Chicago Parking Meters broke city participation rules aimed at giving women and minorities more business, according to a report from Chicago Inspector General Deborah Witzburg’s office.
CPM, the company that bought a notorious 75-year-lease of Chicago’s parking meter system in 2008, agreed in its infamous deal with then-Mayor Richard M. Daley to give a percentage of its business to companies certified as being owned by women or minorities, as required by city rules.
But for seven years, the company improperly claimed credit for a vendor that was not certified by the city as women or minority-owned, the Inspector General’s Office report released Tuesday said.
Witzburg’s report broadly blasted the deal. The Office of the Inspector General previously found the city got almost $1 billion less for the long-term lease than it would have otherwise gotten from parking revenue over the 75 years, it noted.
The long undetected, but now uncovered participation rule violation only “compounds the negative impact,” the report said.
“The parking meter lease was a bad deal for Chicago and Chicagoans. The harm of that bad deal is amplified where the City has not even realized the equity benefits of (minority and women-owned business enterprise) participation,” Witzburg wrote in a statement.
CPM declined comment Tuesday afternoon.
The much-loathed deal has faced added scrutiny in recent weeks as new twists make the city’s side of the agreement look worse and worse.
The Tribune first reported in early August that Chicago could be on the hook for $100 million after an arbitrator determined the city unfairly shorted the company. A few days later, the Tribune reported the city paid CPM over $600,000 to close down parking spots for NASCAR races in 2023 and 2024.
The company is required to use minority-owned businesses for 25% of its annual non-construction parking meter system operating expenses and women-owned businesses for 5%, according to its lease agreement with the city. The lease sets similar, but lower percentage requirements for construction.
But the company fell short of that goal “at least” in 2018, and incorrectly credited itself for a non-certified vendor between 2011 and 2018, the Inspector General’s report found.
“Whether or not CPM satisfied its M/WBE requirements under the concessionaire agreement during the other years in which it improperly counted a non-MBE certified vendor, it is troubling that the City did not identify that CPM — for approximately seven years — had improperly counted the vendor,” Witzburg wrote in an email to top city officials.
Evidence does not suggest the company made any intentionally false statements, Witzburg added. The culprit was not misconduct, she wrote, “but rather inefficient or wasteful management.”
The report recommended Mayor Brandon Johnson add oversight to ensure compliance with the participation rules. Johnson’s Chief Operating Officer, John Roberson, told Witzburg’s office in response that compliance claims from concessionaires will be cross-checked going forward and companies will be given greater responsibility to certify their claims.
The participation rules “are a vital tool in the effort to ensure all of Chicago’s residents have the opportunity to participate fully in the business of the City,” Roberson wrote.
