SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Today’s must-read

Thursday, Jul 24, 2014

* Springfield’s top lobbyist, Gov. Pat Quinn, House Speaker Michael Madigan, David Axelrod’s son and many others were all apparently bamboozled by a guy who took advantage of a lucrative federal program to raise millions from overseas investors for a complete turkey of a project. Fortune Magazine

On Nov. 15, 2012, about 100 people gathered in a parking lot near O’Hare Airport in Chicago for a ceremonial occasion: the demolition of a fleabag motel to make way for what was intended to be a world-changing construction project. Next door to a Hooters restaurant, just off the Kennedy Expressway, was to rise a commercial and environmental wonder—the “World’s First Zero Carbon Platinum LEED-certified and 100% Allergen Free convention center and hotel complex.” Lest anyone doubt its global eco-import, the project’s developer was branding it as a “Kyoto Protocol Centre.” At a projected cost of $913 million, it was to include three connected towers—14, 17, and 19 stories tall—containing five upscale hotels with 995 suites and rooms, four levels of convention space, a green roof with a spa and yoga studio, a miniature golf course, and a 1,720-car “automatic robotic” parking garage. All this would be financed with the help of a government immigration program known as EB-5, which allows wealthy foreigners to obtain U.S. citizenship by sinking $500,000 apiece into a venture that creates American jobs. Spellbound by the sales pitch—which included “guarantees” that the project would deliver visas and juicy returns—nearly 300 eager Chinese investors had anted up a total of $147 million.

Go read the whole thing. Fascinating stuff.

- Posted by Rich Miller        


23 Comments
  1. - Under Further Review - Thursday, Jul 24, 14 @ 11:24 am:

    This place is near the intersection of Higgins and Cumberland — opposite the expressway. Nothing going on at the motel and there is a sign for a restaurant that never opened.

    Hard to imagine that such small property generated so much controversy.


  2. - Cassiopeia - Thursday, Jul 24, 14 @ 11:35 am:

    Truly fascinating article.

    Wonder what the folks at DCEO have to say about all of this and especially about the China trip with the Governor?


  3. - DuPage - Thursday, Jul 24, 14 @ 11:40 am:

    It looks like a federal government situation. My understanding is Illinois is a “sanctuary state” anyway.

    Non the less, P.T. Barnum would be proud!


  4. - Adam Smith - Thursday, Jul 24, 14 @ 11:42 am:

    I understand how this clown got to Madigan. He hired him to appeal his property taxes. That’s Madigan’s business.

    But how on earth did this guy snooker the Governor’s office and get anywhere near a trade mission? This is a very damning story for Quinn. He and his office appear to be simpletons who were easily duped by a con man who was exposed by another businessman who saw through his BS in a second.

    This checks all the Rauner message boxes. It shows the Quinn administration as incompetent, corrupt and lacking in leadership.


  5. - OneMan - Thursday, Jul 24, 14 @ 11:46 am:

    The whistle blower part of the whole thing was an interesting read as well.

    Also kind of telling when it comes to the due diligence (or lack therein) the Quinn folks did when they worked with the guy in China….

    Also if those revenue comments are right, that would have been easy to catch.


  6. - Rich Miller - Thursday, Jul 24, 14 @ 11:49 am:

    ===But how on earth did this guy snooker the Governor’s office and get anywhere near a trade mission?===

    He had over a hundred million sitting in escrow. People saw that mountain of money, plus the promise of 6,000 jobs and were completely bamboozled.


  7. - RNUG - Thursday, Jul 24, 14 @ 11:51 am:

    - OneMan - Thursday, Jul 24, 14 @ 11:46 am:

    Agree, the whistleblower part was real interesting. $14.7M payday for filling out a form saying you think something is fishy.


  8. - yo - Thursday, Jul 24, 14 @ 11:57 am:

    thanks for link. very interesting. think I may be taking a trip to a developing country soon… EB5 visas for everyone!


