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.


TrackBack URI

Sorry, comments for this post are now closed.


* $3 million in one pop from Rauner
* Reader comments closed for the weekend
* SUBSCRIBERS ONLY - State House fundraising report
* *** UPDATED x1 *** Has the haymaker punch arrived?
* SUBSCRIBERS ONLY - State Senate fundraising report
* Third straight poll shows Rauner leading Quinn
* Last call for tickets!
* Vast Majority of Illinois Voters Support Renewable Energy, Energy Efficiency
* Sun-Times reporters want you to sign their petition
* Same song, different century
* Question of the day
* Quinn finally wins a newspaper endorsement!
* SUBSCRIBERS ONLY - Today's cable TV buy report
* SUBSCRIBERS ONLY - Supplement to today’s edition: Crosstabs, TV ads
* Report: Another tie between Rauner and CS-T chairman
* Bost's "anger," Cook's ratings, Foster's ad
* $580 MILLION EXELON RATE HIKE?? That’s the price tag for their nuke bailout…EVERY YEAR!
* *** UPDATED x1 *** Rauner pumping dollars
* Rauner pushing IDOT back into the news stream
* Gov. Quinn runs new TV ad featuring FLOTUS
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* No, your eyes didn't deceive you
* Good morning!
* 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

          
        * CVS disables NFC terminals, stops accepting Apple Pay, Google Wallet
        * CurrentC Is The Big Retailers’ Clunky Attempt To Kill Apple Pay And Credit Card Fees
        * Google Nexus 9, Nexus 6, iPad Air 2 comments & more – Pocketnow Daily Recap
        * Android Lollipop imminent, new Nexuses nearing, no more Nokia | Pocketnow Weekly 119
        * U.K. Startup Swytch Is Building An App To Open Up The ‘Burner’ Phone Number Market
        * Lockdown Pro allows selectively locking almost any app
        * Pronto Fast Charge battery gives a full charge in 5 minutes

        * Whisper Suspends Some Editorial Staff Following Guardian Report
        * T-Mobile’s Legere Launches Twitter Storm to Talk Apple SIM (And Poke Rivals)
        * This Week's Top Downloads
        * The Most Germ-Infested Item in the Office Might Be the Coffee Pot
        * CVS, Rite Aid Shut Down Support for Apple Pay
        * Know How to Spot the Signs of a Hidden Handgun
        * Twitter Acquires Twitpic's Archive, Saga Finally Ends

        * World Series Game 4: Notes and discussion
        * A 15-GIF salute to Moises Sierra's White Sox career
        * Konerko caps stellar career with Clemente Award
        * Konerko caps stellar career with Clemente Award
        * World Series Game 3: Notes and discussion
        * Rollins, Konerko named co-winners of Clemente Award
        * Alexei Ramirez and Adam Eaton Gold Glove finalists, but maybe not f...


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

        Archives
        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


        * Gov. Quinn welcomes home Illinois National Guar.....
        * U.S. nurse quarantined over Ebola calls treatme.....
        * Police: Enraged Gary resident guns down neighbo.....
        * Chicken Kiev linked to Minnesota outbreak recalled..
        * Thief Steels $8,000 from New Beginnings Church..


        * Few details offered on quarantines over Ebola
        * Across US, Dems enlist Latinas for top of ballot
        * State Farm seeks to test drones in Illinois
        * Costly Capitol renovations recognized for design
        * Chicago Fire Department hired few blacks in 2014
        * Illinois lieutenant governor candidates on issues
        * Illinois lieutenant governor candidates bios
        * Lieutenant governor picks hope to help lead
        * Chicago Fire Department hired few blacks in 2014
        * Coroner's jury: July SWAT shooting justified

        * Feminist Gloria Steinem endorses Quinn for governor
        * Madigan, Rauner spend big on Illinois House races
        * Officials rethink early vote-counting after Madigan ruling
        * Minimum wage increase supporters urge early voting
        * Sun-Times political reporter resigns following Rauner complaint
        * Minimum wage hike supporters urge early voting
        * Federal judge orders court-appointed monitor for IDOT hiring
        * Rep. Raymond Poe to undergo stem cell transplant
        * Bill Clinton campaigns for Quinn, Durbin
        * Quinn, Rauner spar over jobs, taxes

        * Why the Chicago-Illinois tech startup partnership won't be easy
        * Republican hopes fade for a comeback in U.S. House races
        * Jennifer Pritzker talks about a year of change
        * How much money do Exelon's nukes really make?
        * Shopping startup Trunk Club sizes up the women's market


        * Keep it peaceful in Ferguson, Mo.
        * Why wasn’t Ebola doc kept under scrutiny?
        * Enthusiastic student Stan Kij, 25, dies of stomach cancer
        * Judge rejects Pistorius comparison, gives 17-year sentence in murder-for-hire plot
        * Editorial: Bruce Rauner for governor
        * Back to the past with mayor’s move
        * Illinois needs better way to deal with terminally ill inmates
        * At panel on school closings, board acknowledges more planning needed
        * Marina City residents reminded to watch their step during Wallenda’s walk
        * Republican senators question Quinn’s IDOT scandal response


