The document discusses corruption in the Chicago City Council and options for reform. It provides background on the council's history of corruption and a failed attempt at reform through the Office of the Legislative Inspector General (LIG). The LIG was hampered by limitations imposed by the council. Two policy options are presented: 1) Recreating the LIG but removing its limitations, or 2) Shifting the LIG's powers to investigate the council to the independent Office of the Inspector General. The document recommends the second option as more effective due to the Inspector General's existing independence and resources.

1. Ben Spies
Corruption and Corruption Control - Final Paper
Policy Brief
December 9, 2015
3169 Words
Rebuilding the Machine:
The Case for Legislative Corruption Control in the Chicago City Council
EXECUTIVE SUMMARY
Chicago City Council has an extensive history of corruption stemming from its sweeping powers
and lack of oversight on ethical and even criminal matters. The city recently experimented with reform
by establishing the Office Legislative Inspector General, a new body tasked with overseeing council
members (known as aldermen). The LIG was doomed to failure from the start thanks to a set of rules,
passed by City Council, which severely curtailed its power to investigate aldermen. The city boasts a
long trail of aldermen convicted on corruption charges that leads to the present day, and the outgoing
LIG claims several more investigations are in progress which have been suspended due to lack of funding
appropriated by the council and the expiration of the LIG’s term. Given legislative corruption’s
persistent presence in Chicago, this paper explores two policy options which City Council might
undertake to restore effective oversight. The council may choose to hire a new LIG and remove the
limitations on the office that plagued it previously. However, this paper recommends that City Council
shift the LIG’s powers and responsibilities to the Office of the Inspector General, a similar body
operating under different constraints, as the preferred policy option. Such a step is necessary to
improve the council’s reputation and restore its credibility in the eyes of Chicagoans.
BACKGROUND
Chicago has been a storied hotbed of political corruption almost since its founding. The
infamous Democratic political machine, which for decades has wielded control over city governance via
a single-party system, still vies to maintain its influence through successive reform movements and
popular demands for accountability. Nowhere is this influence more potent than in Chicago City
Council: a body of lawmakers, known as aldermen, elected to represent the city's fifty wards. In
addition to their legislative duties, Chicago aldermen exercise considerable executive authority over
their wards, both de jure and de facto, including disbursing development funds, controlling land use
decisions, and approving business licenses. This vertical integration of power is rationalized as an
expedited means of providing service and accountability to the voting public, but its complicated nature
and multiple avenues for interfering with normal market and government functions also provide ample
opportunity for corruption (Apergis 2012).
Perhaps unsurprisingly, corruption is a major and ongoing issue in Chicago City Council. Since
1972, thirty aldermen have been convicted of bribery, fraud, or similar charges related to their office
(Chicago Tribune 2012). This is roughly one third of all aldermen who have held office during that time.
What may be very surprising, however, is that these convictions were attained without the aid of a city
body directly tasked with overseeing, investigating, or responding to complaints against City Council—
because despite the institution's shameful record, no such body existed until 2011.
This was to change as incoming mayor Rahm Emanuel succeeded the twenty-two year reign of
Richard J. Daley. As part of his promise to increase transparency and accountability in city government,
Emanuel created a new City Council oversight body, the Office of the Legislative Inspector General
(hereafter LIG), to complement the existing Office of the Inspector General (IG), which is tasked with

2. overseeing and investigating the city's executive branch. Veteran prosecutor Faisal Khan was hired from
New York to lead the office and assume the LIG title for an initial term of four years.
But the administration made key mistakes, perhaps intentionally, in the design of the new
office. For one, the LIG was to report directly to City Council regarding its performance and budget, a
perversion of the independent authority needed to run effective anticorruption organizations (Klitgaard
1991). It would be given a paltry annual budget of $354,000 to cover nine staffers including Khan and all
operating expenses, to which Khan repeatedly objected (Hinz 2014). It would not be permitted to
investigate anonymous complaints and would be compelled to seek approval from the city Board of
Ethics to launch investigations. The Board would then have to notify the aldermen in question of the
details of any allegations, including the names of the accusers, opening the door for retaliation. Lastly,
the City Council stripped the LIG of the ability to investigate campaign finance violations in the run-up to
the 2015 aldermanic elections, the only time the office could have effectively done so (Spielman 2015).
