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This just in… Senate passes pension bond bill

Thursday, May 29, 2008 - Posted by Rich Miller

* 1:02 pm - Speaker Madigan says the governor may be delusional…

A reporter asked about talk that lawmakers don’t trust him.

BLAGOJEVICH: You know, I think you hear a lot of rhetoric on both sides from people in the political process. That’s just rhetoric. It’s not at all unusual here in Illinois. You hear people in Washington say that about each other.

But House Speaker Michael Madigan, an opponent of Blagojevich’s, says the governor’s leadership style is a problem.

MADIGAN: Well if he thinks it’s rhetoric, then he ought to talk to the members of the legislature who day in and day out tell him to his face that they don’t trust him. So maybe he is delusional.

Audio from Chicago Public Radio…

[audio:cityroom_2008.mp3]

[Or click here if the player doesn’t work for you]

* 3:37 pm - John Patterson scored a quick interview with Gov. Blagojevich by staking out the guv’s favorite Statehouse entranceway - the Capitol basement loading dock…

Q: If the General Assembly sends you a budget that’s unbalanced, doesn’t have the revenues to match spending, what are the first things you’re going to look to cut?

Governor: Look, I can’t believe the General assembly would send me a budget that’s not balanced. The General Assembly knows that the constitution requires a balanced budget. I find it hard to believe that they would send me a budget that’s not balanced. So I think it’s kind of a moot question.

I have confidence they’ll do the right thing and send me a budget that’s balanced. I understand last year … I choose to believe that was an aberration when they sent me a budget that was more than a billion dollars in deficit. I have to think, acknowledging that, that they would never do that again. So I’m confident they’ll send me a balanced budget.

Believe it, guv. Last year was no aberration.

* 3:50 pm - I told subscribers that this approp bill would pass today and about some of the other stuff in this brief report…

State lawmakers have started sending pieces of a new state budget to Governor Rod Blagojevich while they’re working on an agreement on the entire spending plan.

The House voted 61-53 Thursday to send the governor a measure already approved by the Senate that would pay for operations in smaller state agencies next year.

Democrats in both chambers say their approval should signal that budget talks are on track to be wrapped up by Saturday. If not, the session goes into overtime.

But lawmakers say some key points still need to be resolved. They include how to pay for as much as $2 billion in extra spending and how much spending to include for human services and education.

*** 4:09 pm *** The Senate just finished voting on the $16 billion pension obligation bond plan. The bill passed with 37 votes. They held their caucus completely together despite several open threats of desertion. Whatever you think of the bill, it looks like the SDems are finally all on one page for the first time in well over a year.

The bill now goes to the House.

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Caption contest!

Thursday, May 29, 2008 - Posted by Rich Miller

(Winner gets a free classified, calendar, or resume ad for one week at InsiderzExchange)

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Thursday, May 29, 2008 - Posted by Rich Miller

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Question of the day

Thursday, May 29, 2008 - Posted by Rich Miller

* Sun-Times…

Justice will not have been served if [George Ryan] is released from prison early. […]

Despite his conviction, and an appellate court decision affirming it, Ryan, as far as we know, has never admitted to breaking any laws. And in his persistent efforts on Ryan’s behalf, Thompson reveals his own reluctance to acknowledge Ryan’s guilt.

* Daily Herald…

Ryan has never recognized his conviction. […]

On the night before he went to prison, he struck a defiant pose, proclaiming his innocence and saying he would begin his sentence “with a clear conscience.” […]

To grant him special favors after all that would not only be unfair. It would invite the public’s continued cynicism about our institutions of government.

* Bernie has some background on the Ryan-Bush relationship.

* Question: Should President Bush commute George Ryan’s sentence and set him free? Explain. [Note that we’re not talking about a full pardon here, just a commutation.]

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Reform and Renewal, Part 9,688

Thursday, May 29, 2008 - Posted by Rich Miller

* Keep in mind when reading these first couple of excerpts that these are the same people who want us to trust them with a $16 billion pension obligation bond, a $31 billion capital spending plan, a Lottery lease, etc…

An audit of Gov. Rod Blagojevich’s Office of Management and Budget found that the state’s top fiscal office did not competitively bid some services and failed to maintain even the most basic records of major financial activities.

* And…

Gov. Rod Blagojevich’s Office of Management and Budget improperly awarded state contracts and had difficulty monitoring others, a state audit said Wednesday.

The review by Auditor General William Holland found that the budget office did not issue contracts based on required competitive bidding procedures. It also wrongly paid employees for travel expenses and failed to document workers’ pay raises.

“As the management agency of state government, they’re setting a poor example,” Holland said.

* From the auditor general’s summary…

The Office did not exercise adequate controls over contractual agreements.

The Office did not exercise adequate control over its interagency agreements and related travel expenditures.

The Office did not exercise adequate control over its travel functions. […]

The Office did not fully comply with annual financial reporting requirements set forth by continuing disclosure undertakings.