        * 2 charged in the shooting of an off-duty Chicago police officer
        * 5 hurt in shootings Saturday
        * 2 held after boy, 13, fatally shot in Gary
        * Man charged with failing to reveal he had HIV to partner
        * Man charged with possession of child porn
        * Man held on $1M bail in August slaying on South Side
        * $500K bail for man accused of taking semi, critically injuring cyclist
        * 1st phase of $719 million Tri-State, I-57 interchange opens
        * $1M bail for teen charged in fatal Englewood shooting
        * 2 dead, 8 hurt in shootings Friday into Saturday


        * Listen to State Week - October 24, 2014
        * 2014 Election Coverage: Citizens, here's your homework!
        * 2 dead, including gunman, in high school shooting
        * Prosecutors want more of indicted police commander’s 'bad acts' in court
        * Prosecutors want more of indicted police commander's 'bad acts' in court
        * Bedrock 66: Charlie Parr Plays Springfield Friday
        * Oberweis Would Back Federal Same Sex Marriage Law
        * Wild Bison Return To IL
        * Scary Story: The Diviner by Susan Vondrak
        * Artist Profile: Local Troubadour Tom Irwin


        * Michael Bromberg: Benedictine looking ahead at changes in higher ed
        * Charles Krauthammer: Barack Obama, aggrieved bystander
        * Feminist Gloria Steinem endorses Quinn for governor
        * Madigan, Rauner spend big on Illinois House races
        * Our Opinion: Bell, Manar, Davidsmeyer endorsed in state legislative races
        * Craig Burns: Honesty, integrity in great supply at CWLP
        * E.J. Dionne: Ebola, pandering and courage
        * Esther Cepeda: Benefits of closing the word gap
        * Officials rethink early vote-counting after Madigan ruling
        * Our Opinion: Frerichs has the expertise to be Illinois treasurer


        * Building residents warned about Wallenda's stunt
        * Glen Carbon man faces child porn charges
        * Marriages/divorces
        * Car seats given away at safety check
        * Rushville-Industry to host; New Berlin hits the road
        * Tate: Illini can celebrate hard-fought win
        * Football pick em week 10 – Ohio State
        * Illinois' grade vs. Minnesota: A
        * Class 2A Boys Regional Soccer Championship: Danville vs Central
        * In the grand scheme of things ... victory is a relief


        * Mo'ne Davis with Jackie Robinson West starts World Series
        * LeGere: Is there enough leadership among the Bears (if it matters)?
        * Football: Class 7A playoff pairings
        * Football: Class 8A playoff pairings
        * Trestman praises Ola's work on Bears' line

        * Patrick Cannon defense strategy rare but n...
        * Feds fine Jesse Jackson Jr.'s campaign com...
        * Ex-Congressman Jesse Jackson Jr. faces sen...
        * Representative Jan Schakowsky Sends Letter...
        * Rep. candidate pushes to uphold marriage b...
        * Reps. Schakowsky and Waxman Introduce Bill...
        * Statement by Representative Jan Schakowsky...
        * U.S. House Passes Resolution Condemning An...
        * FAA Rejects Call For New O'Hare Noise Stud...
        * Representatives Quigley, Duckworth, Schako...

        * Ted Cruz Talks His Plan To 'Abolish The IRS'...
        * Our View: 17th Congress: Cheri Bustos...
        * Our View: 17th Congress: Cheri Bustos...
        * Our View: 17th Congress: Cheri Bustos...
        * Our View: 17th Congress: Cheri Bustos...

        * Sen. Mark Kirk helps introduce anti-cyberb......

        * Great School Tips You Require To Know About
        * The Weekend In Chicago Rock
        * Anatomy Of A Tribune Editorial
        * More Illinois voters report machine switching votes from Dem to GOP
        * More Illinois voters report machine switching votes from GOP to Dem
        * Clowns With Sex Toys Attacked Illinois Family
        * Oberweis: DOJ needs to investigate threats against Pastor Corey Brooks and his family
        * More reports on potential voting fraud in Rock Island County, Illinois
        * More reports of potential voting fraud in Rock Island County, Illinois
        * Have You Seen This Young Woman?


        * Governor Quinn Announces Major Expansion of Public Recreational Access at Lake Calumet - Project Will Be Centerpiece of Governor’s Millennium Reserve Initiative
        * Governor Quinn Welcomes Illinois National Guard Brigade Home from Kuwait - Illinois’ 108th Sustainment Brigade Returns from Deployment
        * Rauner rips Quinn on IDOT patronage oversight
        * Governor Quinn Announces Winners of 2014 Illinois Export Awards - State’s Trade Programs Help Companies Increase Global Sales
        * Governor Quinn Directs Illinois Department of Public Health to Require Quarantine to Protect Against Ebola




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