Craig Donohue, CEO of the Chicago Mercantile Exchange, didn't seem to mind the public spotlight late last year when drumming up support -- through empty threats of relocation -- for millions of dollars in state tax breaks for the the highly profitable options-trading giant. But he was somewhat less enthusiastic on Friday when Chicago's 99% shone a not-so-flattering spotlight on the CME from 1,000 miles away.
Donohue was in Houston to deliver the keynote luncheon address at an energy trading conference. The Chicago working families most impacted by layoffs and budget cuts can't afford to fly across the country to get the millionaire executive's attention, so protesters with Good Jobs Great Houston stood in their place.
As he entered the conference site, Donohue was met by dozens of Houston activists, who held signs and chanted outside the University of Houston's Melcher Hall to protest the $77 million per year tax break that CME Group -- Chicago's most profitable corporation -- received last year after successfully lobbying the state of Illinois.
Once inside, Donohue was barely five words into his prepared remarks when he was cut off by the resounding call for a "mic check" as four protesters rose to their feet and delivered this message:
Mr. Donohue, as you stand here today, preparing to give the 1% tips on how to get even richer, you are 1,000 miles away from the struggling families of Chicago and Illinois and they are further from your thoughts, even though CME will line its pockets with over one billion of their tax dollars over the next 10 years.
You were only able to get that money by making empty threats to relocate. The 99% of Chicago and Illinois can't afford to travel here so we are here to ask you a question on their behalf and on behalf of all 99% families everywhere.
Although the protestors cooperated with security officers when asked to leave, they continued to deliver their message as they were slowly escorted out of the luncheon. One protester managed to capture the mic check on video, which fades to black as security leads the group away but on which a final haunting question is audible: "'What can working families do to get their $1 billion in public funds back?'"
The two iconic companies that comprise CME Group -- the Chicago Mercantile Exchange and the Chicago Board of Trade -- have called Chicago home for over a century. Every day, hundreds of thousands of Chicagoans work hard to make the city the kind of place that any company would be proud to call home. But that didn't stop CME Group from making empty threats to leave Illinois entirely last December in order to extract a lucrative tax break from the state. Now, CME will line its pockets with roughly $1 billion in public funds over the next decade.
CME Group is the same company that in 2010 was awarded $15 million in TIF (Tax Increment Financing) funds in order to renovate its bathrooms, build a fancy café and fitness center on site, and fashion its boardrooms with state-of-the-art communication equipment. Community groups and labor unions representing Chicago's working families took action through 2011. In January, Stand Up! Chicago held an action at CME Group headquarters, presenting Chairman Terry Duffy with a golden toilet and demanding that the company return the TIF funds so they could be used to support struggling schools and neighborhoods, as originally intended. Just a few days later, in a move that has been described as unprecedented, CME Group announced that it would relinquish its claim to the TIF funds.
Stand Up! Chicago considers the return of $15 million in TIF funds to be a good start, but it's a mere drop in the bucket compared to the hundreds of millions of taxpayer dollars that CME Group will be collecting over the next few years. Considering that the company profited nearly $2 billion last year -- paying CEO Donohue alone over $7 million -- while supporting fewer jobs than any other Chicago company in its peer group, it's hard to think of a corporation less deserving of tax incentives.
As a result of the billion dollar tax break, the working families of Chicago and Illinois have become unwilling stakeholders in the highly profitable exchange -- and as such, have the right to hold CME Group accountable. In recognition of this, Stand Up! Chicago is demanding that CME relinquish its claim to the state tax break it received last year, a move that would put $77 million per year back into the state budget so that programs for the poor, elderly and disabled can remain funded.
Stand Up! Chicago is also demanding that CME Group support and adopt a speculation fee on all derivatives contracts traded on its exchanges. This speculation fee, outlined in the report Investing in Chicago Communities: A Jobs Fund for a Future That Works, would place a negligible $.25 fee on these risky transactions in order to generate over $1.4 billion in revenues per year, which would go into a community job fund to create good, living-wage jobs for nearly 40,000 unemployed Chicagoans.