The Office did not comply with provisions of the Accountability for the Investment of Public Funds Act…

* Aaron Chambers discusses another audit of CMS and Health and Family Services…

…CMS and HFS — the agency responsible for managing the state’s health care programs — forged an agreement under which CMS raided nearly $20 million set aside for state worker health insurance to pay costs associated with worker’s comp. This is the “health care governor,” after all.

CMS also had trouble keeping its fiscal years straight, Holland’s audit found.

Go read Chambers’ post for the full effect. Horrid.

* Meanwhile…

The largest state government employee union is upset with the Blagojevich administration’s contract offer that the union says will result in a pay cut for its members.

The offer doesn’t meet the American Federation of State, County and Municipal Employees’ idea of a contract that gives state employees “decent wages, health care they can afford and secure retirement,” AFSCME spokesman Anders Lindall said.

“The administration is seeking to shift significant new health-care increases on state employees and new pension costs and pay (increases) that wouldn’t keep pace,” Lindall said Wednesday. “The end result would be a pay cut for state employees who in recent years have seen their ranks reduced sharply and their workloads increased at the same time.”

Labor unrest is just what this administration needs.

Not.

* Related…

* Lawmaker laments ’session of nothing’

* A lot has to happen in three days

* Lawmakers racing the clock on budget

* Lawmakers hustle to craft spending plan

* House Democrats: little chance of passing capital plan

* Governor optimistic on big plan

* Editorial: Prospects for Illinois Works are dim

* Pension reform bill advances to full House

* Comptroller says Illinois needs to find other higher education funding

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Should Lisa Madigan announce now? *** UPDATED x1 ***

Thursday, May 29, 2008 - Posted by Rich Miller

* Eric Zorn urges Attorney General Lisa Madigan to announce right away that she’s running for governor…

Don’t wait. Announce today that you’ll challenge incumbent Rod Blagojevich for the Democratic gubernatorial nomination in 2010.

* Zorn notes that Blagojevich has a big fundraiser planned for next month, so an announcement now would dry up the governor’s money…

And his re-election strategy, assuming he runs again, will likely be similar to his 2006 re-election strategy: Build up huge campaign reserves and use his financial advantage to discourage opposition and bury those who do run against him in an avalanche of commercials.

* He also lists several possible Democratic contenders who are currently mulling gubernatorial bids, including Paul Vallas, Alexi Giannoulias and Dan Hynes. A “multi-candidate primary” would be Blagojevich’s best bet for reelection, Zorn says, but if Lisa jumped in now…

Only a fool would decide to challenge you, and the prospective candidates above aren’t fools. But neither are they quitters. If you wait for one or more of them to get in first, you may find yourself sharing the protest vote in the primary.

* I see several flaws in this argument…

1) Blagojevich’s fundraising abilities have already been hobbled by the ongoing federal probes. The ethics bill, if it becomes law, would further damage his fundraising capabilities by not allowing him to raise money from state contractors. Also, half the money he raised last year went to legal fees. If Rezko is convicted in a way that points directly at Blagojevich, those legal fees will exponentially rise. Heck, they’ll increase anyway because there are plenty of other investigations afoot.

2) Dan Hynes is a Mike Madigan ally, so he’ll likely keep his powder dry while Lisa mulls. Vallas probably won’t be able to raise money in the Greek community as long as Alexi is keeping his options open. The same thing goes for potential LMadigan backers. Vallas’ 2002 campaign was so poorly run that he may not even be seen as a credible challenger. Plus, if Barack Obama is elected president, Giannoulias might be appointed to the US Senate.

3) Giannoulias appears to relish the chance of challenging Lisa Madigan in the 2010 gubernatorial primary, if it comes to that. Obama beat the Madigan machine in 2004 (Obama’s primary victory over Hynes) and he and Obama did it again in 2006 (Giannoulias’ primary victory over Paul Mangieri), so they’re not exactly quaking in their boots. The Alexi folks are painting the possible matchup between their guy and Madigan as a rerun of Obama vs. Clinton.

4) As far as the multi-candidate primary goes, Blagojevich might be indicted or even on trial by 2010. Also, Blagojevich’s only remaining hardcore base is among African-American voters in Chicago and Cook County. An Obama endorsement of Giannoulias (whether he wins the presidency or not) would wipe out the guv’s base.

5) AG Madigan told me a couple of weeks ago that she’s likely to announce her decision after the November election.

6) If she announces now and the ethics bill becomes law, she won’t be able to raise money from any company that does business with the administration, or has bid on contracts. She might disavow the cash anyway, but a formal declaration would legally close off that money. [Correction: A commenter is right to point out that she’ll have to formally file with the state as a candidate before that money is cut off, but raising money from those contractors after she has announced would surely be frowned upon.]

7) I’m not singling out Eric here, but a universal rule is to never take political advice from a journalist or pundit. They’re usually wrong. And I include myself in that category.

That being said, Eric doesn’t have a horrible idea. It could work. But the Madigan family is the epitome of political caution. They like to have their ducks completely in line before they make a move. It might make sense on several levels, but I don’t see it happening yet. We’ll see how the rest of the media responds.

Anything I’ve missed? Or, is Eric spot on?

