Chicago’s top 100: From the nation’s heartland to Washington?

By Carol Eisenberg

May 22, 2008 at 8:48am
George W. Bush saw the world through the prism of the Texas oilmen whose livelihood and passions he shared.

When he became president, he chose Houston oil executives and Austin honchos for top posts in his administration - with huge implications for national policy. If Illinois Sen. Barack Obama is elected, he would in all likelihood draw heavily from his home base in Chicago - to very different effect.

“We don’t just elect our presidents, we elect their networks as well,” said Ric Marshall, chief analyst of The Corporate Library, an independent, corporate governance research group.

As Obama closes in on the Democratic nomination for president, Muckety compiled a list of the 100 most-networked players in Chicago as an early indicator of the ties that might bind him as a new president, and who might be in line for top jobs and favorable treatment.

Just as John F. Kennedy’s election swept a group of Cambridge dons to Washington, and prompted a rush of investment in New England, an Obama presidency would revive interest in all things Chicago - almost certainly boosting its bid to host the 2016 summer Olympics, for example, said urban historian Joel Kotkin.

“What you have is an old, still-great city, for whom this candidacy might be the best stroke of luck they could ever have hoped for,” Kotkin said.

It is also a city with strong interests in manufacturing, publishing, finance and insurance, and a close corporate elite.

“Would an Obama win necessarily mean a shift in political emphasis in Washington away from U.S. oil interests in the Middle East and elsewhere, to the health and well-being of our domestic economy?” Marshall asked. “Almost certainly it would. And here the interests of the Chicago network would become particularly influential and important.”

Starting this week, Muckety will examine some of these networks in greater detail, including the overlapping worlds of Democratic reformists and party regulars who gave Obama his political education; the city’s black business elite who embraced him early on; his closest confidantes in Chicago, some of whom may accompany him to Washington should he win the election; and the tight-knit world of the city’s corporate boards and how they have fostered one of the nation’s best-endowed arts and entertainment scenes.

Daley, Obama at top of list

“We don’t just elect our presidents, we elect their networks as well.”

~ Ric Marshall, Corporate Library

Not surprisingly, the top spots on our Top 100 list go to the city’s best-known political leaders, Mayor Richard M. Daley and Obama.

In some ways, the two men appear polar opposites, and yet their networks intersect in significant ways.

Daley is the son and political heir of Richard J. Daley, who ruled Chicago with an iron first for more than two decades and who is dubbed “Richard the Second” because of his imperial style and powerful patrimony.

Chosen by Time in 2005 as the best big-city mayor in the United States, Daley has presided over a resurgence in tourism to Chicago; the modernization of the Chicago Transit Authority; the building of Millennium Park, an entertainment and park complex; and the city’s bid to host the 2016 Summer Olympics.

“It used to be Al Capone, let’s be realistic about that,” he said of Chicago’s world image, in an interview with Chicago Business. “Then it was Michael Jordan and now it’s Millenium Park. It’s really taken on a global identity.”

What he doesn’t say is that Chicago was also once synonymous with his father’s political machine. Despite the decline of the power of ward bosses and precinct captains in recent decades, remnants of the organization remain: A top Daley aide and three other city officials were convicted in November 2006 in a scheme that rewarded loyalists with hiring and promotions. Federal investigators are also examining City Hall’s awarding of trucking contracts to political contributors.

Obama, in contrast, arrived in Chicago as a young community organizer without patrimony or connections, attracted by the reformist promises of Chicago’s first black mayor Harold Washington. After getting his law degree at Harvard, he returned to the city with big political dreams and methodically cultivated patrons, first from politically independent Hyde Park and later, from among powerful party players and contributors.

Daley, Obama share same talent pool

“What you have is an old, still-great city, for whom this candidacy might be the best stroke of luck they could ever have hoped for.”

~ Joel Kotkin, author of The City: A Global History

Obama has styled himself as a political independent and a reformer, but he has relied on many people close to Daley for political advice and support. Indeed, for the first time last year, he endorsed Daley for re-election - and the mayor returned the favor, endorsing Obama for the Democratic nomination for president.

Key players in Obama’s campaign include chief political strategist David Axelrod, a longtime Daley friend and adviser and one of our Top 10.

Another is real-estate executive Valerie Jarrett, a senior member of Obama’s kitchen cabinet and also in the Top 10, who is a former deputy chief of staff to Daley, who recruited Obama’s then-fiance, Michelle Robinson, to work in Daley’s City Hall in the early 1990s. Jarrett has been a close friend to the Obamas ever since. Though scarcely known outside Chicago, she is a heavy-hitter there, having served as commissioner of the city’s Planning and Development Department, head of the Chicago Transit Authority and chairman of the Chicago Stock Exchange.

Also an adviser of both men is John R. Schmidt, a nationally and locally connected Chicago lawyer and former Daley chief of staff, who befriended Obama when he organized a voter-registration drive in Illinois in the early 1990s. Schmidt was then co-chairman of Bill Clinton’s Illinois fund-raising campaign, and subsequently went to Washington during the Clinton presidency as an associate attorney general.

A more recent addition is the mayor’s brother, William Daley, Midwest chairman of JPMorgan & Chase, a former commerce secretary under Bill Clinton and national campaign chairman of Al Gore’s 2000 presidential campaign.

Some of Daley’s biggest contributors also are major fundraisers for Obama, among them John W. Rogers Jr., the founder of Ariel Capital Management, a well-connected corporate and civic player who along with top Ariel executives, gave more $157,000 to Daley’s campaign last year.