Despite this last limitation, an LIG report this year tallies $282,000 in illegal campaign
contributions collected by twenty-nine sitting aldermen. In one instance, even a City Council ally of the
LIG and cosponsor of tougher oversight legislation was notified that a contribution he had received from
his office's landlord was a violation of campaign finance rules (Schultz 2015). This alderman has since
returned the money and publicly apologized, but incidents like this one suggest longstanding patterns of
abuse, both witting and unwitting, due to lack of oversight. Indeed, the perseverance of Khan and his
staffers has returned the topic of City Council accountability to the public discourse and earned the ire
of numerous aldermen (Korecki 2015).
Khan's four-year term expired in November of this year, the rest of his staff was terminated, and
no further funding was allocated to the office. So while Chicago has an Office of the Legislative
Inspector General on paper, it has effectively returned to the era of lawlessness in City Council. There
are plans in place to fix the limitations on the office before the city hires a successor, whenever that
might be (Spielman 2015). In the last days of his appointment, Khan contacted the Federal Bureau of
Investigation to request that they take ownership of the office's resources, to protect budding ethics
and criminal investigations against numerous sitting aldermen (Korecki 2015). The FBI complied,
subpoenaing all LIG files and computers containing information on their unresolved investigations.
Whether this will lead to federal charges against any members of City Council remains to be seen.
In the wake of this debacle, a number of progressive aldermen have come forward with
proposals to fill the regulatory void left by Khan and the LIG, to either remove limitations on the LIG or
to move its power to investigate aldermen to the more independent and unfettered Office of the
Inspector General (Spielman 2015). So far, none have been adopted by the City Council, who still
ultimately has purview over this issue until they decide to vest it somewhere else. Serious proposals
have been defeated through parliamentary maneuvering, referred to the Council's Rules Committee
where, like other controversial legislation, they can only be brought to consideration by the powerful
committee chair, and will likely expire before action is taken (Korecki 2015).
UNDERSTANDING LEGISLATIVE CORRUPTION
The story of Chicago's experiment with legislative oversight illustrates both the severe pitfalls in
its approach, as well as the need for such a body. As Stapenhurst et al note, organizations like the IMF
and the World Bank have noted the importance of legislative oversight as part of good anticorruption
policy, but have not gone so far as to recommend specific strategies (2014). At a cursory glance,
corruption and the potential for corruption appears rampant in City Council. But to better understand
the issue, we will look more closely how corruption comes to be in the American legislative context, and
effective means of curtailing it. From there, we will investigate several policy options available to stymie
corruption in Chicago City Council, and make a final recommendation.

3. It is important to recognize the differences between corruption at the national, state, and
municipal levels (Johnson 2013), although a dearth of research on the latter means we must draw
inferences where they are available. Recent research on legislative corruption in US states, "bolster[s]
the view that corruption in the United States is a significant policy concern," (Cordis 2014). Cordis and
others have reviewed the number of federal corruption convictions in all fifty states, taken as an
objective measure of corruption, against various indicators and outcomes including economic growth
(Johnson 2013), spending priorities (Cordis 2014), education and income inequality (Glaeser 2006), and
economic freedom (Apergis 2012). Johnson finds an inverse correlation between the level of corruption
and economic wellbeing of states (2013), while Cordis finds that corruption seems to lead to legislative
action allocating more budget resources into categories that provide more opportunities for rent-
seeking, such as housing development and natural resource exploration (2014). Apergis finds that
political systems with heavy government regulation into economic matters, which describes Chicago,
correlate with higher corruption levels (2012). Given this empirical evidence and Chicago's track record
of aldermanic convictions, it is sensible to seek a city-level policy solution to corruption in City Council.
Jain defines legislative corruption as, "the manner and the extent to which the voting behavior
of legislators can be influenced... includ[ing] vote-buying, whether by legislators in their attempts to get
re-elected or by those in the executive branch in their efforts to have some legislation enacted," (2001).
Aldermanic convictions in Chicago commonly fit this bill, and include bribes from real estate developers
in exchange for favorable zoning changes and payments for job appointments (Chicago Tribune 2012).
