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Gaming the white flight program while blacks leave in droves

Tuesday, Oct 18, 2011 - Posted by Rich Miller

* This story just gets weirder and weirder. Yesterday, the Sun-Times told us about how a late 1980s law designed to avoid white flight from Chicago is actually occasionally rewarding white flight with big payouts to sellers. Today, they look at the guy who’s running the obscure agency

While overseeing the largest of three government-run home-equity assurance programs in Chicago, Kenneth Pannaralla got two interest-free home-improvement loans through his agency worth a total of $15,000, despite a ban on such benefits under state law.

The Southwest Home Equity Assurance Program used property taxes it collects to pay the interest on the loans Pannaralla got from Marquette Bank, under a home-improvement loan program the agency created 11 years ago, records show.

In addition, Pannaralla and his daughter, Jennifer Pannaralla, currently have another zero-interest home-improvement loan through the agency, this one for $10,000.

That, too, appears to be in violation of the Illinois Home Equity Assurance Act, which says: “No commissioner or family member of a commissioner, or employee or family member of an employee, may receive any financial benefit, either directly or indirectly” from the program.

The little-known agency Pannaralla oversees is one of the three created under a law Illinois legislators passed in 1988 to curb white flight in Chicago’s bungalow belt. The law guarantees that homeowners who signed up by paying for an appraisal wouldn’t lose money if they sold their homes even if property values declined, as long as they waited five years to sell and as long as property values went down for reasons other than a national housing slump, as has happened.

* This guy really knows how to make money off the public’s dime. And he’s a Madigan guy running a program that Madigan came up with

Kenneth E. Pannaralla — once a top precinct captain for Illinois House Speaker Michael J. Madigan — has made a good living in government.

Pannaralla, 63, gets a pension from the city of Chicago in addition to the three paychecks from his three current government jobs, including one as the executive director of the Southwest Home Equity Assurance Program, a government agency created under a law Madigan co-sponsored.

Madigan, who is also chairman of the Illinois Democratic Party, also gave Pannaralla’s daughter, Jennifer Pannaralla, a one-year legislative scholarship in 2003 to the University of Illinois at Chicago. And Pannaralla’s son, Kenneth, is paid $24,000 a year as an aide to Madigan.

Pannaralla makes a total of $213,418 a year

Great work if you can get it.

* Ironically enough, black flight has become a big issue in Chicago these days

Former magnets for black migrants, including Illinois, Michigan, New York and California, all have had black population declines. Atlanta has even overtaken Chicago as the city with the second-largest black population behind New York City. The black population in Atlanta has grown in the past decade by 473,493. In Dallas it grew by 233,890, and in Houston by 214,928 over the same period. Today, 57 percent of the country’s black population lives in the South, a 50-year high, according to the most recent census data.

Today’s migrants are chasing the same things their forebears sought decades earlier, according to those who have studied the return migration. Others are retiring or returning to familial homesteads, reclaiming land their relatives never let loose.

“There are places like Harlem that no longer have majority black populations because many of the black folks who have lived there for the last 50 or so years have decided to cash in, and they are going to live somewhere more affordable, places that don’t come with the urban baggage that maybe we didn’t ever want but put up with because this was our best chance at a solid economic future,” said Khalil Muhammad, director of the Schomburg Center for Research in Black Culture, part of the New York Public Library and renowned for its collections of historic artifacts. “Those people are going to places that look just the way they want them to look. They are not going to be shackled by a political nationalism or the segregation of the past.”

Meanwhile, Chicago has lost about 181,000 African Americans over the past decade, a drop of 17 percent. Many have fled to the Chicago suburbs. But to a greater extent, who is leaving and where they’re going is difficult to determine, according to demographers. But Brookings Institute reports that these new migrants tend to be financially stable and more educated. Many are students, professionals or retirees.

Obviously, it’s way past time to end that state-sponsored white flight prevention program. It appears to be gamed too much anyway.

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  1. - JoePeoria - Tuesday, Oct 18, 11 @ 6:00 am:

    “This story just gets weirder and weirder”?

    Shouldn’t we just call it cronyism and corruption?

  2. - wordslinger - Tuesday, Oct 18, 11 @ 6:23 am:

    It’s good to be a Madigan precinct captain. How does one hold down three government jobs, anyway? Red Bull?

  3. - JP - Tuesday, Oct 18, 11 @ 7:16 am:

    My guess is that African Americans as well as the White Ethnics who portray the bad guys in the Sun-Times story are both eligible for this spending boondoggle, conveniently identified as “white flight”.


  4. - Bill - Tuesday, Oct 18, 11 @ 7:28 am:

    Its Caspar the friendly Ghost!

  5. - Anonymour - Tuesday, Oct 18, 11 @ 8:27 am:

    The guy is a total ingrate! The Illinois campaign contribution website shows he’s only donated a total of $2,830 to Lisa, the 13th Ward, Bridgeview, and one other since 1998.

    Isn’t that a low total for such a successful, uh, precinct captain?

  6. - State of Illinois - Tuesday, Oct 18, 11 @ 8:48 am:

    Thank you speaker, may I have another

  7. - justbabs - Tuesday, Oct 18, 11 @ 9:13 am:

    I am a property owner on the northwest side who has been paying into this foolish program for a number of years now. When I questioned it, I was told that (the) Ald. Banks was a big supporter of it and there was no way it would be killed. Keep the investigation going.

