Conflict of Interest in Real Estate Mogul's $3 Million Deal?

An NBC Chicago & Better Government Association Report

By Dick Johnson and Katy Smyser
|  Thursday, Aug 29, 2013  |  Updated 11:19 PM CDT
View Comments (
)
|
Email
|
Print
Dick Johnson reports on Elzie Higginbottom, the former chair of the  Housing Authority of Cook County. Higginbottom's company got paid more than $3 million to build a housing project for the agency during his time as chief. This story aired on Sunday, July 1 at 10 p.m.

Better Government Association

Dick Johnson reports on Elzie Higginbottom, the former chair of the Housing Authority of Cook County. Higginbottom's company got paid more than $3 million to build a housing project for the agency during his time as chief. This story aired on Sunday, July 1 at 10 p.m.

advertisement

A Chicago real estate mogul's various leadership roles have raised eyebrows at the U.S. Department of Housing and Urban Development for their perceived conflicts of interest.

Elzie Higginbottom is the former chairman of the Housing Authority of Cook County. But he also owns or has a major interest in 97 private companies, several of which are involved with real estate development.

Earlier this year, a $12 million apartment complex for senior citizens was erected in southwest suburban Summit. The project was overseen by Turnstone Development Corporation, a non-profit created by the Housing Authority of Cook County. Higginbottom sat on the board for Turnstone Development. And another contractor involved with the project, Burling Builders, lists Higginbottom as its president.

So Burling -- with Higginbottom as its owner -- sought millions of dollars for work on a project overseen by Turnstone -- with Higginbottom as a board member. And Turnstone was a branch of the Housing Authority of Cook County -- with Higginbottom as chairman.

As it turns out, Burling got more than $3 million from Turnstone -- as the lowest bidder to develop the second phase of the Summit housing.

"It would have been inappropriate for Burling to bid," said a HUD spokesman in a statement about one of those bids.

An investigation by Unit 5 and the Better Government Association uncovered other projects in which Higginbottom was involved. The HACC steers public money to subsidize rents at apartment buildings in Harvey and Calumet City. Both buildings pay a company called East Lake Management and Development Corporation to manage the apartments. Higginbottom owns that management company.

He denies he's doing anything wrong.

"If you’re trying to make a case that my success is the result of my involvement with public agencies, you’d be categorically wrong," he said. "We weren’t violating any rule."

Still, in the case of the apartment complex in Summit, he said he understands the question.

He conceded that "to avoid the appearance of conflict, maybe I shouldn’t have," allowed Burling to bid on the project. But, he said, "Burling Builders was $200,000 lower than the next guy," and "The citizens who are going to live there benefited, and the taxpayers benefited."

Robert Reed, the Director of Programming and Investigations at the Better Government Association, said Higginbottom's involvement in the project is sometimes "too close for comfort."

“I think you always have to be concerned when you have insiders who have authority over the very kinds of projects they’re involved in," he said. "If I’m the public, I am wondering, ‘What else are you bidding on?’ If I’m a competitor I am wondering why you have an edge and I don't."

Higginbottom has been also been a major fundraiser for former Mayor Richard M. Daley and sits on the advisory board for After School Matters, the organization created by Daley's late wife, Maggie Daley. Higginbottom is also a big contributor. He hosted a fundraiser for President Barack Obama at his home in March, and records indicate he's donated more than one million dollars to big-name Democratic candidates, including Mayor Rahm Emanuel and Gov. Pat Quinn, within the last decade.

The Better Government Association promotes reform through investigative journalism, civic engagement and advocacy. We're a watchdog, shining a light on government and holding public officials accountable.

Get the latest headlines sent to your inbox!
View Comments (
)
|
Email
|
Print
Leave Comments

Follow Us

Meet the team
What's New
Get Our Weather App
Stay ahead of the storm with the NBC... Read more
Follow Us
Sign up to receive news and updates that matter to you.
Send Us Your Story Tips
Check Out