  9. - OneMan - Thursday, Jul 24, 14 @ 11:57 am:

    But how much did he have in Escrow Around September 8th 2011 that’s the more interesting question since he was still raising money after the visit…

    The Trib has some more on this in an older story

    http://articles.chicagotribune.com/2012-07-15/news/ct-met-china-investment-visas-sethi-sidebar-20120715_1_eb-5-hotel-proposal-foreign-investors


  10. - Empty Suit - Thursday, Jul 24, 14 @ 12:08 pm:

    Some how Shakespeare comes to mind;
    Henry The Sixth, Part 2 Act 4, scene 2, 71–78


  11. - Been There - Thursday, Jul 24, 14 @ 12:08 pm:

    I agree with OneMan about the whistle blower part of the story. I assume the 10% came out of the escrowed money. Add in the $14 mil in fees paid the EB-5 investors are out a good chunk of money.


  12. - Interested Observer - Thursday, Jul 24, 14 @ 12:27 pm:

    This may come as a surprise to some of you, but I venture to guess that most of those Chinese investors cared less whether they recovered a dime of their investment. They were all extremely wealthy people who were doing nothing more than buying a green card. Indiana’s Gov. Mitch Daniels got bamboozled by a Chinese immigrant much the same way after one of his top aides, a former Illinois guy who used to work for Gov. Thompson, Mitch Roob, became a bit too close to her. Unlike Sethi, she met with an untimely death. She was working with an EB-5 attorney from Chicago who was with her when he died before her crimes could be prosecuted and her corrupt relationship with a bunch of Indiana pols could be exposed http://archive.indystar.com/article/20121215/EXCLUSIVE01/212160304/Chapter-1-Who-Monica-Liang-


  13. - Adam Smith - Thursday, Jul 24, 14 @ 12:30 pm:

    No possible way to spin this as anything other than a huge embarrassment for Quinn that makes him and his team look hapless. Anyone who’s been in this biz for more than a cup of coffee knows that a 29 year-old who comes out of nowhere with a “too good to be true” deal needs some serious scrutiny.


  14. - oz - Thursday, Jul 24, 14 @ 12:34 pm:

    Can’t wait till they start taking peoples property under eminent domain laws because rich foreign investors want it. The process will be deemed ‘necessary’ and hailed to create much needed jobs for the children and who is going to argue those idealistic altruism’s?

    Never mind if the land will be used to build a Foxconn-like sweatshop or if the nation is giving up its sovereignty because corporation are seen as people and can buy politicians for a buck.

    Yeah, it’s all good. /sarc.


  15. - oz - Thursday, Jul 24, 14 @ 12:45 pm:

    Corrupt money looking for a safe haven as the global economic system continues to crumble under investment banking scams, rigged stock market, and debt.

    Where else to launder the money than in US real estate as places like China crack down on ill gotten gains? Look at the NYC market.


  16. - OneMan - Thursday, Jul 24, 14 @ 12:57 pm:

    Corrupt money looking for a safe haven as the global economic system continues to crumble under investment banking scams, rigged stock market, and debt.

    Not really, money looking to get a green card more likely…


  17. - Arthur Andersen - Thursday, Jul 24, 14 @ 2:04 pm:

    I kinda remember reading about this when it was announced, because the cost was so out of whack relative to the number of rooms that I figured one had to be a typo. Also that I couldn’t see all that fitting on the little piece of ground were that crappy HoJos sat for many years.

    Back in the day, there were any number of folks at DCCA that would have smelled that stinker and waved off the Governor right away. In today’s De-Cay-O, those people are retired, departed or laid off.


  18. - dupage dan - Thursday, Jul 24, 14 @ 2:44 pm:

    breathtaking


  19. - Tom Joad - Thursday, Jul 24, 14 @ 2:57 pm:

    I met one of these legal experts who was going to raise a lot of money from Iraquis. He had a law office in downtown Chicago and hired several newly admitted lawyers. He wanted to raise the money in exchange for a 50% stake in the business. He also wanted me to help sell the investors in the suburban counties. He never did offer to pay me though.


  20. - vinron - Thursday, Jul 24, 14 @ 3:00 pm:

    This would make a good movie. Oceans EB-5.


  21. - Streator Curmudgeon - Thursday, Jul 24, 14 @ 4:19 pm:

    The tip-off should have been the miniature golf course.


  22. - Southsider - Thursday, Jul 24, 14 @ 5:52 pm:

    What does the Illinois Finance Authority do and who is on the committee?


  23. - walker - Thursday, Jul 24, 14 @ 5:58 pm:

    A very American story. He thought himself a junior Donald Trump. If it makes me more money, it must be OK.

    Amazing how many of the actually successful tycoons in this country (Ross Perot comes to mind) made their fortunes almost entirely on Federal gov’t. money or guarantees.

