Juan Rangel Out As Boss Of UNO Charter Schools

CHICAGO (CBS) -- Juan Rangel, longtime leader of the politically powerful United Neighborhood Organization, has stepped aside from his $250,000-a-year post as UNO's chief executive in the wake of a scandal that cost the group millions of dollars in state funding and led to a federal investigation of its bond dealings.

The influential Hispanic community group operates the largest charter-school network in Illinois.

Rangel's departure "by mutual agreement" with the board of the not-for-profit group is effective immediately, UNO officials said Friday.

Rangel had three family members on the UNO payroll. Sources said two of the relatives quit recently, including deputy chief of staff Carlos Jaramillo, Rangel's nephew.

Rangel has close ties to politicians including Mayor Rahm Emanuel, whose 2011 campaign Rangel co-chaired, Ald. Edward M. Burke (14th) and Illinois House Speaker Michael Madigan (D-Chicago), who sponsored a $98 million state school-construction grant to UNO in 2009 that has fueled its rapid growth as a charter-school operator.

"We are thankful for Juan's leadership over the past two decades," said Freddy Santiago, UNO's interim board chairman. "We wish Juan the best in the next phase of his career."

Jesse Estrada, recently hired as UNO's chief of operations and procurement, was named interim CEO while a search is conducted for a permanent successor.

The state grant to UNO is thought to be the largest government subsidy for charter schools in the country.

But the way UNO spent the money helped bring the end of Rangel's meteoric rise in Chicago politics.

Rangel's top aide, Miguel d'Escoto, resigned in February, days after the Chicago Sun-Times reported UNO had given $8.5 million of business — paid for with the state grant — to companies owned by two of d'Escoto's brothers.

(Source: Sun-Times Media Wire © Chicago Sun-Times 2013. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)