PI Original Matthew Blake Friday February 3rd, 2012, 5:17pm

Changes At World Business Chicago Amid Scrutiny

The upcoming G8 and NATO summits in Chicago have fleetingly increased the visibility of World Business Chicago, the non-profit, non-governmental group Mayor Rahm Emanuel put in charge of fundraising for the events, which will take place in May at McCormick Place.

The upcoming G8 and NATO summits in Chicago have fleetingly increased the visibility of World Business Chicago, the non-profit, non-governmental group Mayor Rahm Emanuel put in charge of fundraising for the events, which will take place in May at McCormick Place.

Emanuel also happens to be chairman of the World Business Chicago board – a 48-member body that’s a “Who’s Who” of Chicago and national business leaders.

The role of the mayor and the big names on the board raise suspicions that World Business Chicago is a quietly powerful, ethically murky, force when it comes to the city’s economic policies. But recent developments raise the opposite possibility – That the direct influence of World Business on civic affairs could, actually, be on the wane.

Whatever their level of influence, World Business' role figures to stay mostly behind the scenes.

Mayor Richard Daley established World Business Chicago in 1999.

“Its purpose was to try and position Chicago as a global city,” says University of Illinois-Chicago political science professor Dick Simpson. World Business was created, Simpson says, as a “publicity machine” to inform national and international companies that “we were a city worth considering for their corporate headquarters.”

“Under Emanuel,” Simpson adds, “They have gone on steroids.”

Emanuel tripled the size of the World Business Board in July, including the addition of Michael Sacks, CEO of Chicago’s Grosvenor Capital Management, as vice-chairman. Current board members include Henry Paulson, the U.S. Treasury Secretary under George W. Bush, and Glen Tilton, chairman of the Midwest division of JPMorgan Chase.

The mayor stated he wanted the revamped board to attract more companies to Chicago.

Emanuel also delegated to World Business the job of procuring up to $60 million for the G8 and NATO summits. World Business is “a ‘fiscal agent’ for the summits,” says World Business spokeswoman Karley Sweet, so as to “promote Chicago as a global city and attract business here.”

But World Business voluntarily took away a tool it used to attract business – recommendations on what companies deserve Tax Increment Finance, or TIF, money.

A report released in July by City Inspector General Joseph Ferguson admonished World Business Chicago for recommending that CME Group, Inc. and United Airlines get TIF money. This represented a conflict of interest, Ferguson stated, because the heads of these companies sit on the World Business board.

World Business responded with a new, comprehensive company ethics policy they released in November. Under the new guidelines, World Business will not advocate for economic incentives on behalf of any company, not just those companies with representatives on the World Business board.

So while World Business executive board members can meet with companies as much as they want to promote Chicago’s business climate, they will not explicitly tell the city those companies deserve tax incentives.

As the ethics policy was being finalized, the 2012 city budget came out with less funding for the group. City funding used to make up 60 percent of the World Business budget – it now makes up 30 percent. “Over the last year, the city has significantly reduced its contribution to World Business Chicago,” Sweet says. “We are now doing more with less.”

So while executive board members can wine and dine officials from prospective Chicago companies, private donations will increasingly fund these meetings.

No direct influence on TIF spending and less city funding arguably make World Business a more insular group, with less direct engagement in the political process. Prior to these changes, Inspector General Ferguson criticized "the corporate nature of WBC’s governing board” as raising “additional questions regarding the organization’s ability to effectively recruit a broad range of businesses to Chicago.”

World Business says it will provide more transparency about its dealings, including the minutes of executive board meetings, “when confidentiality is not required.”

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