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Susie Cagle, special to ProPublica Illinois

Amid Affordable Housing Dispute, Conservatives Seek a Home in Chicago

Groups tied to Illinois Policy Institute and talk show host Dan Proft back GOP candidates on city’s Northwest Side.

When news broke last week that a proposed affordable housing development on Chicago’s Northwest Side had likely been put on hold, Ammie Kessem, a Republican candidate for state representative, vowed on Facebook that it wasn’t the end of the story. Democrats, Kessem wrote, would pay for pushing the plan — including 45th Ward Ald. John Arena, its chief sponsor, and Kessem’s opponent, state Rep. Robert Martwick.

Martwick, she wrote, “cannot continue to hide on this subject. … The people are going to hold you accountable for it come November.”

Kessem’s opposition to building the affordable housing complex in her neighborhood has been a central part of her campaign for the Illinois House. And she’s had help.

Susie Cagle, special to ProPublica Illinois

Over the last year and a half — as the proposal has stirred up angry discussions about government aid for the poor, racial segregation and housing density — Kessem and other foes of the proposed development at 5150 N. Northwest Highway have received contributions and a promotional boost from a cluster of groups tied to the Illinois Policy Institute, arguably the most influential conservative organization in the state.

Through its long-running campaign for smaller government, lower taxes and increased transparency, the nonprofit think tank holds great sway with many Republicans and even some Democrats. But the institute and affiliated groups have historically focused most of their efforts on moving policies in Springfield to the right.

Amid the controversy over affordable housing, however, some institute leaders and their allies have worked to build a conservative movement on the city’s Northwest Side. Their efforts show how they and other right-leaning groups have moved money through nonprofits and political action committees — and publicized candidates and ideas on their own news sites — to advance their agendas.

Kessem didn’t respond to interview requests. But she and her allies have said they’re tired of being ignored by the Democrats who have long dominated city, county and state government.

To Democrats and many residents, though, the conservative groups are exploiting fears about affordable housing to further their political interests and build a following in traditionally Democratic Chicago.

“The principles they’re espousing are tea party, very conservative,” said Martwick. “Why they think they’ve got a chance to establish a foothold on the Northwest Side, I don’t know, unless these are just steps to a longer game.”

Meet the People

Susie Cagle, special to ProPublica Illinois

Founded in 2002, the institute became a force among state policymakers by producing research and essays calling for smaller government. As a charitable organization — a type of nonprofit known as a 501(c)(3), after the relevant section of the federal tax code — it is prohibited from “directly or indirectly” participating in political campaigns.

Starting with the 2012 elections, some institute leaders began funding campaigns after a series of transactions involving other organizations and political action committees they formed, records show.

One of those groups was the Government Accountability Alliance, a nonprofit that shares office space and leaders with the institute. In 2015 and 2016 — the most recent years tax records are available — the alliance gave more than $3 million total to the Illinois Opportunity Project, a nonprofit also founded by institute leaders and employees, including CEO John Tillman and senior fellow Dan Proft.

The Illinois Opportunity Project, in turn, poured more than $1.7 million into political campaigns and committees across the state, according to election board records. Because the Illinois Opportunity Project is what’s known as a 501(c)(4) nonprofit under the tax code, it can contribute to political campaigns as long as most of its resources are devoted to its social welfare mission. According to its tax returns, that mission consists of education and advocacy promoting free market principles.

Susie Cagle, special to ProPublica Illinois

In addition to leading the institute, Tillman is the longtime CEO and director of the Government Accountability Alliance. He said the alliance had nothing to do with the political contributions.

“GAA donated to IOP to fund their general operations,” he wrote in response to questions. “What IOP then did independent of that with their funding is a separate matter over which GAA had no control.”

Tillman was also on the board of the Illinois Opportunity Project through 2016. He didn’t answer a question about his role, and current leaders of the Illinois Opportunity Project did not respond to messages.

Some of the money from the Illinois Opportunity Project went to a pair of Northwest Side candidates for the Chicago City Council in 2015. John Garrido, a Chicago police officer running for alderman of the city’s 45th Ward, received $2,000, while Anthony Napolitano, a former police officer and firefighter vying to be 41st Ward alderman, got $3,000.

In a part of the city that’s home to thousands of government workers, including police officers, both touted their public service credentials and described themselves as independent-minded Republicans, though Chicago elections are nonpartisan. While the city is a longtime Democratic stronghold, far Northwest Side voters have sent Republicans to the City Council and General Assembly before, including the only current GOP state legislator from Chicago.

In 2016, the Illinois Opportunity Project also loaned $325,000 to Liberty Principles, a political action committee founded and run by Proft. Liberty Principles spent more than $10.5 million in races across the state in 2015 and 2016, including about $118,000 backing Garrido. Proft didn’t respond to a request for comment.

Susie Cagle, special to ProPublica Illinois

The 2015 results were mixed. In the 41st Ward, Napolitano upset an ally of Mayor Rahm Emanuel’s. But for the second time in four years, Garrido lost to John Arena, a self-described progressive who received significant backing from unions and liberal donors.

The race was bitter, and ill will lasted long after the votes were counted.

Among other issues, Arena’s critics were unhappy about how he handled the long-dormant site on Northwest Highway, where they say he scuttled a plan in 2016 to replace a vacant building with a new storage facility after work was already underway—and then was less than candid about it.

“It was like, ‘How in the world was this guy allowed to get away with all this stuff?’” Garrido said. “That’s where it started for us.”

On Jan. 25, 2017, Arena unveiled a new plan for the site that would include a storage facility as well as a seven-story, 100-unit apartment building. Up to 30 of the apartments would be set aside for households using Section 8 vouchers to subsidize their rent, and another 50 would be priced to be “affordable” for lower-income renters, with veterans and the disabled getting preference. The other 20 units would rent at market rates.

Arena said the development was consistent with his goals to add density and bring affordable housing to a neighborhood that lacked it.

“We have a responsibility in this city to build it in every community,” he said.

Follow the Money

Money from conservative groups and committees ended up funding political campaigns on Chicago's Northwest Side.

Susie Cagle, special to ProPublica Illinois

Residents in mostly white neighborhoods on the Far Northwest Side have long fought subsidized housing. The communities of Jefferson Park, Edison Park, Forest Glen and Norwood Park had a total of 20 public housing units for families in 2017, just one more than they had in 2000, when the Chicago Housing Authority began dismantling its high-rise developments with promises to help residents live in less segregated areas. That’s one of the lowest concentrations in the city; many other neighborhoods have dozens or even hundreds of units.

Arena announced that he would hold a community meeting to discuss the proposal. But some area residents didn’t wait for the meeting — or further details about the plan — before they weighed in. Thousands signed a petition opposing it.

Among those who jumped into the fray was Matt Podgorski, the Republican leader of the neighboring 39th Ward, who had already been organizing a group called the Northwest Side GOP Club in the four wards in that far corner of the city.

“This development is terrible for the neighborhood,” he posted on Facebook. “It’ll be occupied by people from other neighborhoods, overcrowding the public schools. Property values will go down; crime will go up. Let’s absolutely shut this project down. It is nothing more than a housing project disguised as something else. This is left-wing social engineering right in our backyard.”

Susie Cagle, special to ProPublica Illinois

The day before the community meeting, Podgorski filled out paperwork with the state election board to register the Northwest Side GOP Club as a political action committee. The club also reported a contribution for the first time: $2,000 from Proft’s Liberty Principles PAC.

In an email, Podgorski said the Northwest Side GOP Club had received about 20 other donations by then, but they were so small he didn’t have to report them. He declined to comment further.

The community meeting, on Feb. 9, 2017, was tense. Outside the church, protesters railed against public and subsidized housing, chanting “No Section 8!”

Inside, a long line of residents expressed concerns and vented their anger to Arena and representatives of the site’s developers, Full Circle Communities. Garrido, Arena’s two-time election opponent, said the proposed building was too tall for a neighborhood mostly made up of single-family homes. Kessem, noting that she was a Chicago Police Officer and member of the Northwest Side GOP Club, said she worried the development would bring crime and make her children unsafe. Others raised the specter of former public housing complexes like Cabrini-Green.

“You sold our neighborhood out!” a woman yelled at Arena.

