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Reform and renewal, Part 97,487 - UPDATED x1

Monday, Aug 28, 2006


How does someone who lost a $250,000 state consulting gig — apparently for doing no work — get a $900,000 no-bid contract a few months later from Gov. Blagojevich’s administration?

That was the good fortune of Chicago lawyer Myron “Mike” Cherry, a major Blagojevich donor who is the main protagonist in yet another story of clout and big money in state government.

Cherry, a prominent Democratic fund-raiser who is linked to at least $60,000 in contributions to Blagojevich, has not been accused of any criminal wrongdoing.

But a 2004 investment proposal at the state Teachers Retirement System that would have netted Cherry the $250,000 has drawn scrutiny from federal investigators probing corruption at the pension system and under Blagojevich.

The feds have been investigating whether Blagojevich and fund-raisers Antoin “Tony” Rezko and Christopher Kelly were involved in a secret scheme to steer state pension business to top campaign donors — an accusation all three have adamantly denied.

Read the whole thing.

UPDATE: From a press release:

DuPage County State’s Attorney Joe Birkett called on Governor Rod Blagojevich to stop stonewalling on a secret no-bid contract to a top Democratic contributor.

When Crain’s Chicago Business first revealed the existence of a no-bid contract to lawyer Myron “Mike” Cherry on Feb. 22, 2005, the administration refused to comment on the scope of the work. In today’s Sun-Times, the paper revealed that Cherry was paid $900,000 in six months for work the administration refuses to detail.

“The public has an absolute right to know specifically what work was done by Myron Cherry to justify nearly $1 million in payments in six months,” said Birkett, running mate for gubernatorial candidate Judy Baar Topinka, the state Treasurer. “At a minimum the administration should turn over Cherry’s billing records.”

“Cherry is one of the most prolific Democratic fundraisers in the state. He has given Rod Blagojevich in excess of $60,000,” Birkett noted. “We need answers about this sweetheart contract.”

Birkett said the contract is especially suspect because several months before the no-bid contract, Cherry was poised to receive a $250,000 fee from the administration that the Teachers Retirement System determined was not justified. That potential fee is among those under investigation by the U.S. Attorney’s office, according to published reports.

“Until the Blagojevich administration answers questions about this contract, it will strongly appear that it was determined to reward a major campaign contributor. That is exactly the type of pay-to-play politics Rod Blagojevich said he would halt when he became governor,” Birkett added.

- Posted by Rich Miller        

  1. - dumb ol' country boy - Monday, Aug 28, 06 @ 5:28 am:

    Man I wish I had connections like that…. I hope voters are going to wake up and see what this Gov and his administration really are….It appears this Gov. Rod is worse then the former indicted Gov. George, I would have thought that Rod would have came into the office and changed things, for the good, but it appears things have gotten worse and are out of control. I believed the Dems were in a position to take offcie, do the right thing, and probably secure those offices for several terms, but not with the likes of these elected officials. I believe its only a matter of time before George and Rod are cellmates. I wonder if the US Attorney will act before Novemeber or after?????? Has anyone got a total dollar amount on what was spent on this contracts in question, and how much taxpayer dollars have been spent in legal fees? Also Rich have you heard anything about Rod’s Campaign Fund taking a hit by the feds in the next 45 days or so ???

  2. - Leroy - Monday, Aug 28, 06 @ 6:51 am:

    Well I am sure running these stories non stop in the newspaper every day is going to stop these problems in the future.

    Future governors will *never* do anything like this.

  3. - Middle Majority - Monday, Aug 28, 06 @ 8:18 am:

    I had high hopes for this governor when I supported him for election. I hoped for an end to “business as usual” and believed that a change of leadership would refresh an old and stagnant system even if he wasn’t a perfect match with my ideology.

    I was wrong. He has disappointed me in more ways than I can list and made government worse rather than better. I find it very demoralizing.

  4. - Wumpus - Monday, Aug 28, 06 @ 8:22 am:

    Future governors will do it. They are egomaniacal and don’t learn. Exhibit A; Gov Elvis

  5. - Anon - Monday, Aug 28, 06 @ 8:29 am:

    I feel sorry for the guy in the photo. Don’t know who he is but I know he’s not Mike Cherry.

  6. - Anon - Monday, Aug 28, 06 @ 9:03 am:

    The same way TEAM Marketing got a contract after they wrote the RFP specs. Where was the sponsor for the State Fair and other agencies they promised?

  7. - Justice - Monday, Aug 28, 06 @ 9:24 am:

    Certainly Blogo and company will deny everything, continually, adamantly, and with great emphasis on their honesty and well meaning. You can take classes in this process from inmates in prisons all over the US. Cherry is being looked at hard by the Feds. However, it’s no doubt that Blogo’s team members, those now hiding in other agencies, will be the first to be indicted. Then the Feds will send the bus down the ranks for the “loyal to the end”, “he’s the best governor Illinois has ever had”, staff to throw each other under it. In fact, that bus is already rolling and the throwing is taking place. As to indictment of Blogo himself, likely, but the indictment of him and others is not likely to happen till well after the election. The Feds are not schedule bound. They are thorough and will deal out justice when they are ready. Though served cold, justice will be served. Don’t you just love that catchy sound…..thump, Thump, THUMP!!!

