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Unions demand Fahner probe

Wednesday, Jul 24, 2013

* From a press release…

The following statement is attributable to the We Are One Illinois union coalition, in response to the revelation by Ty Fahner, president of the Civic Committee of the Commercial Club of Chicago, that members of the Civic Committee lobbied the three major credit rating agencies to downgrade Illinois’ bond ratings:

    “Ty Fahner and unnamed members of his corporate-backed committee have shown their true colors. Fahner bragged openly about joining members of the business-backed group, behind closed doors, in lobbying credit rating agencies to lower Illinois’ bond ratings in an irresponsible and unethical attempt to put the state in an even more difficult position. They show total contempt for the taxpaying public, total disregard for the difficult fiscal challenges the state faces, and total hypocrisy over their alleged care for the working families of Illinois.

    “In addition, a serious conflict of interest may exist if either these unnamed CEOs or the big corporations they control profited in any way from lobbying to make Illinois pay more interest on its bonds — bonds which they or their corporations may hold.

    “Governor Pat Quinn should coordinate with the appropriate state and federal authorities to launch a full investigation into this matter. The public has a right to know whether any laws were violated and how much financial injury the Illinois taxpayers suffered at the hands of the corporate elite.”

Yesterday, Capitol Fax shared a video of Fahner speaking before the Union League Club, where he said, “Me and some of the people that make up the Civic Committee…did meet with and call…Moody’s and Fitch [Ratings] and Standard and Poor’s…and say, ‘How in the hell can you guys do this [i.e., maintain the state’s credit rating]? You know, you are an enabler to let the state continue. You keep threatening more and more and more.’”

Fahner then took credit for the subsequent downgrades to Illinois’ credit ratings, stating, “But if you watch what happened in the last few years, it’s been steadily down. Before that, it’s been the blind eye.”

Discuss.

- Posted by Rich Miller        

74 Comments
  1. - siriusly - Wednesday, Jul 24, 13 @ 1:21 pm:

    Lots of demands get made via press release that are normally useless fluff. This one to me seems to be somewhat legitimate.

    Of course the ratings agencies can just deny and say Fayner was “bloviating” but this seems like an issue that should be looked at, not bragged about.


  2. - Keyrock - Wednesday, Jul 24, 13 @ 1:22 pm:

    Not seeing this story on the Tribune website yet.


  3. - cod - Wednesday, Jul 24, 13 @ 1:22 pm:

    Mr Fahner does indeed refer back to the names of his co-conspiritors who talked-down the bond ratings. The folks at WeAreOne should listen to the video more carefully: Scott Santi, Lester Crown, James Farrell, and Miles White were the names of the Civic Committee members he mentioned.


  4. - John Bambenek - Wednesday, Jul 24, 13 @ 1:29 pm:

    Let’s skip past the fact it’s kind of a jerk move.

    Is the Unions’ position that the mere act of some business guys (private citizens) talking to bond rating agencies (private citizens) about their opinions rises to criminal conduct? I mean, really guys?

    It’s third world banana republics that criminalize criticism of government action (or inaction).


  5. - Crypto - Wednesday, Jul 24, 13 @ 1:33 pm:

    This is rich. Unions who helped bankrupt state blaming someone for talking about the mess. In a normal world, this press release would be mocked off the stage.


  6. - A guy... - Wednesday, Jul 24, 13 @ 1:35 pm:

    Still got to think about this a little more, but on the face of it I’m not sure he “bragged” about it. This is part of the overall issue that legislators would do nothing but delay without real and hard consequences standing in front of them. It should not have to come to this, but unless I’m seriously mistaken, more progress has been made since these consequences have presented themselves. It’s nothing to brag about. We reside in shame until something substantive gets done.


