Why Michael Kelly’s contract makes it difficult for the Park District to oust him over lifeguard abuse scandal

Michael Kelly
Park District CEO Michael Kelly at a press conference Monday, August 16, 2021, at a beach on the city's South Side. A handful of City Council members have now called for Kelly to resign over his handling of a lifeguard sex abuse scandal. Dan Mihalopolous / WBEZ
Michael Kelly
Park District CEO Michael Kelly at a press conference Monday, August 16, 2021, at a beach on the city's South Side. A handful of City Council members have now called for Kelly to resign over his handling of a lifeguard sex abuse scandal. Dan Mihalopolous / WBEZ

Why Michael Kelly’s contract makes it difficult for the Park District to oust him over lifeguard abuse scandal

Citing the deepening sexual misconduct scandal involving lifeguards at public beaches and pools, a growing number of Chicago City Council members have called on the city’s veteran top parks executive to step down from the $230,000-a-year job he’s held for a decade.

But it could be complicated — and expensive to Chicago taxpayers — to force out embattled Chicago Park District CEO and General Superintendent Michael Kelly.

That’s because of a strong four-year deal Kelly got from the park board nearly three years ago, on the watch of then-Mayor Rahm Emanuel.

Speculation around Kelly’s future has grown in recent weeks, and the park district’s board is scheduled to hold a special session behind closed doors starting at 2:30 p.m. Friday. Officials would not say what the topic of the session will be.

Kelly and the board’s politically-connected president, Avis LaVelle, did not respond to questions about the topic of the meeting. And in an email, a park district spokeswoman said only that the agenda for the executive session would consist of a “presentation from the Board’s Outside Counsel.”

At a news conference in August, Kelly said he would not resign and promised a quick resolution to an internal investigation into widespread sexual misconduct allegations in the park district’s Aquatics Department.

At the time, Kelly predicted he would bring reform quickly to the public beaches and pools, where former lifeguards told WBEZ they have suffered from a misogynistic and abusive workplace culture for decades.

But since then, pressure on Kelly has grown steadily, with the park district’s inspector general resigning last month after previously enjoying the vocal backing of Kelly and Chicago Mayor Lori Lightfoot.

Meanwhile, Cook County State’s Attorney Kim Foxx has opened her own investigation. Earlier this week, Foxx took the rare and dramatic step of publicly asking victims of sexual violence at the park district to step forward and contact prosecutors on a new hotline to her office.

No easy way out for park district – or Chicago taxpayers

Kelly’s contract was signed in December 2018. A few months before that, Emanuel announced he would not seek a third term and Lightfoot won the 2019 mayoral election.

Although the park district technically is separate from city government, the mayor appoints the agency’s top executive and the park board, with the historically automatic backing of the City Council. Lightfoot chose to keep Kelly, whose deal with the park district runs through the end of next year.

In 2019, a parks official told the Chicago Sun-Times that Kelly’s 2018 contract had been scrapped by mutual agreement. But WBEZ recently requested a copy of Kelly’s personnel file through an open-records request. There is nothing in the file to reflect any changes to the contract. And Kelly is being paid the salary promised under the contract, records show.

On Friday, LaVelle told WBEZ, “Mr. Kelly’s contract remains in effect.”

The agreement sets forth three paths for removing Kelly before his contract expires — and the six-page contract details what it could cost the taxpayer-funded park district to break his high-paying deal.

To terminate the parks CEO without cause, a minimum of four votes from the seven-member board would be required. But the park district would have to give Kelly at least 60 days’ notice of its intent to “unilaterally terminate the Contract.”

Under this scenario, Kelly would get eight months of his base salary at the time of his firing, records show. At his current salary, that could work out to more than $154,000 in severance pay.

And during those eight months while Kelly would be receiving his golden parachute, the park district also would have to foot the bill for his and his family’s health insurance.

If the parks board tried to fire Kelly for cause, however, matters could get much more complicated. It would involve first giving him written notice, including a “summary of the reasons for termination.”

Under the 2018 contract, the potential causes to let go of Kelly are described as “incompetence, negligence, cruelty, immorality, criminal activity, any recommendation by the Park District Inspector General, following a full investigation, for the reprimand or termination of the General Superintendent, or any act of misconduct that causes material harm to, and is contrary to the best interests of, the Park District.”

Within five days of getting notice that the board wants to fire him for cause, Kelly could demand a closed-door hearing before the board. After the hearing, a majority vote of the board could end Kelly’s employment as park district leader.

Kelly would be “entitled to any compensation, benefits and business expense reimbursement due and owing up to the date of termination.”

The third way he could be pushed to depart before the end of his deal would be by “mutual agreement” of Kelly and the board, under negotiated terms.

Kelly and then-parks board President Jesse Ruiz signed the contract on Dec. 13, 2018, records show. The full park district board ratified the deal the day before.

LaVelle then replaced Ruiz and in March 2019, she sent a letter to the Chicago Sun-Times defending the contract for Kelly.

“As a board, we stand by our support of Superintendent Kelly’s work and his commitment to the Chicago Park District, and more importantly, his service to the families that depend on our parks on a daily basis,” LaVelle said.

