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Friday, Dec 14, 2007 - Posted by Rich Miller

Another bizarre week in Bizarro Land. I’m ready for some partying.

If you can’t make it to one of our holiday parties, Illinoize is the next best thing…

And now, a particularly apt holiday tune: “Merry Christmas, I don’t want to fight tonight,” by the Ramones…


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This just in… Monday’s House session canceled *** Judge allows biz groups to join lawsuit *** Hint of special session in the air ***

Friday, Dec 14, 2007 - Posted by Rich Miller

* 2:21 pm - From a letter sent by House Speaker Michael Madigan…

On Monday, December 10, I indicated to you that the House would return to Springfield next week to consider gambling expansion and mass transit legislation. However, in light of certain subsequent developments this week, the legislative process will be better served by holding session on these topics at a later date. Therefore, after having consulted with Leader Cross, next week’s session is cancelled.

The current environment underscores the critical need to create a genuinely independent Illinois Gaming Board. As of yet, only Leader Cross has offered his full support for the gaming regulation and ethics reforms detailed in House Bill 4194. Other legislative leaders and Governor Blagojevich have neither endorsed this proposal nor offered a sensible, equally stringent alternative.

To say the least, this is a puzzling state of affairs. Yet I have hope that there may be a new sense of urgency and appreciation for how important it is that, if we are to join the ranks of major gambling states, we agree to establish a regulatory structure commensurate with such scale and remove any concerns that casino operators, their agents and affiliates might have undue sway over elected officials. Again, to do anything less would be the height of irresponsibility and endanger our ability to improve schools, operate the nation’s second largest transit system and rebuild essential infrastructure that is critical for the state’s future and economic health.

I will continue to do my best to give you as much advance notice as possible when new session days are planned. In the meantime, I would ask that you encourage recalcitrant legislative leaders and the governor to embrace reform so that gambling in this state may operate in a completely above-board manner and without the slightest hint of impropriety, scandal or corruption.

*** 4:07 pm *** This is not unexpected, but a Cook County judge allowed a business coalition to join a lawsuit in that county to stop Gov. Rod Blagojevich from implementing his health insurance plans without an appropriation and despite a ruling by JCAR blocking them. A hearing is scheduled for Tuesday. The biz groups had been blocked from filing their own lawsuit by a Sangamon County judge, who cited the Cook County lawsuit’s preexistence as his reason.

Statement from Greg Baise and Ron Gidwitz…

“We are very pleased that Judge Epstein has granted our intervention into this important legal case. The judge very clearly recognizes the significance of the case and its potential impact on Illinois taxpayers and the state’s fiscal health. We look forward to a full and fair hearing and the opportunity to have our day in court.”

*** 4:28 pm *** I was told earlier this afternoon to “stand by” for any possible announcements from Gov. Rod Blagojevich. Here’s the press office’s response to Madigan’s letter and a hint of what may be to come

In response, a spokeswoman for Blagojevich tried to steer focus back to the looming financial deadlines for the transit agencies. “Sadly, it’s not surprising that Speaker Madigan would, at the last minute, cancel a scheduled session to consider a plan to fund the CTA,” spokeswoman Abby Ottenhoff said in an e-mail to reporters.

She indicated the governor plans to use his powers to order lawmakers back to the Capitol next week regardless.

The problem is that the Senate Democrats have some serious attendance problems for next week.

…From the AP

A spokeswoman for Governor Rod Blagojevich says the governor plans to call lawmakers back into special session next week and will decide when after talking with other legislative leaders.

Illinois Issues

Spokeswoman Abby Ottenhoff said in a follow-up e-mail that the governor’s office expects to talk to legislative leaders over the weekend and will be in a better position to talk about timing on Monday.

  45 Comments      


What’s the pattern?

Friday, Dec 14, 2007 - Posted by Rich Miller

Frontrunner billionaire Democrat plummets in the polls after press reports that he hit his ex-wife’s shin during a drunken, late-night argument.

Attractive Republican millionaire forced out of race after press reports that he dragged his TV star ex-wife to a swingers club.

High-flying, millionaire out-of-state African-American former presidential candidate and ambassador anti-gay rights ultra-conservative embarassed to no end when blogs report that his daughter is an anarchist lesbian activist.

Universally known, widely acknowledged prohibitive rontrunner ex first lady loses frontrunner status after she and staff go on the attack.

Discuss.

Snark heavily encouraged.

  58 Comments      


Messages to readers

Friday, Dec 14, 2007 - Posted by Rich Miller

* My 2008 intern, Kevin Fanning, has found a place to stay in Chicago this weekend. Kevin will be at the Sunday event (not sure about Saturday yet). Many thanks to all who so graciously offered Kevin a place to stay.

* If you haven’t done so yet, you can purchase tickets here for the December 16th performance of “No-El, Or How the Blagojegrinch Stole Christmas” - Our Capitol Fax holiday party.

* If you can’t make it to Sunday’s event, and can’t make it out Saturday night, either (Voodoo Pilot, 9 o’clock at the Montrose Saloon), but still want to hang with some people, you can find us after the Sunday night show at the Charleston, which is at Hoyne and Charleston a block off Damen and Webster.

* And, finally, I have a few extra tickets to Sunday’s show. If you need a ticket, use the “contact me” button above.

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Protected: SUBSCRIBERS ONLY - Who’s off the ballot today? (Use all caps in password)

Friday, Dec 14, 2007 - Posted by Rich Miller

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Question of the day - Golden Horseshoes, Final Round

Friday, Dec 14, 2007 - Posted by Rich Miller

* Boones gets the best political bar/restaurant in Springfield award. Ellen McElroy-Kenworth and Liz Brown will receive our Golden Horseshoe for best legislative staffer. The winner of best statewide official is AG Lisa Madigan.