  7. - 47th Ward - Wednesday, Jul 24, 13 @ 1:44 pm:

    ===Is the Unions’ position that the mere act of some business guys (private citizens) talking to bond rating agencies (private citizens) about their opinions rises to criminal conduct?===

    No, that’s not quite it. The question is whether any of the private citizens involved stood to profit from a downgrade of the state’s bond rating. I doubt that is the case, but it’s a valid question for the unions.

    I’m just delighted that the unions and the Commercial Club are now directly engaged. This fight is between them and up until now has been fouoght via proxies in the political system. The choice before Illinois on pensions is this: who pays, and how much. Unions want the taxpayers to pay, and the Commercial Club wants the unions to pay. Everything else is window dressing.


  8. - Knome Sane - Wednesday, Jul 24, 13 @ 1:47 pm:

    What’s more appalling, that Fahner and the Civic Committee of the Commercial Club of Chicago lobbied the three major credit rating agencies to downgrade Illinois’ bond ratings or that the rating agencies actually listened to them?


  9. - factory worker - Wednesday, Jul 24, 13 @ 1:55 pm:

    Anyone paying attention knows the greatest issue regarding this pension “problem” is the corporate agenda, not a bloated pension issue. Any person who thinks otherwise, especially if they really work for a living, private or public, should stop beleiving everything they think. Unfettered capitalism and deregulation, corporate subsidization et al,are the things that make this last 30 years of economic decline for 90% us the basis of this problem, not to mention unnecessary wars that sap trillions in unproductive value from society. If you make less than 200 grand a year and think you would be better off by supporting civic committees and chamber of commerce positions you are deluding yourself based on years of corporate propoganda. Graduated income taxes, financial tranistion taxes, good jobs and rules of the road for corporations can solve these problems along with a few other fixes. Why the heck are the corporate Czars at the forefront of this anyway? Talk about wolves guarding the henhouse?


  10. - Ahoy! - Wednesday, Jul 24, 13 @ 1:56 pm:

    Not sure why this should be a criminal investigation, obviously Fahner and the Civic Committee should loose all public trust and called out for their actions against the State. I’m just not sure the “investigation” is warranted, especially with that whole, first amendment rights issue we have in our country.

    Is there any laws that could have been broken here?


  11. - too obvious - Wednesday, Jul 24, 13 @ 1:57 pm:

    If displaying horrible political skills was a crime, Ty Fahner would get a life sentence.


  12. - cod - Wednesday, Jul 24, 13 @ 1:59 pm:

    If it was only Mr Fahner, the president of the Civic Committee, that talked down our own states bonds, it would just be a nasty and un-civic act by a group supposedly set up to benefit the citizens. But if the clients who hire the ratings agencies to rate their bonds were using their clout to increase the interest rates the taxpayers pay for public bonds, that is something far more serious.

    There is also the question of whether those CEO’s took financial advantage of knowing in advance that bond rates would go up. That would indeed be shocking, and it must be investigated, lest that suspicion festers and completely destroys the credibility of the Commercial Club.


  13. - iThink - Wednesday, Jul 24, 13 @ 2:04 pm:

    ==I’m just not sure the “investigation” is warranted,==

    I need to think more about this, but it would seem to me if these folks stood to make a lot of money by misrepresenting the fiscal state of Illinois (making it look worse than it is) by fleecing the taxpayers that it may be collusion. Or not, depends on the details.

    As for the 1st amendment, that doesn’t include insider trading does it? There are limits.


  14. - Anonymiss - Wednesday, Jul 24, 13 @ 2:05 pm:

    Not to mention - if these financial managers are lobbying down the state’s rating, it’s ostensibly costing their clients more to do business, which I can’t imagine their clients would appreciate or should even tolerate.


  15. - Former State Employee - Wednesday, Jul 24, 13 @ 2:13 pm:

    His statement was bold and “in your face”…..see what we can do? Just the bravado warrents a second look, but apparently we can’t rely on the Trib to take even a first look.