    At least we’re selling green cards and citizenship to the top.(snark) It used to be if you’re super-rich enough, just show up, tell me your new address, and everything’s cool.


Sorry, comments for this post are now closed.


* Reader comments closed for the weekend
* Long list of appointments by Gov. Rauner
* Question of the day
* *** UPDATED x1 *** The Democrats' budget time bomb is starting to explode
* State threatens to zap all Chicago GSA school funding
* Another optics problem
* This is why we can't have nice things
* Tiny, secluded county wants no part of ATV plan
* It's just a bill
* Feds drop drug conspiracy charges
* Governing ain't easy
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * The Week in iPad Cases: Backpacks from Spigen and iSkin, an OtterBox screen protector, and more
        * Improve your game of Go (or just keep playing) with this collection of apps
        * Apple's missing out on X: Where X is whatever isn't shipping yet
        * Apple and Samsung tied, Microsoft + Cyanogen, LG G4 & more – Pocketnow Daily
        * What is the future of Windows Holographic?
        * Anton thinks: Windows Phone is not good for me
        * Microsoft DT-903 review: wireless charging is brighter than ever (Video)

        * Top 10 Lifehacker Posts of All Time
        * Blogging is very much alive — we just call it something else now
        * IBM CEO takes bonus, gets a raise
        * This Graphic Shows Bunch of Desk-Based Exercises for the Office
        * Rhino poaching curbed by drones and satellite data
        * Meet the Startup that Wants to Deliver Your Deliveries (Video)
        * Mobile recap: Apple Watch in April; Outlook here now; Google Now gets apps

        * Terrerobytes: More about the White Sox's fateful dinner
        * Rodon leads White Sox trio on list of Top 100 Prospects
        * Inbox: How will new-look Sox lineup affect Abreu?
        * Keith Law likes the White Sox (more than PECOTA does, anyway)
        * Which prospects will make the Top 100 cut?
        * White Sox embrace their position as favorites
        * White Sox embrace position as contenders

        ...............


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        January 2015
        December 2014
        November 2014
        October 2014
        September 2014
        August 2014
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * Rauner may be shuffling payroll to hide office .....
        * 5 things you need to know this weekend..
        * Ernie Banks' Funeral: Watch Live..
        * Wonkette Week In Review: Everything You Need To.....
        * Chicago says farewell, thanks to beloved Mr. Cub..
        * WATCH LIVE: Teammates, fans remember Hall of Fa.....
        * New By The Hand Club Building is 'Just the Begi.....
        * Cullerton: More information needed on high Raun.....


        * Teammates, fans remember Hall of Famer Ernie Banks
        * Chicago mayor wages lively campaign with no big challengers
        * Up to foot of snow possible for Midwest, Northeast
        * Up to a foot of snow possible for parts of Midwest
        * Pair sentenced to prison for $665 million financial fraud
        * Gov. Bruce Rauner defends paying staff more than Quinn
        * Illinois threaten to withhold funds if district don't test
        * Cardinal George: Doctors have 'run out of tricks' for him
        * Cullerton: More information needed on high Rauner salaries
        * Pro wrestler cheats at Wing Bowl, hides food in fanny pack

        * Bill to ban pure caffeine introduced in General Assembly
        * Rauner defends paying staff more than Quinn did
        * Local lawmakers named to paid committee positions
        * Decision looms on ATV facility in western Illinois park
        * 'Right to Try' bill would give access to experimental drugs
        * Top Rauner staff receiving higher pay than Quinn's
        * Springfield lawmakers want oversight commission to monitor 10th Street rail promises
        * Rauner staff receiving higher pay than Quinn's
        * New DNR director Rosenthal touts experience
        * Rauner wants bureaucratic cuts in education, elsewhere

        * Rauner defends paying staff more than Quinn
        * Are a policy wonk and a former NFL player ready for 2016?
        * McDonald's Super Bowl ad announces free food after CEO change
        * Free food for 'lovin': McDonald's shows off new strategy in Super Bowl ad
        * University of Chicago nurses authorize one-day strike


