* On Monday, I told you about a Crain’s story about alleged ties between Bruce Rauner and the notorious Stu Levine. From that Crain’s piece…
In testimony during the 2008 trial of Blagojevich pal Tony Rezko, Mr. Levine and others said Mr. Levine had had a $25,000-a-month contract “consulting” for CompBenefits Corp., an Atlanta-based dental and vision benefits company once known as CompDent. According to its website, CompBenefits at the time of Mr. Levine’s contract principally was owned by four private-equity firms, including GTCR LLC. Mr. Rauner, a founder of GTCR, is the “R” in the acronym.
Mr. Levine said his job was to get work for CompBenefits through whatever means were needed, including payoffs. A 2005 Sun-Times article says the firm then held contracts covering tens of thousands of workers at Chicago Public Schools and with the state.
Mr. Levine testified that he’d paid a bribe to obtain the CPS work, worked with insiders Bill Cellini and Ed Vrdolyak on other deals (both men later were convicted in unrelated federal cases) and plotted with Mr. Rezko to get work with Cook County via Orlando Jones, a key insider who later committed suicide.
Messrs. Levine and Rezko eventually went to prison on other matters, and prosecutors never took any action on CompBenefits. Perhaps that’s because they could not corroborate Mr. Levine’s testimony, or perhaps it’s because some major figures were going to prison anyway. I don’t know. Neither do I know whether Mr. Rauner or GTCR knew the details of what the firm was up to prior to the federal probe.
But I do know that Mr. Rauner, GTCR and Stu Levine had another interaction. That came in 2003, when the board of the Illinois Teachers’ Retirement System—on which Mr. Levine served—first tabled and then approved GTCR’s bid to get a $50 million investment from the giant pension fund.
According to a Sun-Times account, the bid stalled at the board’s February 2003 meeting after Mr. Levine objected but then was zipped through in May, when Mr. Rauner attended the board session. Now-retired TRS Executive Director Jon Bauman corroborates the gist of the newspaper report. He adds that he believes the February flop mostly was because of a bad presentation by GTCR but also says he does not know the particulars of Mr. Levine’s motives
My response on Monday…
The timing is an issue here. If Levine got that CompBenefits gig after the first unsuccessful TRS vote and before the second vote, then there’s a very serious problem. If not, then it’s not as bad. Neither article has that info, and I wasn’t able to find it online.
* Rauner’s spokesman Chip Englander responded via e-mail late yesterday…
Here’s the answer: Levine’s contract with CompBenefits started in the late 1990’s, years before the 2003 TRS vote.
Here’s the backstory. CompBenefits in the late 90s bought an Illinois company that was co-owned by Stuart Levine. As part of that purchase agreement Levine got a consulting contract. Fast forward, years later when CompBenefits discovered Levine was accused of wrongdoing they terminated the contract and assisted with the investigation against Levine.
I hope this helps.
So, if that’s all there is and Rauner’s flak is telling the truth, then there’s no there there.
* Crain’s, however, is maintaining its focus with another Rauner piece, which is based on this 2011 story by the Philadelphia Inquirer…
As friends and foes assess Ed Rendell’s tenure as governor, few events better illustrate his record in one contentious arena - campaign fund-raising - than his 2001 trip to see a Chicago businessman.
Rendell was in the early stages of the governor’s race. Aides had dispatched him to the Windy City with what they thought was a reasonable goal - a $50,000 check, according to one who spoke on condition of anonymity.
Rendell left the meeting buoyant, but confessed to aides he never asked the would-be donor for a set amount. Rendell “just had a feeling,” he told them.
A week or so later, the Chicagoan, Bruce Rauner, sent a check for $200,000. Another check, for $100,000, came just before the election.
At the time, Rauner’s private-equity firm had business with the state of Pennsylvania. GTCR L.L.C. was managing $110 million in pension funds for the State Employee Retirement System, records show.
After Rendell became governor, the state doubled its stake in GTCR funds, to $226 million. That meant at least $4 million more in management fees to the firm.
As was the case with my column this week, there is no proof in the Philadelphia story that giving led to getting. “There’s nothing improper about the (pension) contract, nor anything to suggest Rendell influenced it or even knew about it,” the paper said.
Indeed, though Mr. Rendell did push an income tax hike when he was governor, he also did a lot of other pro-business things as governor, and earlier as Philadelphia mayor, that might appeal to Mr. Rauner.
As Rauner spokesman Chip Englander emailed me when I asked him for comment on the Philadelphia story, “The vast majority of (Mr. Rauner’s) donations have been to Republicans and conservative and government reform causes, but Bruce is an independent guy, and he has supported some Democrats who he knows personally, or who have pursued education reform or pro-business policies.”
Mr. Englander adds, “Pennsylvania invested in GTCR funds starting in 1997, four years before Bruce ever contributed (to Mr. Rendell). Pennsylvania invested in them, under Republican and Democratic governors alike, because of GTCR’s strong returns and great reputation.”
As with the Levine stuff, that could make for a good TV ad blasting the supposed “outsider” as a possibly corrupt insider. But they ain’t got him yet.