Meet the New Boss

Tattered finances, broken schools, rampant crime—Rahm Emanuel is taking on an entrenched bureaucracy and a legacy of corruption to fix the problems that American voters care about most deeply. Can the mayor of Chicago make the city that works work?

Rahm is up at 5:15 every morning to swim, bike, or run. (He finished ninth out of 80 in his age group in a triathlon last August.) The fifth-floor staff uses a football metaphor when describing an average day with the mayor. He’s constantly calling audibles, they say, jumping out of the car unexpectedly for a brisk walk amid surprised pedestrians; stopping unannounced at schools, police precincts, and fire stations; jamming a new meeting into an already overstuffed schedule.

One day I go with him to the Peter Cooper Dual Language Academy, an elementary school housed in a 127-year-old building in Pilsen. He touches base with the Latina principal, a good source of information about the neighborhood, before heading into a couple of classrooms with his daughter Leah in tow (her private school was out of session that day). The first-graders tell him they’ve been reading a book called Llama, Llama, Red Pajama, and the mayor recalls, “I used to love feety pajamas. If you ran really good, you could slide a little on a long wood floor.” Informed that a quiz is coming, he twists his neck and squeaks awkwardly, “A quiz today? A quiz!” I feel like I’m watching Kindergarten Cop, except the Arnold Schwarzenegger character is only 5 feet 7 inches and 150 pounds.

Later, Rahm is nearly as playful with bankers from China’s sovereign-wealth funds. He addresses them at breakfast, then scoots over to Citicorp on short notice at midday for a little more schmoozing. The mayor tells these Chinese Masters of the Universe, who help manage funds worth more than $800 billion, that he cannot let outside companies lease and operate city services but that he welcomes foreign investment in things like high-tech water meters and the 1,000 miles of new water pipes that will be needed soon in Chicago, where a fifth of the pipes are at least a century old and many of them regularly burst. “You do the right investment, I’m gonna name a [Chicago deep-dish] pizza after you,” he promises the Chinese visitors.

The key word is invest—not sell or lease. Rich Daley was a big privatizer and had some early success in selling off the Chicago Skyway bridge and other assets. But the most unpopular decision of his entire tenure was to lease the city’s parking meters for 75 years to a consortium organized by Morgan Stanley in exchange for nearly $1.2 billion. Chicagoans were outraged to be saddled with expensive, inconvenient box meters that reminded them of what they loathe about New York. (Rahm’s own more palatable parking gambit is an added-on $2-a-day congestion fee for using downtown garages and public lots during the week.) Looking forward, Rahm has to figure out how to maintain city management of city assets but find new revenue streams. The idea is to “monetize, not privatize,” he says. “I don’t have to sell something as the only way to monetize its value.”

Take the Port of Chicago, a hub of international trade. “You know what the Chicago port does for its major revenue?,” Rahm asks sharply. “Runs the best 18-hole golf course on the South Side. That’s the absolute truth.” He’s sure there must be a way to squeeze the port for more revenue, but he hasn’t found it yet.

The model is the Water Department. Thanks to Lake Michigan, Chicago is the Saudi Arabia of clean water, but the Water Department keeps more than half of the water it pumps in the city and peddles the rest to other jurisdictions for much less than it could. So to help pay for the new water pipes, Rahm will nearly double water rates, to $3.82 per 1,000 gallons, and he is ending a long-standing tradition whereby every religious institution and nonprofit in the city (6,668 organizations in all) got water for free. When churches yelped, Rahm showed his flexibility by letting the new rates phase in over three years and giving discounts for small institutions.

He also defied his steamroller image by modifying his plans to shorten library hours and raise motor-vehicle fees. But even low-hanging fruit in the budget couldn’t be picked without confronting the old Chicago Way. For decades, garbage collection and street cleaning were the responsibility not just of City Hall but of 50 ward aldermen who each commanded his or her own trucks and street sweepers. Workers were picked up each day at ward offices, and the trucks literally turned around at the ward borders. Just by reorganizing these functions on a rational grid system, Rahm says, he will save the city $60 million a year. Tree trimming is next on his agenda.

