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(Businessweek) — Chicago Mayor Richard M. Daley hired JPMorgan Chase (JPM) investment banker Gene Saffold to be the city’s chief financial officer and gave him a simple order: Protect the taxpayer. “During these tough times, when people are hurting, this is more important than ever,” Daley said in introducing Saffold in March 2009. “We must be creative and bold.”

Despite that mandate, Saffold is sticking with one costly tradition: the city’s more than two-decade practice of selling long-term bonds through private negotiations with banks rather than through open bidding. Arranging competitive auctions for the $2 billion in bonds Chicago has sold since Saffold took the job would have saved taxpayers millions of dollars, according to internal city documents and a review of its sales by Bloomberg.

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