That same year, Ariel was paid $3.8 million by the city to manage money for several different city pension funds. Rogers told the Chicago Tribune that Ariel gave so generously partly because Daley’s campaign manager, Peter Thompson, had worked at Ariel for 12 years.

Rogers, who played basketball with Obama’s brother-in-law at Princeton, is also one of Obama’s confidantes and rainmakers, raising at least $200,000 for his presidential bid, according to campaign reports.

Another big contributor to both men is Kenneth Griffin, the famously-private billionaire hedge fund manager and contributor to the arts, who gave Daley’s re-election campaign $162,000. More than a year ago, Griffin invited Obama to speak to employees of his Chicago hedge fund, Citadel Investment Group, and in subsequent months, employees and their families gave the candidate nearly $200,000. Griffin had just hired a team of lobbyists to preserve a tax loophole, but Obama has not supported him on the issue thus far. Griffin had previously backed Republicans, including Obama’s initial U.S. Senate opponent.

First families of Chicago

In a city famous renowned for its dynasties, our list also includes two other Daleys: besides the mayor’s brother, Bill, his daughter, Nora Daley Conroy, a director of outreach at Chicago Metropolis 2020, a nonprofit group, and a director of the Steppenwolf Theatre Company.

It boasts four Pritzkers, Chicago’s first family of fortune and philanthropy, including Penny Pritzker, who serves as Obama’s national fund-raising chairman, Thomas Pritzker, Gigi Pritzker Pucker; and J.B. Pritzker, who is active in Clinton’s campaign.

There are three Crowns, led by Lester Crown, an octogenarian with a net worth over $4 billion who spends much of his time trying to solve world problems; as well as James Crown and Susan Crown.

Two other clans with double billing are the Jacksons, including Jesse Jr., the congressman, and Jesse Sr., the former presidential candidate, and also the McKennas - Andrew Sr., chairman of the McDonald’s Corporation, and Andrew Jr., chairman of the Illinois Republican Party.

Beyond its family clans, our analysis found an extraordinarily tight-knit corporate elite.

“Chicago is by far the most insular and interconnected city in the United States,” said Marshall of The Corporate Library. “Even a relative newcome like the Boeing Company has both embraced and been embraced by the Chicago network.”

Interconnected corporate elite

The directors of some of Chicago’s biggest corporations - among them, Aon, Exelon and McDonald’s - also lead the city’s bid for the 2016 Olympics, the Lyric Opera and the Chicago Symphony, and sit on multiple corporate boards.

For instance, the founder of Chicago-based AON, the world’s second largest insurance broker, Patrick G. Ryan, is also chairman of Chicago’s 2016 Olympic Committee, and sits on four other boards. Director John W. Rogers Jr. of Ariel Management sits on the boards of two other Fortune 500 companies, and on more than a dozen civic and philanthropic boards; director R. Eden Martin, counsel at Sidley Austin law firm, sits on 13 others.

While it’s difficult to isolate the effect of board composition on a company’s financial performance, investor watchdogs say such ties can give rise to potential conflicts of interest that in the long run hurt shareholders. But Marshall notes that power nodes are an integral, even necessary aspect of social networks which are not necessarily good or bad in and of themselves.

Indeed, in Chicago, the old-boy network has fostered a strong tradition of civic responsibility and pride that has helped create a remarkably flourishing arts scene in Chicago at a time when many arts organizations around the country are struggling.

Insularity fosters giving, civic responsibility

Many of the same players who dominate the city’s corporations also hold sway over the boards of many of its arts organizations - and are generous benefactors.

The well-endowed Chicago Symphony. headed by Northern Trust Chairman William Osborn, recently beat out the New York Philharmonic to sign world-renowned conductor Riccardo Muti as its 10th music director. Earlier this month, the Chicago Shakespeare Theater, chaired by M. Hill Hammock, governor of the Chicago Metropolitan Planning Council, won a Tony as the best regional theater while the Steppenwolf Theatre production of “August,” still playing in New York, garnered seven Tony nominations.

While the 2004 opening of Millenium Park, a new park and performance center near Lake Michigan, was lauded as a grand reclamation of public space, its profusion of corporate and family nametags was criticized in some quarters.

The park, costing $475 million and built over an abandoned rail yard, is a stunning space with an outdoor music pavilion designed by Frank Gehry called the Jay Pritzker Pavilion, an underground theater with 1,500 seats, named after philanthropists Joan W. and Irving B. Harris, and elaborate gardens and massive sculptures.

Other installations include the McCormick Tribune Skating Rink, Peristyle at Wrigley Square, the AT&T Plaza, Lurie Garden and Chase Promenade. More than 80 individuals, corporations and foundations who donated at least $1 million, also had their names carved into three granite slabs.

“They like to make a difference, these people who have mega-money,” John H. Bryan, the retired CEO of Sara Lee Corporation, who led fund-raising drive, told the New York Times. “They want to think that 50 years from now, their grandchildren will come back and say, ‘Grandfather was somebody.’ “

That, after all, is the Chicago way.

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  • #1.   tim phelps 05.22.2008

    Carol Eisenberg: I would like to talk to you about this article. Please send me an email. Tim Phelps

  • #2.   Lunch_lady_librarian 05.23.2008

    I am baffled by their name
    “The Corporate Library” sounds cloak and dagger. I think more of Nancy Pearl…the action-figure librarian when I think “library.”

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