Rahm wants to end patronage not because it offends his conscience but because it is costly and inefficient. All departments are moving to performance pay, and managers will be held accountable for bloat. In his first budget, Rahm eliminated 500 middle- and senior-management positions.

The mayor sees Darwinian public-private contests as a way to drive efficiencies. He is staging a highly publicized “managed competition” between Chicago’s Department of Streets and Sanitation and private but unionized firms like Waste Management, to determine which does a better job picking up paper, plastic, and glass for recycling. Rahm was delighted that the city recycling workers, anxious to keep their jobs, suddenly experienced nearly zero absenteeism and sharply improved productivity. This performance competition for contracts will be replicated in other areas soon. To the consternation of labor, the mayor refuses to pay what he calls a “public-employment premium,” by which he means he won’t pay higher than market rates for services that happen to be performed by government employees.

So far, Rahm’s bigger budget hurdle is the state of Illinois. His brainstorm last year was a city-owned casino, which could eventually generate several hundred million dollars in revenue. It’s cheesy, but the logic is appealing. Why lose all that money to suburban and Indiana-based casinos? The project has been slowed by squabbling with Governor Quinn, who objects to the part of the deal (included for the benefit of downstate legislators) that would allow slot machines inside those temples of rectitude known as racetracks.

One day at a firehouse (I agreed not to disclose which one), Rahm gets into a vigorous discussion of pensions, the most burdensome issue for cities and states across the country. The firemen are upset that they’ve paid in all these years and the city hasn’t fulfilled its promises.

“If I were you, I’d be as pissed off as you. We signed not one, not two, but multiple contracts all reasserting the same thing,” Rahm says, implicitly damning the bargains Daley made.

But then, hands on hips, he looks them in the eye and says, “Here’s the deal.” He reminds the firemen that, as he said straight-up during the campaign, he would have to raise property taxes by 90 percent just to cover police and fire pensions, and there’s no way he’ll do that. So Chicago, like other cities, should begin to shift toward a system where everyone on the public payroll can choose to stay in the pension plan with a higher employee contribution or move to a 401(k) with a more generous employer match than offered in the private sector.

“If this was Chicago Tool and they didn’t pay into their pension, I bet there’d be a whole lot of people in the federal penitentiary,” says one fireman.

Rahm tells them that’s wrong. “A lot of companies go bankrupt, and it’s a forced reduction, mandated by the judge. I’m actually trying to negotiate it, okay?” He urges them to support a deal now, when they have leverage. “I believe these are life decisions,” he says calmly.

The fireman who has been giving him the hardest time says: “Whether I agree or disagree, everyone appreciates you coming here.”

On explosive issues like pensions, Rahm hopes he’s found a third way between solidarity with labor and war against it. “You’ve noticed I don’t have any of Ohio’s or Wisconsin’s problems,” Rahm says to me, referring to backlashes in those states against conservative governors who took on organized labor. “I stuck to my knitting about reform in government. I didn’t try to do what they were trying to do on [ending] collective bargaining.”

Rahm’s third way worked at McCormick Place, the country’s largest convention center. The stories about the unions there are legion. My father used to own an air-conditioning and refrigeration wholesaling business, and he recalls a trade show in the 1950s at the original McCormick Place (destroyed by fire), where he saw a loose screw on one of the refrigerator panels in his exhibition. When he took out a dime to tighten it, a union rep scolded him that if he didn’t stop, the unions would shut down the entire trade show. For decades, nothing changed. Tiny exhibitors weren’t even allowed to move their own mom-and-pop booths out of their station wagons without paying a union member to stand around and watch. In the 1990s, Chicago lost its historic place as the No. 1 city for conventions, slipping behind Las Vegas and later Orlando. An activity that brings 66,000 jobs and $8 billion into the local economy—Chicago’s biggest single commercial engine outside its airports—was in serious jeopardy.

The situation came to a head in 2010, when the managers of McCormick Place won legislation in Springfield for new rules that were likely illegal under federal labor law but increased the pressure for progress toward a settlement. At a press conference at McCormick Place last fall, I watched Rahm bask in the glow of the deal: “This is the worst news for Orlando and Las Vegas! McCormick Place is open for business!” It’s not clear how much convention business Chicago can recoup, but at least some rationality has been restored. The settlement allows trucks to be unloaded by two unionized workers instead of three; small vehicles to be unloaded without union “help”; and less overtime.