  8. - Bubs - Monday, Aug 28, 06 @ 9:43 am:

    I’d like to see how a small law office like Cherry’s racked up $900,000 in billings in six months.

  9. - Truthful James - Monday, Aug 28, 06 @ 9:43 am:

    We still will have to have the Fitz re-appointed by the new Congress. won’t we?

    If so, watch for some political appointment to be Rahmed through.

  10. - VanillaMan - Monday, Aug 28, 06 @ 9:54 am:

    Once again, we will all be expect to give Blagojevich the benefit of a doubt regarding this series of missteps.

    Voters need to demand better. He is the governor of Illinois, not frat president. If he wanted to run a government like this, he could have grabbed a county, or a township, or a city.

    Blagojevich never grew into the job. He doesn’t seem interested in being governor. He likes campaigning and wants to be President. His mind has never been focused much on serving us in Springfield. He didn’t want to even go there.

    This election is about him. He fails continually. He doesn’t admit accountability when these event are uncovered. He only promises resolution after he feels threatened politically. He is a very poor governor and he should not have even asked for renomination, let alone our vote in November.

    Don’t defend him. We don’t need him. It is time to let someone else take a crack at doing the job. Blagojevich had his chance, and he whiffed. That what we do in democracies, change officeholders when they screw up. That is what we need to do in November.

  11. - Justice - Monday, Aug 28, 06 @ 10:01 am:

    VanillaMan……..nice presentation of the facts!! Couple that with the loons he surronded himself with and you can only imagine what would be in store for us at the federal level. Where is that bus?!!!!

  12. - googler - Monday, Aug 28, 06 @ 10:13 am:

    Looks like the sun-times lazily googled images for Mike Cherry and got this guy (
    at U of C, instead of this guy (on L) who is Myron “Mike” Cherry (

  13. - Chicago Guy - Monday, Aug 28, 06 @ 10:22 am:

    Anybody know who the guy in the Sun-Times photograph is?

  14. - Truthful James - Monday, Aug 28, 06 @ 10:30 am:

    And loons they must be. Their job was to groom Blago for national office — it would have been a wonderful, long term, ever enriching employment.

    They were not even bright enough to do that.

  15. - Hard Working Taxpayer - Monday, Aug 28, 06 @ 11:21 am:

    Rich: The story is not attached and I can’t seem to find it. Could you let us know where the story was printed?

  16. - Go JBT - Monday, Aug 28, 06 @ 11:25 am:

    Hardworking: It’s in today’s Sun-Times.

    What I want to know is where is the outrage over these dealings? This one is particularly ridiculous.

  17. - steve schnorf - Monday, Aug 28, 06 @ 11:44 am:

    The story is misleading. It implies he had a state consulting contract that he lost for doing no work. In fact, he had a consulting contract with a private company, for which he was paid nothing because the state suspected he had done no work. If he did do any work (we don’t know, do we?), he was unfairly penelized.

  18. - Budget Watcher - Monday, Aug 28, 06 @ 12:39 pm:

    I didn’t find the story misleading at all. The article clearly stated that Mr. Cherry was in line to receive $250,000 in fees from Sterling Venture. The TRS staff couldn’t find that he did any demonstratable work, so why the fees? That’s a fair question.

    Plus, the story didn’t say he wasn’t compensated from Sterling Venture. He may well have received some payment for his time. We don’t know. All that we know is that Sterling didn’t get the $25 million investment deal.

  19. - Lincoln Lounger - Monday, Aug 28, 06 @ 12:55 pm:

    There’s no end to the Blago sleaze. I feel sorry for his kids. They are going to have to travel with him constantly in order to continue to shield him from the media’s “nasty” questions. Watch for more letters of outrage from Patti ahead.

  20. - chinman - Monday, Aug 28, 06 @ 1:01 pm:

    thank you justice.

  21. - Anonymous - Monday, Aug 28, 06 @ 1:04 pm:

    Wow…the amount of money is obscene.

    No wonder so many people fall below the poverty line when taxes are used to help friends instead of those who actually need help.

    Is there any party without a record of payoffs and corruption?

  22. - steve schnorf - Monday, Aug 28, 06 @ 2:01 pm:

    For better or worse, the amount of the fee isn’t obscene. It’s well below the customary fee in that industry; 2% might be customary and 3% wouldn’t be all that unusual.

  23. - Johnny K - Monday, Aug 28, 06 @ 2:22 pm:

    Is there any party without a record of payoffs and corruption?

    Yes. The one with no power.

  24. - Hard Working Taxpayer - Monday, Aug 28, 06 @ 2:50 pm:

    It is my understanding that this administration is currently ignoring any and all FOIA requests.

  25. - chinman - Monday, Aug 28, 06 @ 3:14 pm:

    what about it rich? Is Hard Working taxpayer correct?

