurer's office shed new light on Scott's recommendation that Emanuel hire Amer Ahmad as city comptroller. After Ahmad's kickback indictment surfaced last month, questions arose about how he got his job and how the Emanuel administration vetted him.
Here's how the individuals connect: Before Ahmad came to Chicago, he served as deputy treasurer in Ohio and awarded Scott's firm $165,000 in bond business in 2010. After Scott came aboard as Emanuel's chief financial officer in May 2011, she selected a firm that employed Ahmad's onetime boss, former Ohio Treasurer Kevin Boyce, for hundreds of thousands of dollars in city bond work.
When Boyce was a public official, Scott's firm profited, and when Scott became a public official under Emanuel, Boyce's firm profited. And Ahmad was at the center of it all.
As Scott tried to get her foot in the door with the Ohio treasurer's office, it was Ahmad who traveled with Boyce to Chicago for a face-to-face meeting in Scott's offices high above Wacker Drive, according to emails the Tribune obtained through an open-records request in Ohio. Two years later, when Boyce was working the marble concourses of City Hall in search of bond business, it was Ahmad whom he met for lunch.
Boyce earlier had recommended that Emanuel hire Ahmad as comptroller, even though Boyce knew Ahmad had been under federal investigation for five months, according to a memo from the Ohio treasurer's office.
Ahmad abruptly resigned in July and was indicted in Ohio weeks later. Emanuel has said he knew nothing of Ahmad's federal troubles until the charges surfaced, and he criticized Boyce and Ahmad for not telling him about the probe. The mayor has appointed a team to scrutinize Ahmad's tenure at City Hall.
On Wednesday, Scott's spokeswoman said Scott was not available for an interview. Asked whether the mayor or his administration knew about the prior business ties between Scott and Ahmad, Emanuel spokeswoman Sarah Hamilton said she didn't know.
She did, however, issue a statement offering Scott a vote of confidence.
"Lois Scott came from the private sector with a sterling reputation as a leader in public finance who has done business in states across the country, and she's conducted herself professionally since working for the city of Chicago," Hamilton said.
Since Emanuel took office in May 2011, Scott has served as his financial quarterback, overseeing the city's budget process and taking on key tasks such as engineering controversial changes to the city's much-maligned parking meter deal. A specialist in public-private partnerships, Scott also led the creation of the Chicago Infrastructure Trust, which Emanuel has billed as a way to secure private money to build public projects.
Before joining the Emanuel administration, Scott worked at Scott Balice Strategies, a Chicago-based financial advisory firm that she co-founded with Dean Balice. It specialized in the municipal bond market.
For more than two years, Scott had unsuccessfully pursued business with the Ohio treasurer's office, most of it under Boyce's predecessor, then-Ohio Treasurer Richard Cordray, emails show.
Scott sought work there in April 2007, an effort that included arranging a face-to-face meeting in Columbus with Cordray and repeated follow-ups seeking business as a financial adviser, records show.
By that October, Scott had submitted her firm's qualifications to Cordray's office, but two weeks had passed and she had yet to receive a response. Scott followed up with an email asking for an update on the treasurer's decision, proclaiming: "My fingers are getting cramped from being crossed so long!"
Scott's firm didn't make the cut. But she had better luck after Boyce became treasurer in early 2009 and named Ahmad deputy treasurer. Emails from 2009-10 show Ahmad was the central figure clearing the way for Scott's financial consulting firm to receive bond work in Ohio.
By March 2009, Boyce and Ahmad had attended a meeting at her Scott's Chicago office. After that meeting, Scott's point person on Ohio business, Julia Harris, continued to push for work with the treasurer's office. At one point, Ahmad responded to Harris with an email under the subject line "Stalker."
"Thanks for your follow-ups. It has been pretty crazy around here. We'd love to schedule a second meeting with you. Conference call or in-person?"
On June 1, 2009, Boyce and Ahmad scheduled a meeting in a ninth-floor conference room in the Rhodes State Office Tower in Columbus with top deputies from Scott Balice Strategies, emails show. Later that day, Scott sent an email to Ahmad: "Amer — I'd love to connect with you. Let me know when works for you," she wrote.
After the meeting, emails show the treasurer's office had allowed Scott's firm into a pool of financial advisers used for bond issues.