The confluence of events and an impending court battle made a deal doable without Rahm, but John Coli, the head of the Teamsters local, tells me that his relationship with the mayor helped immensely. When I ask Rahm about the settlement, he chuckles that the Teamsters’ endorsement of his candidacy—the only major union backing he received—came on the lowest day of the campaign last winter, when a state appellate court temporarily ruled Rahm ineligible for the ballot. “John’s very pragmatic,” Rahm says. “The guy shows balls.”

Sometimes it’s wiser not to show them. One evening, Rahm dashes out to flip the switch on new festive lights that will adorn State Street downtown. The event is interrupted by a few dozen Occupy Chicago hecklers whose message is unintelligible, but the mayor shortens his remarks to a couple of sentences and beats a hasty retreat, avoiding even a hint of confrontation. His policy has been to treat the demonstrators as gingerly as possible, and he is planning a “First Amendment zone” for the G8 and NATO summits. Afterward, he is almost cavalier: “We don’t have [an Occupy Wall Street] problem. You don’t see an Oakland here. You don’t see New York here. You don’t see Atlanta here. You don’t see Denver here.” His choppy cadence reminds me of the defensive way the first Mayor Daley talked just before the disturbances at the 1968 Democratic Convention, when police clubbed demonstrators on the very spot in Grant Park where 40 years later Barack Obama would give his Election Night victory speech.

Rahm has known all along that to be seen as successful, he must reform the Chicago Police Department. So it was no surprise that for his new police superintendent, he chose Garry McCarthy, a hard-charging Bronx native with a national reputation. Even as he takes flak for closing three station houses and rearranging assignments to get more officers on the street—and for blindsiding Rahm with the announcement—McCarthy is focused on the big stain on Chicago. He told me his three top goals for Chicago police are: “lower the shooting rate, lower the shooting rate, lower the shooting rate.”

For seven years, McCarthy perfected the CompStat information system and other innovative strategies as deputy commissioner in New York, where crime plummeted below even the most optimistic expectations. In 2006, Newark Mayor Cory Booker hired McCarthy as his police chief. One day, early in his tenure, he was examining reports on a cluster of gang-related shootings in Newark and asked what the police gang unit’s activity was like on Saturdays. “The response was, ‘The gang unit doesn’t work on Saturday,’” McCarthy remembers. “To which I naturally responded, ‘Do the gang members work on Saturday?’” Violent crime in Newark went down 9.3 percent in McCarthy’s time there.

Chicago largely missed the crime-fighting revolution. Like other city police forces, CPD has technically used CompStat for years, but has never mastered the accountability standards that make it work. “The system here is different,” McCarthy tells me diplomatically. “More about giving out information about crime than asking [commanders] what they were doing about it.” He learned to his dismay that the department had no system for tracking intelligence reports about suspicious locations—crack houses, gambling dens, and the like. To make matters worse, the tearing-down of most of Chicago’s wretched housing projects has had the unintended consequence of spreading violence into a wider area.

By the time I left City Hall or Police HQ at the end of a day of reporting this story, I was a little sick of hearing the term accountable. Has it become just another buzzword? Maybe so, but in Chicago, officials are determined to extend the concept all the way down to kids on the street. The city’s anti-gang-violence strategy, already under way when McCarthy arrived, involves bringing in 10 to 15 kids who are on probation and confronting them with representatives of the Chicago Police, the U.S. Attorney’s Office, the FBI, and the Cook County Sheriff’s Office. McCarthy says the adults tell the kids, “Here’s your message: ‘The next time someone in your group is identified as committing a murder, we’re going to bring you guys to the top of the pile, and all of the resources we have are going to be focused on taking out your organization.’ We explain to them ‘group accountability’—that every single member becomes responsible for the actions of one.” While the kids are there, they hear a second message, about the availability of job training, GED preparation, and other social services. McCarthy says the most powerful moment of these sit-downs comes when the kids hear tearful accounts from the mothers of murdered children, who explain to them face-to-face what the gangs are doing to their families.