  8. - justbabs - Tuesday, Oct 18, 11 @ 9:13 am:

    Sorry meant (then) Ald. Banks

  9. - Edge of the 14th Ward - Tuesday, Oct 18, 11 @ 9:13 am:

    Always good to see my neighborhood in the news. :/ For those not in the know, the neighborhoods covered by the Southwest Home Equity Assurance Program are now majority Hispanic (some of them overwhelmingly so). And while I don’t dismiss the corruption going on here, it’s grating to know that the program may be shut down now that white residents are done cashing in. The no-interest / low-interest home improvement loans were particularly appealing to me, but now it looks like I’ll have to find another way to finance my basement finishing project. I guess I can take out a home equity loan, if only I could find that darn home equity. I know I had it laying around here somewhere. Here, equity, equity…

  10. - Anon - Tuesday, Oct 18, 11 @ 10:15 am:

    Pannarella is also on the state Environmental Health Practitioner Board (non-paid). Madigan changed the law for him to let him stay on the board when he reached his term limit.

  11. - Barskittles - Tuesday, Oct 18, 11 @ 10:24 am:

    I bet the ex-Mrs-Pannarella also has a government gig of some kind.

  12. - dupage dan - Tuesday, Oct 18, 11 @ 10:36 am:

    So, Lisa M, do you run with this one or do we have to wait for the US Attorneys to have at it?

  13. - dupage dan - Tuesday, Oct 18, 11 @ 10:37 am:

    Oh, wait - maybe too close to MJM, huh?

  14. - MOON - Tuesday, Oct 18, 11 @ 11:15 am:


    I read the same article as you regarding this situation. What I read did not indicate any illegal activity. What do you know that the rest of us do not know?

  15. - Seriously??? - Tuesday, Oct 18, 11 @ 11:20 am:

    Madigan helps himself and the people that help himself. So much for being a “public servant”. What good is protecting your majority if you don’t do anything productive with it?

  16. - MOON - Tuesday, Oct 18, 11 @ 11:25 am:


    I meant to say anything illegal done by Madigan.

  17. - Chris - Tuesday, Oct 18, 11 @ 12:16 pm:

    “Atlanta has even overtaken Chicago as the city with the second-largest black population behind New York City. The black population in Atlanta has grown in the past decade by 473,493.”

    Not the real topic, but I cannot let this lie:

    Atlanta’s 2010 census count is 420,003 *TOTAL*. It cannot have had an increase in its black population of 473,493 *ever*. They mean the metro area, which is *entirely* different from “the city”.

    Chicago, “the city”, *still* has a larger black population than Atlanta, “the city”, has *people* of any skin tone. More than DOUBLE, in fact. And over FOUR times the black population, in “the city”.

    Heck, Chicago’s decrease in black population (181,000) is nearly as large as Atlanta’s current black population (226,894, which is also down, nearly 30,000, from 10 years ago, when it was about 255,000).

  18. - Chris - Tuesday, Oct 18, 11 @ 12:34 pm:

    “What I read did not indicate any illegal activity [done by Madigan].”

    Sure not “illegal”, but are you really going to defend that?

    The former MJM precinct captain who has three public jobs AND is drawing a public pension?

    Maybe not “illegal”, but certainly inappropriate and *definitely* too close to the Speaker.

  19. - MOON - Tuesday, Oct 18, 11 @ 12:54 pm:


    What is there to defend? What did Madigan do thats inappropriate? I am not defending Pannaralla, if he did wrong then he deserves the consequences of his deeds.

  20. - Irishpirate - Tuesday, Oct 18, 11 @ 1:12 pm:

    Stay calm, all is well.

    Uncle Mike has taken care of everything.

  21. - wordslinger - Tuesday, Oct 18, 11 @ 1:15 pm:

    –My guess is that African Americans as well as the White Ethnics who portray the bad guys in the Sun-Times story are both eligible for this spending boondoggle, conveniently identified as “white flight”.–

    Um, not a whole lot of blacks buying homes on the Southwest Side, historically. Certainly not within that program’s boundaries.

    And the program certainly was set up to prevent the “white flight” and “block-busting” that happened on much of the West Side in the 60s and 70s. Neighboring Oak Park, I believe, set up the first such program in Illinois back in the day.

  22. - Chris - Tuesday, Oct 18, 11 @ 1:28 pm:

    “What is there to defend? What did Madigan do thats inappropriate? I am not defending Pannaralla, if he did wrong then he deserves the consequences of his deeds.”

    I believe it is this attitude that PatFitz was referring to.

    Yeah, we pretty much DO get the government we deserve in Illinois.

  23. - MOON - Tuesday, Oct 18, 11 @ 2:09 pm:


    There is nothing wrong with my attitude.

    Its your attitude that needs adjustment.

  24. - Chris - Tuesday, Oct 18, 11 @ 3:08 pm:

    “There is nothing wrong with my attitude.

    Its your attitude that needs adjustment. ”

    Oh? My attitude that because the actions of our elected officials aren’t illegal, they must be okay, no matter how much they stink? That attitude?

    So, what job(s) did the Speaker help you get, MOON? What’re you going to collect in public pensions when you retire from those jobs?

  25. - Rich Miller - Tuesday, Oct 18, 11 @ 3:14 pm:

    Enough. Both of you need to stop this now. Move along or go away.

  26. - Park - Tuesday, Oct 18, 11 @ 8:15 pm:

    This is Illinois.

Sorry, comments for this post are now closed.

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