* Today’s round will be the last one. Please explain all your votes and try to answer all the questions. Thanks.

1) Best press spokesperson (legislative, congressional, local or statewide)

2) Best lobbyist (Statehouse only)

3) Best Capitol Fax Blog commenter

Remember, no negativity and no snark, and explain your votes, please. This contest is not just based on the number of votes, but on the intensity of the support.

  83 Comments      


Merry Fitzmas!

Friday, Dec 14, 2007 - Posted by Rich Miller

* My Sun-Times column today was written after yesterday’s indictment of Chris Kelly…

After his pal Tony Rezko was indicted by the feds last year, Gov. Blagojevich was asked if he was absolutely sure that his close friend Chris Kelly would escape indictment himself.

‘’Yeah. Yes. They’re two different people, by the way, and it’s a different relationship. Chris and I are much closer. Chris is the head of my political campaign. That’s someone I talk to a lot more frequently. I’m confident, yes.'’

Kelly was indicted Thursday.

The governor befriended Kelly on his way up the political ladder, and the two men talked just about every day for years, often several times a day. Kelly raised a ton of campaign cash, and Blagojevich eventually entrusted Kelly with running his campaign fund. Blagojevich has repeatedly disavowed all knowledge that Kelly was even the least bit crooked. How you can know somebody that well and not have so much as an inkling that he’s not completely on the up-and-up is astounding, to say the least.

But here’s the meat of the story…

Back in 2003, during his first term, Blagojevich gave Kelly a huge governmental assignment: The governor told Kelly to work out a gaming expansion deal.

It turns out that Kelly is something of an expert when it comes to gambling. He has never run a casino, but he loves to bet on sports. According to the indictment, Kelly placed ‘’millions of dollars'’ in wagers with Illinois bookies. In case you’re wondering, that would not be legal.

We don’t know whether the governor and Kelly ever talked about the millions Kelly bet through sports bookies. The governor and Kelly both have said that their conversations often focused on sports, so you’d think Kelly might occasionally grouse about his losses or gloat over his winnings with his good friend. […]

In essence, Blagojevich put the town drunk in charge of deciding who gets a new liquor license.

And now we have a new gaming expansion plan pushed by the governor. Go read the whole thing to see how I sum up its prospects.

* Kass makes a good point about how Kelly’s use of Illinois bookies could mean that the governor’s friend has mob ties

The last bookie who insisted he was completely independent of the Outfit was Hal Smith. His body was found in the trunk of his car. He’d been stabbed and strangled in February 1985. Since then, the completely independent bookie movement kind of fizzled.

* The Sun-Times, meanwhile, takes a look at the Nick Hurtgen re-indictment

[F]or the second time, the governor is identified in a federal corruption indictment — this time as “Public Official A,” a source close to the investigation said.

Former investment banker P. Nicholas Hurtgen allegedly told a hospital executive “Official A” wanted hospital projects steered to a preferred contractor, and that the desire to reward that contractor was “all about money” for political campaigns, Hurtgen’s indictment alleges. The governor’s office issued a forceful denial, claiming not to be that public official.

But, regardless of that denial and Fitzgerald’s admonishment, this much is clear: The indictments of Hurtgen, Christopher G. Kelly and Abdelhamid “Al” Chaib leave Blagojevich facing a world of political, financial and potentially criminal trouble.

* More coverage…

* Tribune Editorial: Merry Christmas, Governor

* Close pal of gov indicted - Blagojevich’s onetime gambling adviser accused of wagering millions, using business to avoid taxes

* Blagojevich fundraiser, adviser indicted in corruption investigation

* Blagojevich friend is indicted

* Governor’s adviser indicted by feds - Christopher Kelly allegedly dodged income tax, paid gambling debts from illegal cash transfers

* Feds indict friend of governor - Blagojevich donor’s tax-fraud charges tied to gambling

* McQueary: Gov’s pal nabbed for greed

…Adding… From the Tribune today…

A federal influence-peddling probe into the administration of Gov. Rod Blagojevich has expanded to include allegations that a prominent Joliet pharmacist solicited campaign contributions in exchange for promises of regulatory favors

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Micromanaging mayor didn’t know about son’s contracts?

Friday, Dec 14, 2007 - Posted by Rich Miller

* Another coinkydink, I’m sure

Mayor Daley’s son Patrick had a hidden interest in a sewer-inspection company whose business with the City of Chicago rose sharply while he was an owner, a Chicago Sun-Times investigation has found.

Patrick Daley invested in Municipal Sewer Services in June 2003, along with Robert Vanecko, a nephew of the mayor. The pair cashed out their small investment about a year later, as federal investigators were swarming City Hall in the early days of the Hired Truck scandal

Here’s the hilarious part…

The mayor’s press secretary said Daley never knew that his son and nephew had stakes in Municipal Sewer Services as the company sought City Hall’s permission to take over two contracts from Kenny Industrial Services.

“Yes, it is the mayor’s son, and, yes, it is also his nephew,” Daley press secretary Jacquelyn Heard said. “But, as you know, the mayor is a very busy man, and he does not make a practice of knowing the details of other people’s investments, including those of his son and/or his nephew.

“The answer to your question, did he know about this, the answer is a resounding no.’’

This is the same mayor who harangues his staff about minor instances of graffiti he sees on his way to work. He’s a micromanager almost to the extreme.

