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Today’s long read

Friday, Aug 1, 2014

* Tribune

As Gov. Pat Quinn’s aides sought to pump up an anti-violence program ahead of his November 2010 election bid, they decided to add to the pot $3.76 million in federal disaster recovery funds from Hurricane Ike to make loans to small businesses.

In the rush to get the program launched, the Quinn administration hired a financially troubled West Side business development group to dole out loans, despite concluding the organization had recently misspent state grant funds.

The group, Chicago Community Ventures did not make a single loan, but was allowed to keep more than $150,000 when the contract was nixed, the Tribune has found.

Quinn aides say they caught the problems early by carefully monitoring the group and opted to let the organization keep the money because it had been spent appropriately on administrative costs.

But the administration would not specify how the group was vetted and whether other warning signs about the group’s finances were taken into consideration before it was selected.

Go read the whole thing.

* The story was apparently sparked by a letter written by US Sen. Mark Kirk, a Bruce Rauner ally, a week ago

The Illinois Auditor, State’s Attorney office and the Audit Commission have only focused on the estimated $50 million in state funds used for the NRI. I am concerned that without your investigation into the micro-lending component of the NRI, there will be no oversight of the $5 million in federal disaster funds used for this questionable program.

I ask that you investigate and make public how these funds were used. I also request answers to the following questions regarding the NRI micro-loan program.

1. Who were the final recipients of the NRI micro-loan program and where were they located?

2. Did any of these businesses lie within areas of significant damage caused by Hurricane Ike?

3. What criteria was used to select micro-loan recipients?

a. Who chose the criteria?

4. What criteria was used to select micro-loan lenders?

a. Who chose this criteria?

5. How many jobs were created by this micro-loan program?

a. Which businesses created these jobs and what metrics were used to verify job creation statistics?

6. Was the NRI micro-loan program an eligible activity under the law that appropriated the money?

7. Did the Illinois Department of Commerce and Economic Opportunity accurately report the functions of the micro-loan program in their mandated Ike quarterly reports to allow for proper HUD oversight?

8. The Accion press release stated minimum requirements to obtain a NRI micro-loan. Were all of the recipients properly notified of the disaster requirements necessary to qualify for Ike Disaster Recovery Funds? Were these requirements posted online?

9. Did all of the recipients of the loans meet Ike Disaster Recovery Funds requirements?

10. I understand Illinois submitted waivers to forgo a portion of the HUD requirements for the Ike funds. Did these waivers permit micro-lending activity?

In addition to the answers to these questions, I would like any and all documents related to the site visits and subsequent concerns that were forwarded to the lenders as mentioned in the state’s Ike Quarterly Performance Reports to be made public.

Discuss.

- Posted by Rich Miller        


14 Comments
  1. - MrJM - Friday, Aug 1, 14 @ 12:15 pm:

    Looks like a missed opportunity for Mark Kirk to call somebody Nazis…

    – MrJM


  2. - A guy... - Friday, Aug 1, 14 @ 12:18 pm:

    ===Quinn aides say they caught the problems early by carefully monitoring the group and opted to let the organization keep the money because it had been spent appropriately on administrative costs.===

    They caught the problems early? Like when it was in a casket, but not yet buried?

    Don’t know whether to laugh or cry. His quick action only wasted $150K today. Let’s call it savings. Ugh.


  3. - Norseman - Friday, Aug 1, 14 @ 12:22 pm:

    This is not helping!

    The hits keep coming for our incompetent Gov. His campaign action so far focuses on a few ads complaining about rich guy not paying his taxes. If Quinn didn’t have so much baggage, this may be sufficient. However, almost every day we get another cut of the thousands that may spell doom to his disastrous rule. To be replaced by the Republican Blagojevich who likes to promise the world while attacking boogie men.


  4. - Empty Suit - Friday, Aug 1, 14 @ 12:28 pm:

    Ok in the real world we all know the value of $150k. they act like it’s pocket change. Geesh!


  5. - OneMan - Friday, Aug 1, 14 @ 12:32 pm:

    Legit questions, suspect the answers will result in some more Quinn spin.


  6. - Mason born - Friday, Aug 1, 14 @ 12:46 pm:

    I wonder if Kirk stumbled upon the root cause of the investigation?


  7. - Cassiopeia - Friday, Aug 1, 14 @ 12:58 pm:

    This one has legs and the more people dig into DCEO grants the more legs it will have, especially if they look at the “member initiative” grants being run out of the Grants Management Unit run out of the Director’s office in Springfield.


  8. - Anonymous - Friday, Aug 1, 14 @ 1:08 pm:

    The first question I had when I read the initial story related to Kirk’s second question. Aren’t funds given for disaster relief supposed to be earmarked to be spent on relief from the disaster the funds are in response to? How in the world would that (legally) translate to this program?


  9. - Soccermom - Friday, Aug 1, 14 @ 1:24 pm:

    Here’s a real difficulty — in the neighborhoods that most need state input and assistance, there are very few organizations that have trained professional staff and access to adequate funds.

    So, from a State perspective, you either try to funnel funds through professionally run not-for-profits that don’t have a real connection with the neighborhood you’re targeting, or you work with an on-the-ground organization with good intentions but not much in the way of trained, experienced administrators.

    I’m not saying that it’s okay to waste taxpayer dollars. But I am saying that it’s a tough problem to resolve in a way that works for both neighborhoods and taxpayers.


  10. - Amalia - Friday, Aug 1, 14 @ 2:13 pm:

    afraid to say it, but Warren Ribley might have a jacket waiting for him.


  11. - Anonymous - Friday, Aug 1, 14 @ 2:16 pm:

    Kirk the Merciless.


  12. - VanillaMan - Friday, Aug 1, 14 @ 2:16 pm:

    I’m not saying that it’s okay to waste taxpayer dollars. But I am saying that it’s a tough problem to resolve in a way that works for both neighborhoods and taxpayers.

    I agree with you, but I think what I would say is that it is a tough problem to resolve by tossing millions in grant money at it. The means they used and believed in, haven’t work, don’t work and will not work in a situation like that. It is their responsibility to ensure that the problem is addressed in an effective way and they utterly failed. And it isn’t a surprise that it did fail either.

    That should have never been a solution, yet - they did it. But perhaps, they didn’t waste all those millions in order to actually solve the problem.

    The spent our money to win an election.

    Hey, Quinn looked like a loser when those grants were announced and I used to think that he was helping out the Democrats who would go hungry under a Brady Administration. But - he didn’t have to do these grants for THAT reason until AFTER the election. Pat Quinn could have handled the grants if he lost - too.

    He didn’t do that. Pat Quinn did this in time to get the political benefits that $54,500,000 in grants could get him.

    One last question - how many Illinoisans got a part of that $54,500,000, and were Republicans? If there were more than a few, then that would also demonstrate that Quinn had a sincere interest in the region, regardless of politics - right?

    Just asking.


  13. - walker - Friday, Aug 1, 14 @ 2:17 pm:

    Very fair questions about why federal funds were diverted from their original intended use. Kirk is right to ask, regardless of the political timing. He should be asking these kinds of questions every year.

    Local governments at all levels, do this frequently, and assume it’s their right to divert and mislead. Just watch your own local village, or county, handle state and federal largesse.


  14. - steve schnorf - Friday, Aug 1, 14 @ 2:21 pm:

    blah, blah, blah so far


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