  16. - Frenchie Mendoza - Wednesday, Jul 24, 13 @ 2:17 pm:

    The irony in all of this is that here’s Fahner (channeling Romney) and advocating ways to achieve and/or maintain income inequality, while Obama today is in Galesburg advocating the notion that our growing income inequality is morally wrong.

    The difference between the two sides couldn’t be more clear.


  17. - cod - Wednesday, Jul 24, 13 @ 2:20 pm:

    Dont expect the Tribune to take up this story, except to play it down. Tony Hunter, Tribune CEO, and John W Madigan, retired CEO of the Tribune are both current members of the Civic Committee.


  18. - Formerly Known As... - Wednesday, Jul 24, 13 @ 2:23 pm:

    This must be a joke.

    A private citizen exercises their freedom of speech to express concern about Illinois current bond rating.

    And someone wants to use taxpayer dollars to probe the comments made by a private citizen?

    Without any evidence or indication of impropriety other than the fact they do not like what that private citizen said?

    No wonder we’re broke.

    I may not agree with Fahner, but this press release is a bit obnoxious - if not designed to intimidate one of their rivals.


  19. - Huh? - Wednesday, Jul 24, 13 @ 2:27 pm:

    “Unions who helped bankrupt state blaming someone for talking about the mess.”

    Crypto - Before you blame the unions, take a hard look at the legislature and all of the pension holidays that they proposed and passed. The bankrupting of Illinois can be laid on the desks of the legislature.


  20. - Huh? - Wednesday, Jul 24, 13 @ 2:29 pm:

    “A private citizen exercises their freedom of speech to express concern about Illinois current bond rating.”

    If you or I were to call a bonding agency, do you seriously think that our calls would be taken?


  21. - cod - Wednesday, Jul 24, 13 @ 2:30 pm:

    It is my understanding that Moodys, Fitch, and Standard & Poors are hired and paid by the corporation or government that wants to issue a bond. When Illinois (the taxpayers) pays for such rating services, they expect an objective analysis, not one that has been secretly lowered by third parties who exerted pressure to do so.


  22. - My Thoughts For Whatever - Wednesday, Jul 24, 13 @ 2:31 pm:

    This whole story is just another short chapter in The Gap Widens Story. Who benefits the most when Illinois’ bond ratings are lowered? Sure … the “state” pays more over time, but when this concept is interpreted it simply means the taxpayers of Illinois are dumping more money into the pockets of the investors. There was an interesting stat on this site recently: Between 1979 - 2010 inflation-adjusted wages for the bottom 60% DROPPED while the top 10% has INCREASED 23%.


  23. - kimocat - Wednesday, Jul 24, 13 @ 2:32 pm:

    I have no clue as to the inferred illegality. But it should certainly show what kind of people these folks are — and it is not a pretty picture.


  24. - hisgirlfriday - Wednesday, Jul 24, 13 @ 2:35 pm:

    Bruce Rauner is listed as a member of the Civic Committee on their website. Was he a part of this lobbying effort? Would he as governor lobby the ratings agencies to downgrade Illinois to put political pressure on his opponents to do what he wants?


  25. - Demoralized - Wednesday, Jul 24, 13 @ 2:35 pm:

    I’m not sure what there is to investigate as far as the Civic Committee is concerned. They can talk to whoever they want and say whatever they want. If the bond rating agencies listen to them, then that’s a different story. My concern isn’t with the Civic Committee. My concern would be with the rating agencies if they took anything the Civic Committee said as part of their analysis on the downgrade. If you want to investigate something, investigate that.


  26. - hisgirlfriday - Wednesday, Jul 24, 13 @ 2:37 pm:

    Formerly Known As - I don’t think freedom of speech means what you think it means. If it did then any one accused of insider trading could just use a freedom of speech defense.

    If these guys are out there publicly saying Illinois is awful and needing to be downgraded that is one thing.

    If these guys are mounting a concerted effort to use their wealth and influence behind the scenes to get a supposedly objective ratings agency to skew their ratings in the way that they want, that is a whole other thing, even if they didn’t break any laws doing it. It’s wrong for anyone pretending to be civic-minded to do that.