Go read the whole thing. The mayor’s explanation just doesn’t hold up, especially considering who else was involved.

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Schock spanked by LaHood *** Updated x1 ***

Friday, Dec 14, 2007 - Posted by Rich Miller

* Retiring Congressman Ray LaHood won’t make an endorsement in the race to succeed him and is angry at state Rep. Aaron Schock for using his name in the campaign…

State Rep. Aaron Schock has been using his name without permission in campaign materials and showed immaturity by suggesting a foreign policy scenario that included the possible sale of nuclear missiles to Taiwan, U.S. Rep. Ray LaHood said Thursday. […]

LaHood said “there’s been at least seven references” to his name in Schock’s materials, and within the last week, he asked his district chief of staff, Tim Butler, who has also worked on LaHood’s campaigns, to call Schock’s campaign manager, Steven Shearer.

“He hasn’t called back,” LaHood said.

LaHood has approved the use of his name in ads by Jim McConoughey, however.

* The congressman also took a swing at Schock over that goofy idea to sell (nonexistent) nuclear missiles to Taiwan to force China to play ball on Iran…

“My advice on that is that he should have done his homework, and I think it’s an outrageous statement to be making,” LaHood said, “particularly when you have as your No. 1 employer in the Peoria area Caterpillar (Inc.), that has developed many, many relationships with the Chinese, including establishing facilities in China.

* But Schock wasn’t the only candidate that LaHood teed off on…

LaHood also said Thursday that Morris’ statements this week that millions of illegal immigrants should be deported once the nation’s borders are secure is a “silly solution” that is “not going to work.”

* More congressional stuff…

* Teachers union backs Footlik, not Seals, this year for Congress

* Hastert backs Oberweis, Burns drops out - Geneva mayor exits GOP primary race

* McConoughey calls for tax overhaul - Congressional hopeful seeks to extend tax deductions set to expire at the end of 2010

* Hanania: Challenge to Lipinski Still an Uphill Battle

*** UPDATE *** Billy Dennis gives us some context about the story on LaHood and Schock…

Months ago, a rumor was flying that LaHood was planning to endorse McConoughey. He supposedly decided against it because he didn’t to alienate Schock’s supporters against son Darin LaHood’s campaign for Peoria County State’s Attorney.

He also noted that the Peoria paper seemed to play down the story in its headline…

the [Peoria Journal Star] headline read “LaHood won’t weigh in,” while virtually the same column was headlined “LaHood raps Schock’s use of his name.” [in the State Journal-Register]

Frankly, I’m amazed that the Peoria paper even printed that story.

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Billionaire subsidy whacked, explained

Friday, Dec 14, 2007 - Posted by Rich Miller

* The legislative reaction begins

Leading state lawmakers were stunned to hear the state might be considering buying Wrigley Field to possibly ease the pending sale of the Chicago Cubs.

Both the top Republicans and Democrats in the Illinois House said they had never heard it discussed before media reports of talks between Gov. Rod Blagojevich and Tribune Co. officials emerged.

With a mass transit funding doomsday looming and millions worth of added education spending still in political limbo, some lawmakers said the baseball team and stadium simply aren’t a state priority.

“The current Democratic leadership even thinking of spending taxpayer money at this point in time to buy the stadium of a team that hasn’t won the World Series in 100 years could only be topped in ridiculousness if Britney Spears purchased Enron,” said David Dring, spokesman for House Republican leader Tom Cross of Oswego.

Spoken like a true Sox fan, Dringy. :)

* More

Downstate lawmakers unleashed a chorus of boos Thursday after hearing the state may be in the market to buy Wrigley Field from the Tribune Co.

“It’s just absurd,” said state Rep. Bill Mitchell, a Forsyth Republican.

“That would be a story that belongs in the Sunday comics,” added state Rep. Dale Righter, R-Mattoon. […]

“With all that Blagojevich has got going on, you’d think he’d be focusing on the mass transit problems facing Chicago, not buying a ballpark,” said state Sen. Bill Brady, R-Bloomington.

“No one is talking about solving the state’s real long-term debt problems,” said state Sen. Dave Luechtefeld, R-Okawville. “This is getting to be ridiculous.”

* And we have some more details of the billionaire subsidy plan

Whoever buys the Cubs would be required to sign an “ironclad commitment” to keep the team at Wrigley Field for the next 30 years, under a plan entertained by Gov. Blagojevich and condemned by Mayor Daley to have the state acquire and renovate the landmark stadium, officials said Thursday.

Having the Illinois Sports Facilities Authority, formed to build U.S. Cellular Field, officially acquire Wrigley for as little as $1 and finance a restoration in the $350 million-range — with work completed during several offseasons so the team wouldn’t have to move out — would be a dream come true for Blagojevich, a die-hard Cubs fan.

“We wouldn’t do this deal without a guarantee that the new owner would stay in Wrigley Field for 30 years,” said former Gov. Jim Thompson, chairman of the Illinois Sports Facilities Authority.

Like they’d leave anyway. This is all about subsidizing repairs and upgrades on that dilapidated, piece of junk park.

* More details about the scam

Thompson said Thursday that Tribune Co. representatives, including Zell and Kenney, met with Gov. Rod Blagojevich “a couple of months ago” to present the idea of a state purchase of the ballpark.

They said, “‘We’d like you to consider the idea of ISFA acquiring Wrigley Field because if you did that, you could ensure the Cubs stayed in Chicago under a new owner, whoever that might be, and you could ensure they would play at Wrigley Field. You could find ways to restore the ballpark, which would make the team under the new owner more competitive,’” Thompson recounted.