The chief says the key is the follow-up: “The first time we can identify a murderer that’s linked to one of these groups, we try to take the [murderer] down within 60 days, then we reconvene the group and say, ‘Look, we told you what we were going to do if this happened. Well, it happened, and if you notice, the guy who was sitting there [with you] is not sitting there now, because we took him out.’”

All of this is a long way from producing New York–style results in a city still racked by more than 400 murders a year. In search of more tools, Rahm moved up the weeknight curfew to 8:30—one of the earliest in the country—for kids younger than 12. (For minors ages 12 to 16, it’s 10 p.m.) And he has boosted enforcement and raised citation fees, which now cost parents at least $500.

As a kid, I loathed the old 11 p.m. curfew, which had been imposed to help quell riots following the 1968 assassination of Martin Luther King Jr. and was never lifted. It felt selective, even political, in its application. In 1973, when I was 15, I was twice picked up for curfew violations while putting up campaign posters late at night a few days before an election. “Who are they for?” a cop asked me when I was halfway up a lamp pole. I answered with the name of an anti-machine reform candidate. “Get down and get in the back of the car,” the cop told me. Jane Byrne, who later became Chicago’s first female mayor, dug up the incident from police files and twisted it to try to discredit my mother for raising a son arrested for “ripping down Daley posters.”

Of course, my little brush with the law was nothing next to those of many Chicagoans, especially blacks and Hispanics. Before any real progress on crime can be made, police-civilian relations must improve. McCarthy says he has been particularly influenced in recent years by the work of Tom Tyler, a psychologist at NYU, and Tracey Meares, a law professor at Yale. “It turns out that the reason people comply with the law isn’t because they’re afraid of going to jail,” he says. “A large body of evidence shows that people comply with the law because of police legitimacy.”

McCarthy’s strategy for improving that legitimacy can make him sound like a social worker. He favors the establishment of “catchment centers,” in churches and nonprofit offices, where police can bring kids picked up after curfew. “So if we bring in Little Johnny, [a social-service provider] can say, ‘Why aren’t you at home? Did you eat today? Who do you live with? Mom and Dad? Grandma? Great-Grandma?’”

Such thinking is less a reflection of liberal idealism than of the mayor’s and police chief’s hardheaded assessment of the need to get kids off the streets in order to reduce crime. Rank-and-file police officers know that the superintendent is right about the broader dimensions of the job, and his message penetrates better because he’s a burly Irish cop in a city whose political structure and police and fire departments have been dominated for generations by Irish Americans.

Inside the Obama White House, Rahm was a passionate advocate for education reform. So upon taking office as mayor, of course he lobbied feverishly for legislation in Springfield to give him more power to remake the sprawling Chicago Public Schools system. Among other things, the new law, hailed as a national model, allows districts to fire bad teachers more easily (in recent years, only about three tenured Chicago teachers out of 30,000 were terminated annually), to implement tenure reform, and to allow for performance pay. It also gives CPS the leeway to lengthen the school day to seven and a half hours and the school year to 180 days starting in the 2012–13 school year.

During the campaign, Rahm seized on Chicago’s school day, the shortest used by any big city in the nation. He shocked audiences by describing a system where the typical school day was less than six hours and some kids left as early as 1:45 p.m.—this in a city where the starting salary for teachers ($50,000 a year) was $5,000 higher than in New York. At City Hall last summer, he pushed schools to voluntarily extend the school day in fall 2011, a year ahead of schedule, in exchange for a 2 percent pay increase for teachers, which was half of what they were owed but had not yet received under an earlier contract. Rahm is still steaming about the contracts negotiated by Daley and Arne Duncan—who was then running CPS and is now the nation’s education secretary—which gave teachers hefty pay increases and a shorter school year. “I know what the teachers got, and I know what the politicians got,” he says, meaning no strike. “But I don’t know what the kids got.”