          * Ernie Banks memorial: 'I needed to come say goodbye'
          * Cicero man commits suicide while in Cook County Jail
          * $300K bail set for man accused of shooting woman
          * Police: Charges filed in Southwest Side shooting
          * Girl, 6, dies after police find her in bathtub in Marquette Park
          * Police look for missing 15-year-old Lawndale girl
          * Police seize $6.7 million worth of cocaine
          * Man found dead after car strikes pole, flips over on Far South Side
          * Roseland man charged with burglary, threatening police officers on West Side
          * 2 businesses robbed on Northwest Side


          * Springfield Attorney Picked To Chair Illinois Gaming Board
          * Up To 8 Inches Of Snow Forecast For Springfield Area
          * Could Rauner's Spending Hold Derail New Train Routes?
          * Listen to State Week - January 30, 2015
          * Rauner Staff Receiving Higher Pay Than Quinn's
          * Rauner Defends Higher Staff Salaries
          * Unmasking Ernie Banks
          * Guzzardi Wants Parents To Be Able To Opt Kids Out Of Testing
          * National Weather Service Latest Snow Projections
          * Rauner Tells U Of I To Cut Bureaucracy


          * In My View: Remembering Mary Lou "Smokey" Schneider
          * Charles Krauthammer: Auschwitz, today
          * Bill to ban pure caffeine introduced in General Assembly
          * Rauner defends paying staff more than Quinn did
          * Local lawmakers named to paid committee positions
          * Decision looms on ATV facility in western Illinois park
          * 'Right to Try' bill would give access to experimental drugs
          * Our Opinion: Residency not the best gauge of loyalty
          * Cary Collins: Other options for fixing Illinois' pension problems
          * E.J. Dionne: For the Patriots, without apology


          * RE/MAX River Cities reports results
          * LIVE! vs. Penn State
          * Smoky fire at Champaign house put out quickly
          * Daily Digest 1/31/15
          * Lawmakers propose property tax breaks: Analysts say there’s always a tradeoff
          * Need to know: Snow-related parking restrictions
          * Benton fire chief resigns
          * Winter storm warning takes effect at 9 p.m.; up to 9 inches possible
          * Road, snow plow information
          * More fires in Marissa; one destroys town museum


          * One shot in Elgin home invasion
          * One arrested after Elgin stickup, police say
          * Chicago mayor wages lively campaign with no big challengers
          * Counties want to weigh in on pipeline permitting process
          * Dubuque school qualifies for free breakfasts, lunches

          * 013115-spt-siu-wbb-pierre2
          * Democrats Court Ex-Congressman for Rematch
          * EPA, Farm Bill, Cuban trade among topics a...
          * “Human trafficking for sexual exploitation...
          * U.S. Congressmen Take Ceremonial Oath in B...
          * Despite Deep Hole, Dems Optimistic About T...
          * Congressional swearing-in held at Benton, ...
          * U.S. reps from suburbs sound off on Obama'...
          * Steward S. D. Stiles Jr., assistant pastor...
          * Pro-Amnesty House Republican To Deliver Sp...

          * Drive to repeal medical device tax no slam......
          * Guest lineups for the Sunday news shows...
          * Payday Lenders Surround U.S. Military Base......
          * American Sniper Critics vs. Manliness...

          * Obama Has Given Iranians “80 Percent of Wh......
          * Congress already listening to Netanyahu on......
          * How Congress voted this week...

          * Tryon Petitions Madigan to Reinstatement House Mass Transit Committee
          * Illinois Watchdog Radio - Live on IR
          * Thorner: Where's "The Ticket" for school choice in Illinois?
          * District 303 School board candidate: Defund PARCC, repeal Common Core
          * Budget Crisis Task Force Examines Illinois’ Debt Woes
          * To Cut Costs, Suburbs Eye Police Dept. Merger
          * State’s High Court Hears IG’s Case
          * Can We Trust The Infrastructure Trust?
          * Numbers Are In! Illinois Leads In Most Government Bodies
          * Check Out Chicago’s New Infrastructure Trust Bylaws


          * IDHS reminds eligible workers to take advantage of free tax help and the Earned Income Tax Credit (EITC) - More than 30 sites offer free tax services Statewide
          * IEMA, American Lung Association Launch Health House - Radon Excellence Program in Savoy - Two Champaign builders coordinating with Heyworth radon mitigator in program to reduce radon-related lung cancer risks in new homes
          * One Confirmed Case of Measles in Illinois
          * Governor announces latest round of agency appointments
          * Rauner announces “Turnaround Team” - Stellar team to help turn Illinois around




              Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller