The Chicago City Financing Corporation (CCFC) has been the target of an extensive legal campaign.
It’s been accused of violating state and federal laws by engaging in questionable practices and has received the backing of prominent financiers including hedge fund managers Elliott Management and BlackRock.
The CCFC has been under fire since 2015 when the board became embroiled in a controversy surrounding the board’s role in financing the purchase of the Chicago Fire football team in 2018.
The board is accused of mismanaging the sale of the team, failing to disclose that the team was in foreclosure, and failing to pay the state’s largest pension fund more than $2 billion in a deal that had previously been approved by the state legislature.
The state legislature has since called for an independent audit into the CCFC.
As a result, the Chicago Mayor’s office has taken the unusual step of taking the CCSC to court, alleging that the CCFL violated state law by misleading investors and regulators and violating the Investment Advisers Act.
The lawsuit filed Tuesday in U.S. District Court in Chicago seeks a court order that would stop the CCFFC from engaging in these actions.
It is the latest move in a decades-long legal battle between Chicago’s Mayor Rahm Emanuel and the CCFB, which was created in 2008 and is tasked with overseeing city finances.
The City Finances Commission (CFC), which is led by the city’s top economic development official, is charged with overseeing Chicago’s finances.
While it’s not clear what, if any, legal action the CCF would take if the CCFPC didn’t stop this lawsuit, the CCFA is a key player in the city government’s financial planning process.
In a statement, Emanuel’s office said the city will defend itself vigorously against the lawsuit.
“We have a responsibility to our citizens to ensure the City is financially sustainable and responsible,” the statement said.
“Our position is that the City Financed Corporation, the City Manager’s office, and the Chicago Finance Commission should not be involved in the City’s financial management.”