Yeah, the governor gets to play the hero for keeping a team that won’t leave anyway. Wonderful. Thankfully, there’s this…

A deal would require agreement by the mayor, the City Council, the governor, the four legislative leaders in Springfield and the General Assembly, Thompson said.

Considering everything else that has happened this year, I seriously doubt this will fly.

  51 Comments      


Job action called off

Friday, Dec 14, 2007 - Posted by Rich Miller

* Good news for commuters, and for legislators who would be totally on the spot next week

CTA bus drivers and train operators this morning called off a one-day protest walkout that could have crippled area transit Monday.

After meeting with a group of religious leaders who expressed concerns about the impact of the proposed job action on their communities, the unions representing CTA workers called off a job action that was scheduled to begin Sunday night and run through Monday. A press conference was scheduled for 10 a.m.

“We don’t want to hurt the minorities and the school children who depend on mass transit,” said Rick Harris, president of the rail workers union, Local 308 of the Amalgamated Transit Union.

* But they aren’t ruling out a future action…

Still, Harris said, “I’m not saying there won’t be any action in the future. But we’re trying to give legislators the ample time that they claim they need to get this done.”

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Morning shorts

Friday, Dec 14, 2007 - Posted by Rich Miller

* Illinois bends to feds on weeding out illegal workers

Homeland Security and the state have reached an agreement that will permit employers in Illinois to use the Internet-linked federal database to check to see if their workers are legally in the U.S. and allowed by law to work

* Some school districts face smaller state aid payments…

A handful of Illinois school districts soon will start receiving less money from their twice-a-month state funding payments, an Illinois State Board of Education spokesman said Thursday.

* Attorneys target clinic’s zoning - Aurora panel OKs releasing some files

* Todd Stroger still pushing Cook County sales-tax increase - Board to see plans for 10% budget cut

* Cook officials say court system near ‘meltdown’ - Report says more funding, reforms are needed bad

* Anticipated revenue slump prompts Indiana to cut costs - Daniels orders agencies to trim spending by 5 percent; state may take in $231M less than projected

* Juror scrutiny in Ryan trial fueled fears, Collins says…

The lead prosecutor of former Gov. George Ryan said Thursday that he believes the juror controversy during that trial had scarred the judicial system by spreading a sense of fear among future prospective jurors.

Speaking before the Chicago Crime Commission, Patrick Collins said the jurors’ heavy scrutiny during and after the Ryan trial had a far-reaching impact

* Ethanol plant files for bankruptcy

* Reenergizing an Ethanol Plant

* Illinois Department of Agriculture seizes $6 million worth of grain

* Cook County unveils unit to review cop shootings

* Illinois gov a fan of Hannah Montana

* A growing problem - Out-of-control transfers undermine the spirit of fairness, competition

* City creates ‘early warning’ system for foreclosure info - ‘Could be bigger than S&L scandal’: Daley

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Protected: SUBSCRIBERS ONLY - Today’s Capitol Fax (Use all caps in password)

Friday, Dec 14, 2007 - Posted by Rich Miller

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CHRIS KELLY INDICTED *** NEW CHARGES FOR REZKO *** HURTGEN RE-INDICTED *** BLAGOJEVICH RESPONDS *** KELLY FACES 38 YEARS IN PRISON ***

Thursday, Dec 13, 2007 - Posted by Rich Miller

From the US Attorney…

CHRISTOPHER KELLY INDICTED ON FEDERAL TAX FRAUD CHARGES;

ALLEGEDLY CONCEALED MORE THAN $1 MILLION IN INCOME AND

USE OF BUSINESS FUNDS TO PAY PERSONAL GAMBLING DEBTS


*** DOWNLOAD THE FULL KELLY INDICTMENT HERE ***

*** HURTGEN RE-INDICTMENT IS HERE ***

*** REZKO SUPERSEDING CHARGES ARE HERE ***

* More…

A suburban businessman was indicted today on federal tax fraud charges for allegedly understating his true personal and business income by more than $1.3 million over five years, in part by concealing the use of corporate funds for personal expenses including gambling debts to sports bookmakers. The defendant, Christopher G. Kelly, president and owner of a roofing business and a separate consulting firm, allegedly cheated the government on his personal and business taxes between 2000 and 2005, according to a 12-count indictment returned today by a federal grand jury, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

Kelly, 49, of Burr Ridge, was charged with one count of obstructing and impeding the IRS, five counts of filing false individual federal income tax returns, five counts of filing false corporate tax returns and one count of illegally structuring monetary transactions. He will be arraigned at a later date in U.S. District Court.

According to the indictment, Kelly was the president and owner of BCI Commercial Roofing, Inc., and CGK Consulting, Inc., both of which shared offices at 3062 West 167th St., Markham. Kelly maintained financial control over the two companies and determined how each company spent money and categorized its spending for purposes of calculating its business expenses as well as Kelly’s personal income.

As part of a corrupt endeavor to obstruct and impede the IRS, Kelly allegedly used business funds to pay for certain personal expenses, concealed the true nature of the payments through improper recording of the payments on the companies’ financial books and created false documents describing the payments; structured cash withdrawals under $10,000 from banks by disguising them as legitimate business expenses; and used third parties to pay portions of his illegal gambling debts.