Stapenhurst, surveying eighty-two legislatures around the globe, finds that, "Controlling corruption
through case-by-case investigation and enforcement is not enough. Efforts must also be made to reduce
corruption opportunities," (2014). His team's research points to a number of different legislative
systems, arguing that while there is no "one-size-fits-all approach", it is clear that systems with more
clearly demarcated divisions of political power are less likely to experience legislative corruption (2014).
The amorphous nature of aldermanic power in Chicago, expanding beyond the legislature and at times
opaquely defined, suggests much opportunity for corruption.
Klitgaard breaks corruption down generally along the principal-agent model, wherein members
of the City Council act as agents tasked with fulfilling the mandates of the voting public, as principals
(1991). Klitgaard envisions corruption via an equation equaling monopoly (on making certain decisions)
plus discretion (on how to make those decisions) minus accountability (for the consequences of those
decisions). By adjusting one or several of these components, reformers may be able to reduce instances
of corruption among agents they entrust with certain responsibilities—in this case, to represent citizens
on legislative issues and manage wards effectively. To this end, he recommends instilling good moral
values on corruption and its costs into public sector staffers, for which a commitment from leadership to
abide by those principals is also necessary (1991).
Lager, in an overview of strategies to overcome cultures of corruption, echoes this point (2009).
He argues that increasing the number of ethics rules guiding public entities in ineffective at reducing
corruption, and may even serve as a guide to rule-breakers seeking safe paths to avoid accountability.
He advocates instead for "values orientations" aimed at subverting corrupt organizational cultures,
ideally altering the discretion component of Klitgaard's framework and not the accountability
component. He seems to agree with Klitgaard's notion that commitment from leadership is a
prerequisite for this to be done effectively (2009).
LEGISLATIVE CORRUPTION IN CHICAGO
However, the Chicago context complicates the assumptions behind the recommendations
above. Importantly, Chicago's aldermen are the very leaders Klitgaard and Lager are talking about—
they are both the direct beneficiaries of legislative corruption, and the body with the ultimate legal
authority to do anything about it. The expansive powers aldermen enjoy offer opportunities for rent-

4. seeking, but as Apergis notes, "corrupt governments are not likely to implement policies towards a
smaller government," (2012). Shifting the organizational values of an institution designed to operate
with impunity, as the Chicago City Council has been for decades, is difficult to say the least. To Lager's
point, city employees and elected officials are subject to a lengthy ethics ordinance and innumerable
laws governing public sector operations, including campaign finance laws, which appear to be routinely
ignored. Additional ethics regulations, therefore, would probably be ineffective.
Our options to attack the problem are limited. Aldermen are unlikely to give up their monopoly
over decisions in the legislature and in their wards, and indeed, doing so could upend Chicago's entire
political system with unforeseen consequences. Changing their approach to discretion through some
sort of values revolution is equally unlikely, given the long institutional history of corruption in Chicago
and the lack of leaders in positions to impose a values shift.
This leaves accountability. While piling more ethics rules on top of those already on the books is
unattractive, as Lager notes (2012), developing effective oversight that will compel aldermen to abide by
those rules is promising. Glaeser offers insight in this vein: "The behavior of government officials is
more strongly motivated by the potential costs than by larger rewards," (2006). The implication is that
aldermen behave the way they do not because the rents they seek through their office justify taking
large risks, but because there is so little risk: the potential costs are low in the face of nonexistent or
ineffective legislative oversight. More rules will not change this, but increasing the likelihood of getting
caught will.
Anechiarico described this approach to corruption control as panopticon: a situation in which
anyone may be watching at any time (1996). Though he was critical of the concept, given the unique
circumstances that define legislative corruption in Chicago City Council, a more panopticon approach to
building legislative oversight that is acknowledged, respected, and when appropriate, feared by the
Council would be the most effective way to control corruption in its ranks. In this sense, the Emanuel
administration got the concept right when it created the LIG, though the limitations on its power
rendered the office toothless. Taking this approach in mind, we will now explore policy alternatives to
create the legislative oversight reformers originally envisioned in the LIG.