Garrido said Arena and his media team then set out to vilify opponents of the development as racist, though he said most were upset about the size of Arena’s plan and his “sneaky” style.

Susie Cagle, special to ProPublica Illinois

“It was very calculated that they were making this into a racial thing, and making it an affordable housing issue,” Garrido said. While it’s true that some residents were afraid of public housing, he said, “the majority of the community is legitimately concerned about the density issue. I know people say that’s our dog whistle, but it’s the truth.”

After the community meeting, websites called Chicago City Wire and North Cook News began weighing in on the controversy, portraying Arena as an out-of-touch liberal while trumpeting Podgorski’s group as a defender of hardworking residents.

“Northwest Side GOP staunchly opposes Arena’s proposed housing project,” an article on the North Cook News site declared on Feb. 20, 2017.

Arena “believes that you can’t get people out of poverty so it’s up to government to help people and subsidize their lifestyle,” Amanda Biela, identified as the GOP club’s press secretary, told the publication.

Like Chicago City Wire and 27 other sites with identical designs — and often overlapping content — North Cook News is published by Local Government Information Services. Proft is the company’s president, according to its registration with the state, and Brian Timpone, the owner of other hyperlocal websites and media products, is his partner. Timpone did not respond to a request for comment.

The sites have a conservative political bent, spelled out on their “About” pages: “We believe in limited government, in the constructive role of the free market and in the rights of citizens to choose the size and scope of their government and the role it should play in their society.”

Susie Cagle, special to ProPublica Illinois

Arena said he’s heard from constituents concerned about details of the housing development, including its density, and has responded by making changes. But he said supporters of the plan “feel victimized and bullied.”

“When these fights happen, the folks who have an agenda, they know how to play the game,” Arena said. “They know how to stoke fear and intimidate.”

The campaign against the development had an undeniable impact. In September, after citing community opposition and “soft” support from the city, the Illinois Housing Development Authority declined to award tax credits for the development, records show. Without them, financing didn’t add up. Arena and the developers eventually cut the number of units in the plan to 75, but last week IHDA again turned down their application. Nevertheless, Arena has vowed to press on.

Meanwhile, Proft’s websites and conservative allies on the Northwest Side worked to keep the affordable housing controversy alive as candidates were lined up for state legislative races — even though the development fell under the city’s authority.

In August 2017, Chicago City Wire posted articles that quoted critics of Martwick who accused him of “hiding” on the issue.

A few weeks later, Kessem and Biela — both members of the Northwest Side GOP Club — formed campaign committees to run for the Illinois House in neighboring districts. The paperwork for both committees listed Podgorski as the chairman.

By December, the Illinois Opportunity Project made the first of a series of contributions to Kessem and Biela to pay for political consulting.

And in February, just five weeks before the primaries, Chicago police officer Jeffrey La Porte formed a committee and jumped into the Democratic primary against Martwick.

It was no secret who was backing La Porte. Less than a week later, Proft’s Liberty Principles PAC paid for a mailing attacking Martwick. And soon after that, La Porte reported an $11,000 contribution from the Illinois Opportunity Project, accounting for more than two-thirds of all the funds he reported raising.

La Porte spent most of the money on more campaign mailers. Some attacked Martwick for capitalizing on his political connections to make money as a lawyer and consultant. But at least one showed a picture of the proposed development at 5150 N. Northwest Highway. “Robert Martwick and John Arena support the 5150 development plan,” the mailer said. “Our community does not support extreme density!”

Martwick won the primary anyway, capturing 67 percent of the vote. But the campaigning on the Northwest Side didn’t stop.

Garrido said Arena still won’t admit that opposition to the 5150 plan is “legitimately a grassroots effort.”

“Don’t believe the hype that Dan Proft is the mastermind pulling all the strings about what’s going on on the Northwest Side,” Garrido said. “I consider Dan a friend. But Dan is not coordinating. We’re not opposing the project to try to get candidates in office.”

On June 21, the Northwest Side GOP Club is planning to hold what it calls the “IL-Advised Conservative Collective and Banquet,” a fundraiser featuring Kessem and Biela.

“Don’t miss the conservative event of the year,” said one announcement on the club’s website.

The keynote speaker for the event will be Dan Proft.

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