More specifically, Kelly allegedly:

o caused BCI Roofing to pay gambling debts for certain of his losing wagers placed with Individual A, who, with the assistance of Individual B, ran a bookmaking operation in Illinois that accepted wagers on such sporting events as professional and college football, professional and college basketball, baseball and horse racing, and with whom Kelly placed millions of dollars of wagers. On at least one occasion, Kelly allegedly hid the use of corporate funds to pay a gambling debt to Individual A by ordering that the payment be falsely recorded in BCI Roofing’s financial books as a loan from the company to Individual A;

o placed millions of dollars of wagers with casinos in Las Vegas and caused BCI Roofing to pay for certain of his losing wagers there. On at least one occasion, Kelly allegedly hid the use of corporate funds to pay a gambling debt to a casino by ordering the preparation of false internal BCI Roofing documentation to make it appear that the payment was a legitimate business expense incurred by the company as part of a roofing contract for an airline;

o caused BCI Roofing to partially pay for his home in Burr Ridge and caused BCI Roofing and CGK Consulting to pay for various home items and services, including electronic equipment, hardwood floors, drapery, and lawn maintenance; and

o hid the use of corporate funds on multiple occasions to pay for various items and services for his home by ordering the preparation of false internal BCI Roofing documentation to make it appear that his payments for home items and services were legitimate business expenses incurred by the company as part of various roofing contracts for such clients as airlines and an electric company.

Both the IRS obstruction count and five counts of filing false individual federal tax returns for calendar years 2001 through 2005 allege that Kelly reported an aggregate of more than $5.2 million in total income for those five years but understated his true income by more than a $1 million for the same period.

As a result of concealing his income and directing the fraudulent classification of certain personal expenses as business expenses, the IRS obstruction count also alleges that Kelly caused false corporate income tax returns to be filed on behalf of BCI Roofing and CGK Consulting from 2000 to 2005, understating the companies’ true income by more than $300,000. The five counts of filing false corporate tax returns on behalf of BCI Roofing for each fiscal year from 2000-01 through 2004-05 allege Kelly overstated the company’s cost of goods sold and understated both its taxable income and total tax by falsely deducting certain personal expenses as business expenses.

The IRS obstruction and structuring counts allege in September 2004, Kelly solicited Individual C’s help in cashing three checks, each slightly under $10,000, and returning the cash to Kelly. In one instance, Kelly allegedly gave Individual C a BCI Roofing check for $9,500 payable to Individual C’s four-year-old child, and the following day, Kelly allegedly gave Individual C BCI Roofing and CGK Consulting checks payable to Individual C and Individual C’s spouse and obtained the cash back from Individual C for all three checks.

About the same time, Kelly also allegedly concealed his receipt of additional cash by depositing and cashing six BCI Roofing checks payable to himself, his children, his wife and cash. In each of these transactions, Kelly allegedly structured the cash receipts in amounts less than $10,000 to avoid generating Currency Transaction Reports.

The indictment seeks forfeiture of $86,600, which is the total amount of the allegedly structured funds.

The IRS obstruction count also alleges that in early 2005 Kelly attempted to conceal the source and nature of a partial payment on a large gambling debt he owed to Individual A. To assist Kelly in paying the debt, Individual D arranged for a wire transfer of approximately $79,140 from a bank account in Saudi Arabia to a bank account in Florida, according to the indictment. After learning that the wire transfer was not credited to the Florida bank account, Kelly allegedly arranged for the wire transfer of approximately $45,000 from a pizza company in Chicago to Individual A’s bank account. On at least one other occasion, Kelly allegedly attempted to pay a portion of the gambling debt to Individual A by tendering multiple checks, each made out for thousands of dollars and with the payee line left blank, from a second pizza company.

* Hurtgen…

A former executive in the Chicago office of Bear Stearns & Co., an investment firm that arranges financing for public works projects in Illinois, was indicted today on federal charges for allegedly assisting a fraud scheme in which a former member of the Illinois Health Facilities Planning Board and a construction firm owner engaged in insider-dealing, influence-peddling and extortion involving their private interests and public duties, federal officials announced today. The defendant, P. Nicholas Hurtgen, a lawyer and investment banker, allegedly participated in a fraud scheme to help lawyer, businessman and previous co-defendant Stuart Levine, formerly an influential member of the state board that controls medical facility construction projects, obtain millions of dollars for Levine and certain of his associates, including another previous co-defendant, Jacob Kiferbaum, an architect and construction firm owner, who schemed with Levine to obtain multi-million dollar contracts and to distribute construction kickbacks, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois.

* From Hurtgen’s reindictment

HURTGEN told the CEO that Levine and Kiferbaum were friends and that Levine had a close relationship with a high-ranking Illinois elected official, Public Official A, who also liked Kiferbaum. HURTGEN told the CEO that she did not want to know why Levine and Public Official A wanted Kiferbaum to get the Edward Hospital construction projects, but advised her that the support for Kiferbaum by Public Official A and those surrounding Public Official A was “all about money” for political campaigns. HURTGEN also told the CEO that he had recommended to Levine that Kiferbaum “latch on to” the CEO’s team because Edward Hospital was a growth hospital.

* More on Hurtgen from the Tribune

Hurtgen was reindicted on charges he took part in a fraud scheme to force kickbacks from hospital expansion projects. He was originally charged with political insider Stuart Levine, real estate consultant John Glennon and construction firm owner Jacob Kiferbaum. But a judge in March dropped Hurtgen from that case, finding that the original indictment did not specifically outline that Hurtgen knew that kickbacks were involved.

*** Statement from Gov. Rod Blagojevich ***

“Chris Kelly is my friend. I am saddened to hear these allegations about Chris’s personal life. I know the pain it must be causing him and his family. My thoughts and my prayers are with them during this difficult time. In fairness to Chris, I believe it is important to let the legal process play out and not rush to judgment.”