Since January, only 50 of the city’s 675 schools have voluntarily agreed to the extra time (compliance among charter schools was higher). Critics who should have known better cited Japan as an example of a country that produces high test scores while having a short school day. (They forgot to mention that Japanese students routinely spend afternoons and evenings at “cram schools,” preparing for tests.) Rahm’s view is that a longer school day and year are necessary without being anywhere near sufficient. “If it were up to me, we’d have year-round schools. I wouldn’t have a summer break for children. I think it’s nuts,” he tells me. “We lose basically half of the academic year in the summer.”

The mayor’s main adversary on education is Karen Lewis, the president of the Chicago Teachers Union and a vice president of the American Federation of Teachers. Lewis is probably best known for a salty YouTube video that shows her addressing a 2011 convention as if she were opening for a Chris Rock Comedy Central special. She makes fun of her own girth, jokes about drug use, and goes after Arne Duncan: “Now, you know he went to private school, because if he’d gone to public school, he’d have had that lisp fixed.” (She later apologized.)

In August, Rahm met privately with Lewis, who derided the longer day as “babysitting and warehousing,” though Rahm had specifically said he was seeking the extra time for instruction in math and reading. They exchanged harsh words. Three weeks after the meeting, Lewis told the press that Rahm had stuck his finger in her face and shouted, “Fuck you, Lewis!” She went on: “He’s dirty. He’s low-down. He’s a street fighter.” When that story broke, Rahm mildly told reporters that it had been a good meeting that ended with a hug. Privately, he was furious that his media team hadn’t given him a better heads-up that the press had learned about the profane exchange.

The energy expended on the length of the school day has obscured coverage of other Emanuel initiatives, like alerting parents about the availability of subsidized preschool, expanding full-day kindergarten access to 6,000 new kids, and adopting better-designed standardized tests. Perhaps most important, CPS and a consortium sponsored by the University of Chicago’s Urban Education Institute unveiled a sophisticated online tool that lets parents and administrators learn which of Chicago’s public schools are working. Each detailed report card goes far beyond test scores to determine whether teachers collaborate and classes are demanding and engaging; the ratings are based on answers to student and teacher questionnaires.

“We’ve spent $300 million in this country on teacher-effectiveness research, and what turns out to be the best predictor?” asks Timothy Knowles, who runs the Urban Education Institute and headed up Rahm’s transition team on education. Knowles offers me a pleasantly contemptuous “Hmmm” and answers, “It’s students.” Their evaluations of teacher quality are surprisingly accurate when correlated with other measurements. Standardized tests, he says, “have been gamed so mercilessly by many states that they’re of limited use.” Responding to the report cards was voluntary this year. Rahm has ordered that compliance be mandatory for Chicago schools in 2012–13, which means that every school in the city will for the first time be thoroughly evaluated.

Contrary to the claims of the unions and their allies, Rahm doesn’t view charter schools as a panacea. But he has been indiscriminate in his praise of them. “He’s too close to the UNO Charter Network, which has mixed results,” says Seth Lavin, who writes the blog Chicago Schools Wonks. “How can we trust the mayor to get tough on underperforming schools when the schools he puts on pedestals aren’t examples of strong performance?” But the vinegar is a bigger problem than the honey. Lavin isn’t the only person who thinks the mayor’s harsh tone on closing underperforming schools (hardly a new idea in Chicago) is helping to fuel a backlash against reform efforts even among parents with no union connections.

Rahm’s choice for CEO of Chicago Public Schools was Jean-Claude Brizard, a Haitian-born former high-school physics teacher and principal in Brooklyn who worked with Joel Klein, the reform-minded chancellor in New York City, before becoming superintendent in Rochester, New York. Brizard had already accepted an offer to run the Newark system, but once again Cory Booker found one of his people snatched away by Rahm, who also took it upon himself to handpick much of Brizard’s team. Karen Lewis, noting Brizard’s clash with the union in Rochester, said of the appointment: “It’s a nightmare on so many different levels. This is going to be a hot, buttery mess.”