A month after that, the formal contract was signed. It had just two signatures: Those of Lois Scott and Amer Ahmad.
Soon after, Scott's firm ramped up its communications with Ahmad's office, sending numerous emails on ways it could serve on other financial matters, from student loans to energy efficiency.
All told, Boyce's administration paid Scott's firm $165,000 in fees as the financial adviser on four Ohio state highway bond issues totaling $377 million, records show. On three of those bond issues, Rice Financial Products, the firm Boyce would work for after losing the November 2010 election, served as the underwriter.
Boyce's loss at the polls also meant Ahmad would soon be out of a job. Days after the election, Scott's aide Harris emailed Ahmad, asking for his resume and assuring him he'd soon have another job, records show. Harris would go on to serve as a member of Emanuel's transition team, which spearheaded the hiring of the mayor's top staffers, including Ahmad.
Asked Wednesday about the email, Harris said the offer of postelection job help was to assist Ahmad and was not related to her future role on the mayor's transition team.
Boyce, Scott and Ahmad each moved on to new jobs. Boyce took an investment banking post at Rice Financial's Columbus office. Part of his job entailed seeking underwriting business in Chicago. Shortly before Emanuel hired Scott as chief financial officer, she and Balice sold their firm.
Two months after Boyce was hired at Rice Financial, Emanuel tapped Ahmad to be his comptroller, based on an "initial recommendation" from Scott, Emanuel's spokeswoman has said. Boyce offered his own strong endorsement of Ahmad for the comptroller job, predicting in a city news release that "Amer Ahmad will be a tremendous addition to the Emanuel administration."
That backing came more than five months after Boyce became aware the FBI was investigating his office, according to a memo the Tribune obtained from the Ohio treasurer's office. Boyce also knew his office had received a "very comprehensive" federal subpoena, which among other things sought Ahmad's and Boyce's cellphone records.
Emanuel announced he was hiring Ahmad on April 23, 2011. About two weeks later, before Emanuel was sworn in, Rice Financial was awarded $325,375 in city underwriting fees connected to bonds at O'Hare International Airport.
Rice Financial's president, Cristal Baron, said "it was unlikely" that Boyce had discussions with city officials about those bonds since they were brought to market just a few months after he joined the firm. But Baron told the Tribune last week that Boyce was involved in other Chicago bond work, including discussions about a September 2012 wastewater bond issue, for which the firm was paid $82,227. Rice Financial also was paid $144,568 for serving as the underwriter on a May 17, 2012, bond issue, according to the mayor's office.
That bond work came just a week after Boyce left the firm to be sworn in as an appointed Ohio state lawmaker.
On Wednesday, Boyce did not answer whether it was appropriate to solicit bond business in Chicago given his ties to Scott and Ahmad. In an email statement from a spokeswoman, Boyce acknowledged he "interacted with city representatives" but said that he did not receive compensation for any Chicago transactions while at Rice Financial. Baron, his former boss at the firm, said Boyce did have contact with Ahmad and Scott about city bond work while working at Rice Financial.
The Emanuel administration has confirmed that Scott met with Boyce as part of regular meetings with financial representatives. While Scott had a role in selecting firms for the 2012 bond issues, Ahmad did not, said Hamilton, the mayor's spokeswoman. As part of her work as the city's chief financial officer, Hamilton said, Scott has the "authority and responsibility for selecting underwriting services" and to recommend firms to the City Council.
Ahmad abruptly resigned as Chicago comptroller July 23 and was indicted by a federal grand jury weeks later. He pleaded not guilty last month for his participation in an alleged kickback scheme involving his time as Ohio deputy treasurer. The indictment did not involve work done by Scott's private firm.
Federal prosecutors say Ahmad gave Ohio state investment work to a former high school classmate in exchange for $400,000 being funneled to a landscaping company he part-owned and an additional $123,000 to Mohammed Noure Alo, described by prosecutors as a "friend and associate" of Ahmad's.
Emanuel and his vetting team have acknowledged they dismissed red flags about Ahmad and his dealings in Ohio with a Boston bank — the very information federal authorities in Ohio had sought.
In 2010, Ohio newspapers questioned why the bank got a contract with the treasurer's office two days after it hired Alo as its lobbyist. The bank was Alo's only lobbying client, the reports said. The issue surfaced in a TV attack ad that led, in part, to Boyce's election defeat.
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