*** Kelly is looking at 38 years behind bars ***

Kelly, 49, of Burr Ridge, was charged with one count of obstructing and impeding the IRS, five counts of filing false individual federal income tax returns, five counts of filing false corporate tax returns and one count of illegally structuring monetary transactions. He will be arraigned at a later date in U.S. District Court. […]

If convicted, each count in the indictment carries the following maximum penalties: obstructing and impeding the IRS and filing a false tax return – three years in prison and a $250,000 fine, and illegal structuring of monetary transactions – five years in prison and a $250,000 fine.

*** 5:02 pm *** A good point from the Sun-Times

The governor’s campaign has received $212,000 in contributions from Kelly’s roofing and consulting companies, and it remains unclear if the governor will return the money.

  134 Comments      


This just in… Unions to walk off *** Kevin Burns drops out ***

Thursday, Dec 13, 2007 - Posted by Rich Miller

*** 12:01 pm *** The Tribune reports on some unsettling news

Mass transit in the Chicago area would screech to a halt from Sunday night through Monday if all goes according to plan in a one-day “job action” that CTA labor unions have approved, union officials said today.

The threatened walk-off, which union leaders insist is not a strike, aims to send the strongest message yet the governor and lawmakers in Springfield that the deadlock over transit funding must end now, according to the Amalgamated Transit Union, which represents CTA bus drivers, train operators and other employees.

If successful, the shutdown of all CTA bus and rail service for 24 hours would paralyze downtown Chicago and overwhelm transportation across the region. The CTA serves 40 suburbs.

The union’s ultimate goal is to shut down all CTA, Metra and Pace operations to demonstrate the need for more transit funding and to restore balance to union pension funds and health care plans. But such a wide-spread walkout would require the cooperation of 19 unions at the three transit properties in the Regional Transportation Authority system.

* Don’t forget to purchase tickets here for the December 16th performance of “No-El, Or How the Blagojegrinch Stole Christmas” - Our Capitol Fax holiday party. I do have some extra tickets if you need them.

* 12:29 pm - Rod Blagojevich… Hero?

…and I dare say that my life was saved by our own Governor Rod Blagojevich when he stopped me from accidentally taking a backward step off the roof of the Marion Civic Center.

[H/T: 11th Hour]

* 1:01 pm - Congrats to Rep. Eddie Sullivan on the birth of his new daughter, Kaleigh. I’m told that mom and daughter are both doing well.

* 1:13 pm - From a Chris Lauzen press release entitled: “Lauzen Celebrates Hastert Endorsement of Oberweis”…

The Hastert endorsement may be good for Oberweis (who has lost all 3 campaigns he’s ever run, including the 2002 U.S. Senate Race, also with Hastert’s endorsement), but it’s bad for the people and bad for unity in the Republican Party. Hastert has resigned; Oberweis is running against me; let the people decide.

*** 1:32 pm *** And then there were two. Republican congressional candidate Kevin Burns has dropped out of the race

Soon after former House speaker Dennis Hastert endorsed one of his opponents this morning, candidate Kevin Burns announced he is dropping out of the 14th Congressional District race.

Burns, Geneva’s mayor, said Hastert’s support of Jim Oberweis was the main factor in his decision to “suspend” his campaign.

“It is my best interest and the party’s best interest to suspend my campaign,” Burns said. “It’s extremely difficult, but in the final analysis, it’s what’s best for me.”

  28 Comments      


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Thursday, Dec 13, 2007 - Posted by Rich Miller

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Hmmm…

Thursday, Dec 13, 2007 - Posted by Rich Miller

There are plenty of rumors about what this press conference will entail, but we’ll just have to wait and see…

Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, together with officials of several federal law enforcement agencies, will hold a press conference at 2 p.m. today, Thursday December 13, 2007, to announce a new criminal matter.

The press conference will be held in the U.S. Attorney’s Press Conference Room on the 11th floor, north end, of the Dirksen Federal Courthouse, 219 South Dearborn St., Chicago. Media access to the press conference room will begin at 1 p.m. Additional details will become available sometime within the hour preceding the press conference. There are no court appearances scheduled today in connection with this matter.

I’ll update this when information becomes available. And I’ll open comments if it’s appropriate. This is just a heads up for now.

  Comments Off      


Question of the day - The Golden Horseshoes, Round 3

Thursday, Dec 13, 2007 - Posted by Rich Miller

Yep, we finally have a name for these awards. I called around yesterday to see if we can have trophies made up in the shape of a horseshoe - the actual shoe, not the dish.

I’m gonna declare a tie in the legislator who best epitomizes public service award. Ray LaHood wins the “statesman” award. CUB gets the association award.

Three new questions today. Please explain all your responses

1) Best political bar/restaurant in Springfield (must be currently operational)

2) Best statewide officeholder

3) Best state legislative staffer

Again, please explain your votes and try your very best to answer all three questions. Thanks.

…Adding… The contest is not just based on the number of votes, but on the intensity of each vote. So, if you don’t explain your vote, it will have far less weight or not be counted at all, depending on my mood.

  110 Comments      


Reform and renewal, Parts 9,682, 9,683, 9,684, 9,685 and 9,686

Thursday, Dec 13, 2007 - Posted by Rich Miller

* As you know already, former Gov. Jim Thompson wrote a letter to the Tribune the other day attacking the paper for writing about Patti Blagojevich’s real estate business. Mrs. Blagojevich has, in the past, had clients who also were closely connected to state politics and government.