Kelly’s 41-day delay in reporting abuse complaints

At least five members of the 50-seat City Council have called for Kelly to resign, with the number growing this week amid a steady drumbeat of news about the lifeguard abuse scandal.

The park district’s internal probe has dragged on for more than a year and a half, beginning with a letter from a former lifeguard to Kelly on Feb. 7, 2020.

In her 11-page letter, a girl — who was 17 years old at the time — told Kelly about “extreme abuse from the other lifeguards” that she and others allegedly suffered at the city’s iconic Oak Street Beach.

Kelly replied to the woman within hours, promising to forward her complaint to the park district’s inspector general. But he did not do that for 41 days. And he only contacted the inspector general after a second female ex-lifeguard sent a separate complaint to the mayor.

Kelly has said he turned the initial whistleblower complaint over to a couple of aides, but they were unable to make any real progress before the second letter was forwarded to the park district by Lightfoot’s aides.

The second whistleblower wrote that there was “a huge incidence of sexual violence” among lifeguards and that she had been sexually attacked by a “more senior” parks employee when she was 17. She alleged in the letter that the attack was part of a “toxic environment” of rampant misconduct — “from sexual harassment to sexual assault and rape.”

The inspector general’s office soon fielded allegations of serious sexual misconduct against dozens of employees in the park district’s Aquatics Department, according to confidential reports obtained by WBEZ.

Earlier this year, the inspector general’s office privately told Kelly and the park district board that investigators found evidence corroborating serious misconduct allegations against three veteran lifeguards.

But the probe remained out of the public eye until WBEZ revealed in April that the inspector general’s office had been conducting a “broad investigation” into widespread complaints — including cases where the alleged victims were minors.

Firings and resignations in the inspector general’s office

The probe spun into chaos in August, when the lead investigator, Deputy Inspector General Nathan Kipp, was suspended without explanation.

Kipp publicly alleged that top park officials had interfered in the probe, in an attempt to minimize the extent of the problems with sexual misconduct. Kipp also said the inspector general’s office had shied away from interviewing Kelly.

Kelly and Inspector General Elaine Little denied Kipp’s allegations, and Lightfoot backed them, saying that she would await the conclusion of Little’s investigation.

But Little resigned in September — hours after WBEZ revealed that Little herself was under investigation for alleged conflicts of interest and wrongdoing at the time she quit her previous job, as director of investigations at the Cook County juvenile jail.

The park district then hired a former federal prosecutor to complete the inspector general’s probe. But by then, Foxx had already written to Kelly and LaVelle, the park board president, to inform them that her office was investigating the matter.

Foxx said this week she assigned specialists in sex crimes — and public corruption investigators also — to the park district case.

Park officials said Wednesday a fourth senior lifeguard had resigned after facing sexual-misconduct allegations involving an underage employee. A source told WBEZ that a 31-year-old supervisor at Humboldt Park was accused of misconduct and that the alleged victim was a 16-year-old girl.

Kelly’s spokeswoman said the park district is continuing to enact reforms, including the creation of a new arm of the agency called the Office of Protection.

WBEZ reported that park district had hired a $425-an-hour consultant, former county prosecutor Bob Milan, to set up the Office of Protection and rewrite policies and procedures for dealing with sexual harassment and other employee misconduct.

Both Milan and Kelly are from the clout-heavy 19th Ward, on the city’s Southwest Side.

Kelly’s rise to park district CEO

In addition to the lifeguard abuse scandal, Kelly has faced heavy criticism recently for the park district’s deal to allow Amazon to place delivery lockers in more than 100 parks and for initially resisting demands to install life rings at a spot on the North Side lakefront where a young man drowned this summer.

The park district, as the landlord for Soldier Field, also has found itself in disputes over stadium improvements and sports gambling with the Chicago Bears, who are considering leaving the city’s lakefront stadium for Arlington Heights. WBEZ reported last month that Kelly and the park district stopped the Chicago Bears from moving forward on a sports betting venue at the stadium, and that the park district has been feuding with the NFL franchise over repairs.

Before joining the park district nearly in 2003, Kelly worked for about eight years in Mayor Richard M. Daley’s administration.

At the time he moved from City Hall, Kelly was “assistant to the mayor — operations,” according to his applications to become director of intergovernmental affairs at the park district.

He listed references on his application — but park district officials blacked them out from a copy of Kelly’s personnel records provided to WBEZ in response to a Freedom of Information Act request.

Kelly was promoted from chief operating officer to CEO and general superintendent weeks after Emanuel was elected mayor in 2011.

His starting salary as top executive was $180,000 a year. Under his current contract, his annual salary rose to $214,005 in 2018, $222,003 in 2019 and $230,000 last year.

Records show Kelly attended Marist High School, graduated with a bachelor’s degree in political science from John Carroll University in Cleveland and got his law degree from DePaul University.

According to his bio on the park district’s website, Kelly also oversaw the development of The 606 recreational path and Maggie Daley Park, is married with four children and lives in the West Morgan Park neighborhood.

Dan Mihalopoulos is a reporter on WBEZ’s Government & Politics Team. Follow him @dmihalopoulos.