  27. - kimocat - Wednesday, Jul 24, 13 @ 2:38 pm:

    I guess I never really understood what a “Civic Committee” was supposed to do. I guess it just stands for trying to get your name on public buildings without ever having to pay for them — that’s for the little people.


  28. - Tie me down - Wednesday, Jul 24, 13 @ 2:39 pm:

    Ty Fahner, as the former Attorney General of Illinois, and as president of the Civic Committee acting on behalf of the Commercial Club of Chicago, the most powerful and influential business group in the Midwest, is hardly a private citizen.


  29. - Formerly Known As... - Wednesday, Jul 24, 13 @ 2:45 pm:

    === If you or I were to call a bonding agency, do you seriously think that our calls would be taken? ===

    We wouldn’t get past the receptionist. They have the right to listen to whomever they choose, which speaks to the excellent point @Demoralized made earlier - the ratings agencies can take a call or meeting with these indivduals if they want. Just as long as they’re not giving their opinion much credence. That would really worry me.

    “Oh, we downgraded those bonds because the Civic Committee suggested it.”

    That’s a great way to put out a poor product - especially on the heels of the MBS ratings debacle.


  30. - Grandson of Man - Wednesday, Jul 24, 13 @ 2:53 pm:

    “Unions want the taxpayers to pay.”

    What you say is true, but you omit the fact that unions made and offered concessions. What concessions do the Civic Committee offer?

    The tax ideas the unions propose would help a large majority of Illinoisans. The progressive income tax would mean a tax cut for most earners. Ending some corporate tax breaks would not directly impact the vast majority of us. A financial transaction tax of would also be a light lift. The table is always open for the Civic Committee and its allies, but they have to come willing to compromise.

    The Civic Committee would excoriate Rep. Hays, a Republican, for supporting SB 2404 and not SB 1, and any other Republican who didn’t vote for SB 1.

    We have to remember the Civic Committee’s golden rule, that it will compromise only after it won’t.


  31. - Formerly Known As... - Wednesday, Jul 24, 13 @ 3:02 pm:

    @hisgirlfriday - I’d refer you to my comments on the other thread. We are largely in agreement regarding motives.

    My concern with this press release stems from the fact that WeAreOne is calling for a taxpayer funded investigation with absolutely no evidence whatsoever of insider trading, etc.

    We should not be using public funds to intimidate our political opponents and chill speech, regardless of partisanship.

    Now, if there is something more to this than trying to muddy up an opposing group, then We Are One should submit something more than baseless conjecture based on their agenda. Some sort of evidence or basis for asserting this and making these accusations.

    Give us some facts, We Are One.

    Consider it the Golden Rule of Public Investigations:

    Don’t try to destroy someone’s reputation and bring the government down on them just because you disagree with them - lest they do the same to you (or anyone, for that matter).


  32. - Lord Stanley's Cup - Wednesday, Jul 24, 13 @ 3:03 pm:

    @hisgirlfriday brings up a valid point. Has anyone asked the Rauner camp if he advocated for a downgrade from the bond houses in order to pressure action on pension reform?


  33. - Formerly Known As... - Wednesday, Jul 24, 13 @ 3:24 pm:

    In a nutshell, the reason We Are One is wasting our time:

    If they were genuine in their concern or purpose, they would notify the SEC and share evidence of their cause for believing that some sort of insider or market manipulation took place. The SEC would likely laugh them out of the room, since there appears to be absolutely no such evidence.

    Otherwise, it feels as though We Are One is seeking to intimidate a political opponent. Using our state tax dollars.

    We Are One can certainly do whatever they choose to further their agenda, since they are entitled to the same free speech as the Civic Committee. Using their own money.

    Please share some proof, We Are One. Or stop making baseless allegations and demanding the use of state tax dollars to tar your political opponents.