But Big Jim and his wife had a different standard when he was governor. Dan Curry dug up this 1987 Thompson quote…

[Jayne Thompson] no longer practices law because “I`m somewhat of a liability to some law firms. It precludes them from getting the kinds of state business they think they are entitled to and probably are.“

Sensitive to conflict-of-interest charges, she tries to avoid any hint of impropriety as wife of the highest official in the state.

* Meanwhile, the self-promotion at taxpayer expense continues…

llinois taxpayers could be on the hook for as much as $335,000 in the coming year to make sure Illinois politicians are photographed and videotaped at various state events.

According to state documents, the state has renewed the contracts of five video production companies in the northern part of the state to do the special public relations work.

The figure could rise even higher when the ink dries on contracts for private companies in other parts of the state.

Gov. Rod Blagojevich came under fire for the contracts last year when his gubernatorial opponent, Republican Judy Baar Topinka, called them an example of the governor using taxpayer money to promote his political agenda.

* The governor courts the Gucci loafer crowd

[A] quintet of clout-heavy players hoped to cash in on that generosity Wednesday with a small fund-raising gathering for Gov. Blagojevich at the Chicago Yacht Club.

“I am honored to be hosting this event along with my friends David Gustman, Michael Henneman, Michael Rumman and Roger Bickel,” attorney Brian Hynes wrote in the invitation.

The hosts: Hynes, a Springfield lobbyist; Gustman, an attorney and next-door neighbor of Tony Rezko, the governor’s indicted former adviser; Rumman, a Rezko business associate and former member of the governor’s Cabinet; Bickel, an attorney and former staff member of imprisoned ex-Gov. George Ryan’s, and Henneman, who owns a Downstate engineering company that has gotten a slew of government contracts.

* More fun stuff

Illinois law prohibits tax deadbeats from getting state business, but that hasn’t kept an associate of indicted gubernatorial adviser Tony Rezko from operating restaurants on state property.

Al Chaib owes the state $359,639 in unpaid business taxes dating back five years, yet his firm, Morpheus LLC, owns Subway sandwich shops at all seven Illinois Tollway oases, the Chicago Sun-Times reported in Thursday’s editions.

“We have asked the tollway and lawyers from the attorney general’s office to look into the ownership issue and make sure there is no conflict with state procurement rules,'’ said Abby Ottenhoff, spokeswoman for Gov. Rod Blagojevich.

* And the feds take over yet another case

Federal prosecutors have taken over a state investigation into allegations of influence peddling involving a fundraiser for Gov. Rod Blagojevich.

In 2005, Illinois State Police closed a case against Harish M. Bhatt, a Joliet pharmacist and major fundraiser for the governor, who had been accused of offering to help derail a fraud investigation into a Chicago pharmacist in exchange for a $25,000 campaign contribution to Blagojevich. Jatin Patel, who stopped payment on a $25,000 check he had given to the governor’s campaign shortly after writing it, has denied any wrongdoing.

The state has ordered Patel to repay $1.5 million in alleged Medicaid overbillings. Bhatt, who was also subject of a fraud investigation, has not had sanctions imposed by the state and says he did nothing wrong. Patel has told the Chicago Tribune that Bhatt had offered to help in Patel’s fraud probe in exchange for a campaign contribution, an assertion Bhatt denies. […]

Now, the U.S. attorney’s office in Chicago is subpoenaing state police files and taking over the investigation, The State Journal-Register has learned.

  10 Comments      


Are you freaking kidding me? *** Updated x2 ***

Thursday, Dec 13, 2007 - Posted by Rich Miller

* As you might imagine, this offends me to no end

A possible deal right out of left field could leave taxpayers on the hook for the renovation of Wrigley Field.

It’s not a done deal, but CBS 2 has learned discussions have been on for weeks for the state to purchase Wrigley Field. As Chief Correspondent Jay Levine reports, the stadium is a Chicago landmark and sits on a valuable piece of property in a hot neighborhood.

But the Cubs might be worth more to a new owner without Wrigley Field, than with it. And that’s why the state is talking with the Cubs about buying the stadium and running it just like they do U.S. Cellular Field.

Sources confirm Wednesday night that the Gov. Rod Blagojevich’s people have been talking with the Cubs’ owners about buying the stadium before the Tribune Co. sells the team.

So, the state is bidding on Wrigley to help Sam Zell get a better price for the Cubs? That is so offensive to me.

* More from the Tribune

The bidding for the Cubs has been red hot, giving Tribune several choices on how best to sell the team and the assets connected to it, including the ballpark. […]

Selling the ballpark separately to an entity like ISFA actually could help Tribune secure a better price overall, sources said. If a new owner were to pay top dollar for both the team and ballpark, the price tag for major renovations likely would suppress the overall bidding price, those sources say.

Why should the state help a kazillionaire maximize his profits from an asset sale? This is crony capitalism at its worst.

The Cubbies are worth a fortune because of Wrigley, not in spite of it. Those tourists don’t flock to Wrigely to see the Cubs play. They come for the “atmosphere.” No new owner in his or her right mind would move out of that stadium, no matter how dilapidated and run-down it is.

The governor is the state’s number one Cub fan, and it really shows in this goofy move. Instead of working on solving the CTA funding crisis, and carving out a deal on a much-needed capital plan, he’s showboating on this stupid idea.

*** UPDATE 1 *** This report from NBC5 is so not true

The plan, in part, intends to prevent the Cubs from leaving the city for a new stadium in the suburbs.