POLICY ALTERNATIVES
Recreate the Office of the Legislative Inspector General
Currently, the city intends to continue the LIG office with a new leader, whom they are currently
recruiting. However, as stated above, City Council has not enacted any measures to expand the office’s
power. To engender the appropriate oversight, the Council may choose to do this. Necessary
adjustments to the LIG’s operations would include an expanded budget that is locked in as a percentage
of the city’s overall budget, and is not subject to the whims of the mayor or of City Council moving
forward. The Office of the Inspector General, the LIG’s counterpart in the executive branch, enjoys this
funding protection. Additionally, the LIG should be empowered to launch its own investigations without
Board of Ethics approval, to accept anonymous complaints and build investigations on them when it
determines this is warranted, and to investigate campaign finance rules violations.
These adjustments would transform the LIG from an illusory oversight body to one with the
resources and authority to monitor City Council. However, they present some challenges as well. For
one, the city is incredibly strapped for cash, and recently resorted to passing an unpopular $543 million
property tax increase to cover shortfalls. Increasing the budget for any city department, and locking in a
future level of funding in perpetuity, would be a hard sell in today’s Chicago. Second, expanding the
powers of the LIG would only be effective insofar as the office’s new leader has the will to properly carry
out its duties. There is concern among policy watchdogs that City Council will recruit an insider to take

5. over the position, whom they could presumably control more easily than Khan (Spielman 2015). These
concerns make empowering the LIG a viable, though less than ideal, solution.
Shift the LIG's powers to the Office of the Inspector General
Another alternative is to move the authority to investigate City Council to the Office of the
Inspector General (IG). Currently led by Joseph Ferguson, an experienced former United States Attorney
with six years in this appointment, the IG is a respected institution with a good recent track record of
corruption convictions in city government. As noted above, the IG’s funding cannot be endangered by
City Council as the LIG’s has been, because the former’s budget is fixed as a percentage of the overall
city budget. However, the IG’s purview is limited. The office is currently only empowered to investigate
officers elected to the executive (including the mayor), city employees and appointees, sister agencies,
and contractors engaged in business with the city. Aldermen and their staffs are conspicuously omitted
from IG oversight. This is due to an amendment passed immediately after the original 1989 ordinance
that established the IG, which exempted Council members and staffs from the IG’s jurisdiction.
Given that Ferguson’s office is experienced and successful in rooting out political corruption in
Chicago, and that it has the resources to continue doing so, consolidating the LIG’s responsibility to
investigate City Council into one anticorruption office under the IG makes good policy sense. Alderman
Michele Smith, who supports reform, has called this the “most cost-effective” option, and even outgoing
LIG head Khan supports the move (Spielman 2015, Korecki 2015). Since the framework is already largely
in place, placing the City Council under IG monitoring would immediately serve our policy objective of
raising the stakes for unscrupulous aldermen by improving the likelihood that they will be caught. The
move would require a simple legislative change, namely removing the 1989 amendment exempting City
Council and its staff from the IG’s jurisdiction, with the caveat that no similar amendment can be passed
by the Council in the future. It would also come at a nominal cost to Chicago taxpayers: though it would
be good practice to expand the office’s capacity with additional funding, this would not be strictly
necessary. The important result is the additional accountability (Klitgaard 1991) created by the ability of
the IG monitor the Council—see Anechiarico’s panopticon (1996)—and the chilling effect this new
threat would have on legislative corruption.
CONCLUSION
This brief examined the state of legislative corruption in Chicago, and possible policy responses
to it. As we have explored, corruption in City Council has been a persistent problem for decades, as
evidenced by the number of convictions of sitting aldermen and reports from the Legislative Inspector
General, the city’s recent attempt at oversight of this body. The LIG was rendered ineffective at
prosecuting aldermanic corruption due to a set of obstructive rules placed on the office by City Council
itself, and with the expiration of Legislative Inspector General Khan’s term, the future of legislative
oversight in Chicago is uncertain. This paper explored the policy alternatives of instilling more
appropriate legislative oversight powers in the LIG, and of moving these powers to the separate but
similar Office of the Inspector General. Considering the relatively lower cost, easier implementation,
and insulation from insider hiring in the latter option, we ultimately recommend giving the power to
investigate Chicago City Council to the Office of the Inspector General, without the limitations that were
placed on the Legislative Inspector General. This could be a difficult policy to implement, given that it is
the prerogative of the City Council alone, who have clearly demonstrated that they are not interested in
being subject to real oversight. However, as a reform movement grows among Chicago’s alderman, we
can only hope that this policy proposal gains traction.

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