Brizard manages to be soft-spoken without mincing words. “I’ve been surprised by the incoherence of reforms in Chicago,” he told me. Shortly after arriving, Brizard informed his principals, who every year had rated 99 percent of Chicago teachers “superior or outstanding,” that they must change performance standards faster. “We’re getting better. We moved from less than 1 percent to 1 percent ‘unsatisfactory,’” he told them wryly. He recommends that teachers read or watch the video of Doug Lemov’s Teach Like a Champion, the bible for reformers who stress great teaching. Brizard understands that many charter schools fail, and that traditional schools cannot all adopt the crushing teacher workloads of the charters that succeed. “But what we have not done is learn great practices from outstanding charters like KIPP, Uncommon Schools, and Noble Street Schools,” he says. His four-year goals include raising Chicago’s 57 percent high-school graduation rate by at least 10 points and hiring 50 new top-flight principals.

Before achieving long-term goals, CPS must conclude hot, buttery contract talks this summer. For now, the mayor has the public behind him and is willing to weather a strike.

In his 2006 book, The Plan, Rahm proposed that all Americans go to school for at least 14 years. Like Presidents Clinton and Obama, he has long seen community colleges as crucial to preparing the American workforce for global competition and to saving young people who would otherwise be condemned to poverty. But Chicago’s city colleges have become dysfunctional, with graduation rates a pathetic 7 percent. (Nationally, only 15 out of 35 community-college systems graduate more than 50 percent.) “We have 9.4 percent unemployment, 100,000 job openings, and I’m spending a couple hundred million dollars on job training,” Rahm tells me. He pauses to let the absurdity of this sink in. “So we are going to reorganize it.”

Rahm fired almost all the college presidents, hired replacements after a national search, and decreed that six of the seven city-run colleges would have a special concentration. Corporations pledging to hire graduates will have a big hand in designing and implementing curricula. “You’re not going for four years, and you’re not going for a Nobel Prize or a research breakthrough,” he says. “This is about dealing with the nursing shortage, the lab-tech shortage. Hotels and restaurants will take over the curriculum for culinary and hospitality training.” Already AAR, a company that has 600 job openings for welders and mechanics, is partnering with Olive-Harvey College; Northwestern Memorial Hospital is designing job training in health care for Malcolm X College. Equally important, the city colleges are overhauling their inadequate guidance services and contacting the 15,000 students most likely to drop out. As of March, all 120,000 students are being tracked, and those in danger of slipping through the cracks will be counseled. Thinking big, Rahm wants Chicago to be the national model for rescuing the middle class.

Other ideas for the future pour out of the mayor all day: Consolidate services with Cook County, now also run by a reformer; launch a microlending initiative for small businesses; expand the use of surveillance cameras in front of schools and at “L” stations to deter crime; incentivize supermarkets to move into “food deserts” (poor neighborhoods without any place to shop); enforce wellness in the land of Polish sausage. If you smoke or have diabetes or are obese, and you work for the city, “you’re going to have to pay more [for health insurance] if you don’t take your medications,” Rahm says.

At the end of our last interview, in the mayor’s office, I was giving him a hard time for referring to a proposed Illinois tax credit for working families as “the earned-income tax credit.” The federal EITC is the most successful anti-poverty program of the past 40 years, but it bears such a boring name that few voters know of it. Rahm reminded me that in a bid for bipartisan support, he once introduced a bill in the U.S. House to rename it the “Ronald Reagan Tax Credit.” (Unlike more-recent Republicans, Reagan supported it.) “Don’t blame me,” he said.

But now he had the power to change the name, I pressed.

“I’m the mayor. I’m not the fucking governor,” he snapped.

Not yet, anyway. I originally thought Rahm might be a mayor-for-life type, but lately I’ve been hearing that he’ll likely serve two terms, then, in his early 60s, run for governor of Illinois. If he succeeds there, don’t bet against his trying to be the first Jewish president, though of course he denies any interest.

For now, Rahm’s restlessness is well channeled: “One of the reasons I take the ‘L,’ one of the reasons I go out and try to be accessible, is I want to make sure I never lose sight of my north stars: the safety of our streets, the strength of our schools, and the stability of our finances.” The mayor has established his metrics and is asking to be held accountable for them. And he will be.

Note: This article originally stated that Chicago will host the NATO and G-8 summits. After the April issue went to press, the White House announced that the G-8 summit will be held at Camp David.

Presented by

Jonathan Alter, a columnist for Bloomberg View and an MSNBC analyst, is the author, most recently, of The Promise: President Obama, Year One.

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