That’s a completely bogus cover story, to say the least. No potential owner could possibly be stupid enough to move the Cubs from its “holy” site out to the suburbs. And if he/she did, that person deserves to fail.

*** UPDATE 2 *** Mayor Daley turns big thumbs down on goofy idea

“We can’t even get any money for the CTA and they’re worried about the Chicago Cubs? They’ve made money every year. It’s very profitable and some way, we’re supposed to bail them out? I’ve never heard [of that] . . . I don’t think they’re leaving. They just increased the price of tickets,” Daley said.

“We have a crisis at the CTA right now. It’s hard to believe . . . that people are now talking about taxpayers helping out the Cubs. The Cubs are not gonna move. It’s a gold mine. . . . If you’re gonna start holding this issue over the heads of passengers of the CTA and this crisis we’re in and they want to start talking about whether or not taxpayers are gonna buy [Wrigley Field] — that’s hard to believe.” […]

…Daley said he raised “serious questions” during that meeting. In fact, he told Zell point-blank, “You’re basically asking the taxpayers to . . . some way help the Cubs. Simple as that.”

The mayor said he’s so opposed to the taxpayer-financed acquisition of a private sports stadium, he would oppose any effort to raise the restaurant tax or hotel tax to retire Wrigley stadium bonds.

“You’re not gonna increase the hotel tax in the city of Chicago for that purpose. You will not increase the restaurant tax. . . . It would be unfair for everyone,” Daley said.

Can you say “Dead”?

  64 Comments      


Morning shorts

Thursday, Dec 13, 2007 - Posted by Paul Richardson

* Morgan Stanley issues full U.S. recession alert

* Countrywide Financial under IL probe, NY Times reports; more here

* Sun-Times media shareholder demands cost cuts

* Ditka defends charity but dissolves it

* Sun-Times Editorial: Ditka should have kept better on eye on charity

Ditka should have raised questions at the large disparity between the money his fund spent on three celebrity golf tournaments, costing $715,000, according to USA Today, and the charity his fund gave to ex-players.

“Not enough, probably, was given out,” admits Ditka, stating that $159,000 was the actual amount of the payouts, including a sizable sum to Misericordia, the local facility for children with developmental disabilities. One reason his fund didn’t give more money to ex-players, said a person involved in the trust who requested anonymity, was the unexpected difficulty of getting proud or mentally ill ex-players to apply for aid.

* Davlin says Springfield property tax may go up

Davlin blames the legislature, which has boosted — while not providing the money — firefighter pension and death benefits four times since 1999.

The council has no control over the pension benefits given to cops and firefighters, but local governments must provide the annual payment from property tax revenue. Actuaries determine the city’s pension payments, estimating what rate of return the systems will get on their investments.

* CHA proposing adult residents work 20 hours or face eviction

* Clout City: Right to work

City and negotiators for 33 trade unions representing 7,800 city employees recently hashed out a deal on pay and benefits for the next 10 years. Some critics have charged that the Daley administration gave away too much–pay will increase by 16 percent over the next five years alone–in the interest of ensuring labor peace during the possible buildup to the 2016 Olympics. Others, including many of the council’s black aldermen, have long howled that the trades shouldn’t get sweet city deals when they can’t be bothered to improve recruitment outside old white ethnic circles. Former alderman and current Cook County commissioner William Beavers summed up this view during last year’s Big Box minimum-wage debate: Unions, he said, “don’t do nothing for us in the construction industry.”

* Cook officials told to brace for cuts

* Stroger’s sales tax increase plan dies

* Tribune Editorial: The power of taxpayers

* Durbin seeks probe of air controller fatigue and runway safety at O’Hare; more here

* FutureGen developers plan site announcement on Tuesday, despite DOE ’slow down’ advice; more here

“What’s going on at DOE behind the curtain, I’m not sure,” Sheehan said.

“We do intend to move forward on December 18th as planned,” she said, adding the developers believe the DOE has plenty of time to finalize its record of decision. “We do feel collectively that we owe this (announcement) to the states of Texas and Illinois.”

The site announcement, initially due in September, has been delayed several times.
FutureGen’s developers say the coal-fired plant would emit almost no carbon dioxide, trapping the greenhouse gas and storing it underground. The plant is intended to be a prototype, experimenting with the technology so it can be used in future power plants.

* Two states, one big coal windfall

* IL school chiefs’ pay on sharp curve up

School superintendents’ average pay in Illinois climbed 23 percent in the last five years, a jump experts said reflects an increasingly competitive market and a number of retirees with big end-of-career raises.

* JCAR to vote later on smoking ban

“The law supercedes the rules,” Kimberly Parker, a state Department of Public Health spokeswoman, said Wednesday. “The law goes into effect as announced.”

* Russ Stewart: Madigan’s Misery, to quit or fight in 2010?

A new scenario is germinating: Lisa Madigan could run for the Illinois Supreme Court in 2010, when the terms of 1st District (Cook County) Justices Charles Freeman and Thomas Fitzgerald expire; if one or both retire, she would easily win a Democratic primary. And, if a Democrat occupies the White House, Lisa Madigan would be on a short list of potential U.S. Supreme Court appointees. In Illinois, Mike Madigan would back state Treasurer Alexi Giannoulias in the primary against Blagojevich, and state Comptroller Dan Hynes would run for Lisa’s spot as attorney general.

* Oberweis to get Hastert endorsement; more here and here

* McQueary: Congressional candidate takes campaign to high school

* 18th CD candidates on tightening of immigration

* WurfWhile: SEIU endorsement gives Foster support, hurts Laesch

  38 Comments      


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