My eyes opened wide when I read the latest Chicago Teachers’ Pension Fund (CTPF) press announcement that the Trustees approved investments in infrastructure run by Jim Reynolds of Loop Capital and Earvin Johnson of Magic Johnson Enterprises.
And that’s not because Magic Johnson was one of the most incredible NBA basketball players who could pass like magic as a 6’9” point guard.
The majority of Trustees approved a $10 million investment in the JLC Infrastructure Fund II run by Jim Reynolds and Earvin Johnson in 2015 to manage investments in infrastructure. The Fund II will target public and privately-owned infrastructure assets and businesses in the U.S. and Canada with $750 million and make 8 to 10 investments with an average equity investment of $50 to $150 million.
This plan was passed at the June 20, 2024 CTPF Board meeting.
Why did my eyes light up?
Magic Johnson’s company SodexoMAGIC was kicked out of the Chicago Public Schools after they had acquired an $80 million contract for janitorial services in 2015. CPS principals said that the schools were dirtier than ever after the private companies Sodexo and Aramark were awarded the contracts. CPS first fired Sodexo and then Aramark this past spring. As a teacher I remember only too well the fight we had to complain about how dirty our school was with sticky floors, rodent droppings and garbage not picked up. I had to file a grievance and remember the company’s reps telling us the problem was the reduced staff simply didn’t know how to operate the new machines. Finally the Chicago Board of Education (CBOE) started hiring more maintenance workers.
Johnson’s Sodexo company had donated $250k to Mayor Rahm Emanuel.
Jim Reynolds of Loop Capital is not exactly a pro-union or pro-public education money manager. He joined in the teacher bashing during the dark days of Race to the Top. He supported charter schools to replace the public schools and their unionized staff.
He lambasted the teachers and the Chicago Teachers Union for focusing on city finances, such as toxic debt deals that resulted in closing schools.
“I hear the teachers union talk a lot about pensions, but not about what’s going on in the classroom,” he said during a forum according to the media. “They need to agree on how kids are going to learn.”
He added that kids who can’t find jobs resort to crime. And that’s because teachers worry about their pensions instead of just teaching.
“Parents have watched class sizes grow, after-school programs close, and experienced teachers get laid off while bankers like Mr. Reynolds and billionaire tax loopholes were protected,” CTU President Karen Lewis told the Sun-Times in 2017. “It’s no wonder he’s so committed to avoiding the subject of school funding. I would change the subject, too, if I was head of one of the banks that profited at the expense of Chicago Public Schools students, educators and families.”
And pension fund money.
Tina Padilla, a former CTPF Teacher Trustee and head of the Pension Advocacy Group (PAG) spoke out at the June 20 Board meeting about this selection of these two troubling infrastructure investment fund managers.
“I am here today to ask that the Trustees seek more clarity before voting on the recommendations listed on the agenda,” Padilla said via zoom. “We are here to ensure that members are given information that is accurate and complete.”
She said the members have not been informed of the content of the 2025 budget and if it is financially viable given the current funding ratio of 47 percent.
Padilla said when she served as Chair of the Investment Committee, CTPF was looking for a minority-owned infrastructure manager. The only manager presented to the investment committee was JLC.
“When we were given no choice I knew there was a gap and if not repaired we would be in terrible trouble,” she told the Pension Board.
At the pension law and administrative rules committee, the Trustees were only presented with two choices out of thousands of lobbyists, she said, adding that Trustee Maria J. Rodriguez asked for a scoring rubric and if the board could see a third candidate.
This reminded me of the principal selection process at our school. A veteran teacher said how come we were only given a few choices out of the hundreds of applicants. CPS narrowed the selection of principals to meet their criteria, namely to be trained at the New Leaders for New Schools institute set up by the late anti-public education billionaire Eli Broad, which would focus on data and firing teachers.
When it comes to making choices, they say the magic number is three because many times the group interviewing can set it up so that one candidate is not good, and other candidate is good, so it becomes an easy choice.
In any case, some would argue the illusion of choice was just that. These deals have been worked out before any vote takes place.
Just look at the two presidential candidates we got as a perfect example.
One needs to take a look at pension board trustees and their family members to see if there any financial connections with the firms they are awarding contracts to. I bet some of those people have had some very nice, all expense paid vacations to exotic locations. If the feds looked hard enough I am certain they could also give some of these a vacation at the federal government's expense.