…Adding… If AG Madigan announced today, she’d be drawn directly into the ongoing fight her dad is waging with Gov. Blagojevich. MJM says guv is “delusional,” Lisa is asked for comment. Etc., etc., etc. All bad.

*** UPDATE *** From Zorn…

I’ll be a panelist this evening on “Chicago Tonight” (7 p.m., WTTW-Ch. 11) in a discussion about the 2010 race for governor in Illinois.

That was quick.

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Strange transaction; Plus a couple of Rezko updates

Thursday, May 29, 2008 - Posted by Rich Miller

* What the heck is up with this?

Jeffrey Duerwachter isn’t a player in Chicago real estate. He doesn’t even own a home. Duerwachter, 39, lives with his parents in Wilmette. He did OK last year at work, making $1,756 a week working on the set of the new Batman movie filmed in Chicago.

But he did even better investing, making a $413,000 profit by buying and immediately reselling a historic South Loop building that once housed the Chicago Defender, the city’s biggest African-American newspaper. And he did it all in one day — June 8.

Duerwachter reportedly paid $3.72 million for the building and a vacant lot, and flpped it the same day to a company owned by Matthew O’Malley.

Remember him? O’Malley’s the guy who runs the Park Grill Restaurant in Mayor Daley’s prized Millenium Park. As the Sun-Times notes, this deal became controversial “after the Chicago Sun-Times disclosed in 2005 that O’Malley and his partners won the 20-year deal with the Chicago Park District to run the restaurant while he and a top park district official, Laura Foxgrover, were romantically involved and having a child.”

* Anyway, back to the real estate flip…

O’Malley bought the property with three loans — including $1 million in city pension funds managed by DV Urban Realty Partners, a company co-owned by Mayor Daley’s nephew, Robert Vanecko, and one of Daley’s key African-American allies, Allison S. Davis. This was one of the investments Davis and Vanecko made after their newly created company was hired to manage $68 million for five pension funds for city workers, police officers, Chicago teachers and CTA workers.

Gee, I wonder if something’s hinky there.

* Meanwhile, Tony Rezko has more legal trouble…

Antoin “Tony” Rezko, who is standing trial on federal corruption charges in Chicago, is wanted in Las Vegas for failing to pay $472,275 in gambling debts to Caesars Palace and Bally’s and related processing fees to the Clark County district attorney’s office. […]

At Caesars, between March 25 and July 14, 2006 Rezko cashed a $195,000 personal check that came back for insufficient funds and was given $55,000 in markers on four other occasions, according to the complaint. He also was given four markers totaling $200,000 on July 13, 2006, at Bally’s, the complaint said.

* Duffy responds…

[Rezko defense attorney Joe Duffy] said Rezko had “old debt” in Nevada with two casinos that is covered by a settlement agreement. “Why they decided to issue a warrant, I do not know,” Duffy told the Tribune late Wednesday.

* And the Rezko jury is taking its own sweet time…

All told, it has taken the jury of 10 women and 2 men more than two weeks to deliberate for a combined 6 1/2 days. With this week book-ended by a holiday and a day off on Friday, jurors could confer for as little as 2 1/2 days.

Rezko is facing 24 counts, so the jury has so far deliberated an average of 2.2 hours on each count.

* Somewhat related…

* NU grads say Daley too small for big day

* Expediters’ role under federal scrutiny at latest City Hall probe

* Children’s Museum lists rejected sites: Reilly noted that Children’s Museum vice president Jim Law, Daley’s former special events director, has spent the last year insisting that Grant Park was the “only location considered.'’ “Now we’re supposed to believe he wasn’t telling the truth. The museum team is running dangerously low on credibility,'’ Reilly said.

* Children’s Museum lists 37 alternate sites

* Stroger gets backing for final 4 for hospital oversight board

* Sangamon County State’s attorney candidate wants to create anti-corruption unit

* Senator’s Pension More Than Former Salary

* Jurors send mixed signal on Rezko deliberations

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Morning Shorts

Thursday, May 29, 2008 - Posted by Kevin Fanning

* Editorial: Lead and crime

* John F. Harris: The signature defect of modern political journalism is that it has shredded the ideal of proportionality.

* Lawmakers attempted to clarify their intentions Wednesday by altering Scott’s Law to add that it should apply only to those drivers who cause property damage or death or injury to another person… motorists have complained that the harsh fines have been handed down against anyone passing even the most trivial of traffic stops.

* Gov. Rod Blagojevich has been sent legislation that would require a stiff prison sentence for a person convicted of giving a gun to a minor who then goes out and commits a crime.

* CTA operator error suspected in derailment

* DuPage County Board freezes most members’ salaries

* Harness racing expansion proposal dies in committee

* Follow the GOP Leaders (Out the Door)

And to make matters worse, Hastert backed a deeply flawed candidate, Jim Oberweis, to replace him. Oberweis lost the special election in March.

* The Price Of Pampering At The Conventions? $500K

* City urged to roll out bicycle rental plan

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Thursday, May 29, 2008 - Posted by Rich Miller

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