  26. - Rich Miller - Monday, Aug 28, 06 @ 3:19 pm:

    I have no idea what that person was talking about. All you gotta do is click a link.

  27. - Anon. - Monday, Aug 28, 06 @ 4:16 pm:

    The public has a right to the documents. $900,000 in six months is absolutely breathtaking. What a rip off. If this contract and billings were clean, the Gooberner would not hesitate to comply with the FOIA request. Who are they to determine what the public can see - we are the ones paying for this crap.

  28. - Shallow Pharnyx - Monday, Aug 28, 06 @ 6:19 pm:

    This administration may very well be ignoring all FOIA requests. They have a tendency to believe it isn’t illegal until the courts declare it so. That was the reasoning used when raiding certain funds. Even tax check off funds aren’t immune.

  29. - 4% - Monday, Aug 28, 06 @ 10:03 pm:

    Myron Cherry didn’t rpi off taxpayers - he stole from insurance companies using the state. He (along with Sheila Nix) convinced the Gov to expand the so-called Spitzer investigation into IL. They BILLED insurance companies, issued subpoenas, and set up a hotline.

    The last time I spoke with the Director of Insurance, they informed us that less than 5 complaints were filed using the hotline and they found no problems. The only cash recouped by the state was the result of the NY investigation - IL signed onto the agreement.

    This was egrigious and a shakedown of the insurance community.

  30. - disgusted - Monday, Aug 28, 06 @ 10:04 pm:

    This administration is ‘mind numbing’. Nothing surprises me anymore. They are still hiring and promoting people without interviewing. To make matters worse, all the unqualified political hacks (TM IV’s and below) were just put into the Teamster Union.

  31. - Not SS - Monday, Aug 28, 06 @ 10:31 pm:

    It is not so much the amount of the contract that is the crux of the news story especially given the fact that the administration won’t release any of the details. Once again you shouldn’t make light of the real issues. Is it really that hard to figure out?

  32. - Arthur Andersen - Monday, Aug 28, 06 @ 10:43 pm:

    I’m told that Myron “call me Mike” billed these insurance brokerages at a rate of $600/hour and presented his “invoice for services rendered” to the State agency client on a single sheet of paper. That’s it. No detail, no report, nada.

    A bit unusual, to say the least. Maybe it’s time for the inspector general to ferret out some more wrongdoing.

    One more observation: Steve, I don’ t know how many placement agreement/consulting proposals you’ve seen in recent years, but I’ve seen quite a few. I can’t recall a one higher than 1.5%, and none anywhere near 3%. We may run in different market segments, though.

  33. - steve schnorf - Monday, Aug 28, 06 @ 11:52 pm:

    I was just pointing out that the fee wasn’t “obscene”. Neither was Kjellander’s. If the allegation is that there was some impropriety involved in the selection process, that’s a different question. I just don’t think people should get that excited about the numbers, because they’re not abnormal. I know they sound huge, but in the private equity and real estate market, in deals of $5m to $50m, I haven’t seen anything lower than 2% lately.

  34. - Truthful James - Tuesday, Aug 29, 06 @ 8:27 am:

    I know obscenity when I see it. And there was Bob the Shill-lander provide yeoman service to Bear Stearns with respect to the $10 Billion Pension Funding and Payment Postponing Bond Issue, which freed up money perviously in the Budget for the Governor to waste as as he wished.

    What yeoman service did this Republican National Committeman from Illinois provide to the Democratic Administration? What savvy financial advice did he provide either party? None.

    He was paid $800K plus purely and simply to break the Republican Caucus in the Senate — allegedly his own party — and get approval of the Issue so that the underwriters would live long and prosper.

    The amoral have no concept of obscenity.

  35. - steve schnorf - Tuesday, Aug 29, 06 @ 12:20 pm:


    Kjellander owed no service to the administration. He was paid by a private company, not the state. The same is true of this other guy, who’s name I now forget.

  36. - Truthful James - Tuesday, Aug 29, 06 @ 1:10 pm:

    I can not believe that you are this disengenuous.

    The Administration could not have sold the bonds but for the Shill-lander. It was aware of the fees, being paid out of the underwriters’ pockets. It was an underwriter provided service to the Administration.

    The alternative was to reduce the size of the Bond Issue spread, and thus the size of the bond issue, saving taxpayers money. The failure to question issuance expenses is the greatest source of pin stripe pork.

  37. - steve schnorf - Tuesday, Aug 29, 06 @ 2:42 pm:


    then you have access to information I don’t have. If Bomke, Dillard, et al voted for the pension deal because Kjellander asked them to, I would like to see proof. I would even like to know your real name. Anonymous accusations are pretty easy to make.

    So you believe the bond spread on a $10B bond issue would have been reduced by eliminating an $800,000 dollar expenditure which is, if my math is correct, 8/1000 of a point? I would have to know a lot more, such as what fees other proposers were paying to consultants for placement, and what spread they were offering, to be as sure as you seem, but I’m very doubtful. You must really be an insider.

Sorry, comments for this post are now closed.

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