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Chicago Distances Bond Underwriting Picks from Indicted Ex-Comptroller

CHICAGO — Former Chicago Comptroller Amer Ahmad – who faces federal corruption charges stemming from role as deputy Ohio Treasurer -- played no role in city bond underwriting assignments, Mayor Rahm Emanuel’s administration said Friday.

Ahmad also did not attempt to steer city underwriting business to firms where his boss in Ohio, Kevin Boyce, worked as a public finance banker after his term as treasurer ended in early 2011, Emanuel spokeswoman Sarah Hamilton said.

“Amer did not select bond underwriting teams. The CFO has the authority and responsibility for selecting all underwriting services,” Hamilton said, referring to Chicago’s chief financial officer, Lois Scott. “In consultation with the city’s debt management team, Ms. Scott evaluates the qualifications and ideas from underwriting firms and recommends a slate of underwriters for each transaction to the city council.”

In mid-August a federal grand jury indicted Ahmad, accusing Boyce’s former deputy of orchestrating a kickback scheme involving state of Ohio investment business. He has entered a plea of not guilty. Ahmad had abruptly resigned from his Chicago comptroller’s post just a few weeks earlier, telling the Emanuel administration he wanted to return to the private sector. Boyce, who is now also a Democratic Ohio state lawmaker, and Emanuel expressed shock at the news of the indictment.

The city’s selection process for underwriters has drawn attention because of the ties between Ahmad and Boyce. The comptroller’s office includes city debt management and Boyce previously worked at Rice Financial Products Inc. and currently is a public finance banker at Duncan-Williams Inc. Both firms have Chicago offices and do business with the city.

The scrutiny has been heightened this week due to the release of records that suggested Boyce knew federal authorities were probing a contract awarded by his office but did not share that information with the city as it vetted Ahmad for the post of comptroller in the spring of 2011.

Boyce joined Rice Financial Products Inc.’s Columbus office in early 2011 after he lost his bid for another term as treasurer. He oversaw Ohio and Midwest operations, clients, and accounts for the firm’s public finance division.

He resigned in May 2012 and was appointed to the state House. Boyce currently works for Duncan-Williams. He joined the firm in January as a managing director, opening a Columbus office for the firm along with Christy McCurry.

Records released this week by Ohio Treasurer Josh Mandel’s office suggested that Boyce’s administration was aware in late 2010 that federal authorities had launched a probe into a contract awarded by his office, yet he offered a strong endorsement of Ahmad.

Emanuel’s announcement of his finance team in April 2011 included a comment from Boyce. “Amer Ahmad will be a tremendous addition to the Emanuel Administration. His financial skills are unmatched and his dedication to public service unrivaled. I am certain that the City of Chicago will be enhanced by the tenure of his service,” it said.

In an interview Friday, Boyce said he was never aware of a formal investigation involving Ahmad, although he acknowledged he was aware of a federal inquiry into one of the office’s contracts when he was contacted as part of Chicago’s vetting process and he submitted a letter of reference.

Boyce said he did not count Chicago as a client while at either firm, but he was among the group of Rice officials that met with Scott after Emanuel took office in May 2011 to “introduce ourselves and present our credentials” as other firms also did, Boyce said.

He registered in 2012 with the city as a lobbyist – as any banker seeking meetings with city officials for business is required to do. He did so to fill a void in the Chicago banking team at the request of his supervisors and he said during the period he did respond to some city inquiries. He then left in May.

“I did not receive any compensation for any city of Chicago deal,” Boyce said.

The city said Scott did meet with Boyce during his tenure at Rice as part of routine meetings with bankers to listen to their finance ideas, Hamilton said. “Regular meetings with underwriters ensures the city remains aware of what is happening in the credit markets, is made aware of new ideas, and is being best served by its underwriting partners,” Hamilton said.

Local market participants said while Scott calls the shots on city bond deals and Boyce did not directly court Chicago for work, the relationship with a top city finance official would still offer some cachet for him in his position.

During Boyce’s tenure at the minority-owned Rice, the firm’s Chicago work was actually down slightly from levels in 2009 and 2010, according to data from Thomson Reuters. 

Over the course of 2011 and 2012, Rice served as one of 10 co-managers on a $1 billion O’Hare International Airport revenue bond issue that priced in May, 2011, receiving credit for $95 million of the transaction, according to Thomson Reuters. The team was selected and the deal sold prior to Emanuel’s inauguration.

The firm was one of seven co-managers on a $400 million Chicago water revenue bond sale in May 2012. The team was selected prior to Boyce’s departure but it priced after he had left. It then served as one of two co-senior managers on the city’s $276 million sewer revenue bond issue, which sold in September 2012 after his departure. The firm received credit for $79 million of the bonds, according to Thomson Reuters. 

Duncan-Williams has worked on the underwriting team of only one city deal this year, according to Thomson Reuters. The $18 million multi-housing family revenue bond issue sold in January and the underwriting selection predated Boyce’s hiring.

While debt management and investor relations fall under the comptroller’s office, the city’s debt manager, Jeremy Fine, reports directly to Scott. The comptroller’s name is listed on bond offering statements under the CFO and before the budget director.

Emanuel has defended the city’s vetting process on Ahmad which included a review by former prosecutors in private practice. “Both Mr. Boyce and Amer had an obligation to be forthcoming with us in a way that they were not, which is quite clear,” Emanuel said at a recent public appearance.

The indictment alleges that Ahmad used his influence as Ohio deputy state treasurer to steer investment business to a firm with which he had close personal ties and which then funneled cash back to Ahmad and several alleged co-conspirators through “loans” and “fees.” The alleged schemes occurred between early 2009 and early 2011.

Ahmad is charged with conspiracy, bribery, honest services wire fraud, money laundering, money laundering conspiracy, and false statements. 

Emanuel has ordered a review of Ahmad’s activities during his two-year tenure.

“In consultation with the Inspector General, we have appointed Gordon Nash and Dan Collins at Drinker Biddle to conduct a review. They have been asked to examine all areas of responsibility under the purview of the comptroller to ensure the public trust was not violated,” Hamilton said.

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