  34. - wordslinger - Wednesday, Jul 24, 13 @ 3:44 pm:

    –Is the Unions’ position that the mere act of some business guys (private citizens) talking to bond rating agencies (private citizens) about their opinions rises to criminal conduct? I mean, really guys?–

    JB, you’re talking out your tukkus.

    By federal law and SEC regulations, Illinois is required to get ratings from NRSOS before going to market.

    The state pays a lot for that. For last month’s GO issue, the state paid $332,000 to Moody’s, S&P and Fitch.

    What is the role of these private citizens in that process? Do you think you or I are taking meetings down at Battery dive bars with the rating agencies? How come Ty and the Gang can, when their open objective is to drive the state’s rating down?

    You don’t see a problem there, cousin?

    The state is paying the rating agencies. They have a right and obligation to find out what these private individuals are up to.

    Call some hearings. Let’s hear some testimony from our vendors.


  35. - qwerty - Wednesday, Jul 24, 13 @ 3:45 pm:

    “Unions want the taxpayers to pay.” Unless slavery is reinstituted, people do in fact expect to be paid for their work. Virginia, there is no Santa Claus.


  36. - Anonymous - Wednesday, Jul 24, 13 @ 3:46 pm:

    its not a baseless allegation when there is a recording :)

    it does raise legitimate questions about bond ratings which are relied upon by investors if buisness organizations can manipulate those ratings, then everyone should be concerned.


  37. - Anon - Wednesday, Jul 24, 13 @ 4:03 pm:

    We Are One and the Commercial Club are both playing politics, but the Commercial Club’s members have long been beneficiaries of a variety of government subsidies and it has been the legislature and not the union’s fault.

    Ultimately, that the rating agencies take their meetings at all suggests the system is broken.

    David Sirota makes an interesting argument worth a read (that Gov. Quinn may want to study up on in his primary against Daley) about the national state of political warfare going on between the left and right with corporations focusing on union pensions to protect corporate welfare and tax cuts on the heels of Detroit’s bankruptcy filing.

    “That brings us to how this all plays into the right’s push to enact ever more regressive tax cuts, protect endless corporate welfare and legislate new reductions in workers’ guaranteed pensions.

    These latter objectives may seem unrelated, but they all complement each other when presented in the most politically opportunistic way. It’s a straightforward conservative formula: the right blames state and municipal budget problems exclusively on public employees’ retirement benefits, often underfunding those public pensions for years. The money raided from those pension funds is then used to enact expensive tax cuts and corporate welfare programs. After years of robbing those pension funds to pay for such giveaways, a crisis inevitably hits, and workers’ pension benefits are blamed — and then slashed. Meanwhile, the massive tax cuts and corporate subsidies are preserved, because we are led to believe they had nothing to do with the crisis. Ultimately, the extra monies taken from retirees are then often plowed into even more tax cuts and more corporate subsidies.”

    http://www.salon.com/2013/07/23/dont_buy_the_right_wing_myth_about_detroit/


  38. - Andrew Szakmary - Wednesday, Jul 24, 13 @ 4:06 pm:

    I think this whole episode demonstrates that the Civic Committee’s golden rule is: he who has the gold, rules.


  39. - nothin's easy - Wednesday, Jul 24, 13 @ 4:09 pm:

    Are facts necessary to stimulate an investigation? Aren’t suspicions the reason why investigations begin? FKA alluded to the ratings agencies being under investigations and civil charges in matters relating to the mortgage-backed securities. Forbes’ recent article bringing attention to a potential conflict of ratings in two similar situations certainly raises the specter of suspicion. No, facts are not necessary yet. But, an investigation may be appropriate to determine the facts. Loose lips certainly do sink ships…


  40. - Chavez-respecting Obamist - Wednesday, Jul 24, 13 @ 4:18 pm:

    It’s not the unions nor their members who haven’t paid for their share of their own pensions.


  41. - hisgirlfriday - Wednesday, Jul 24, 13 @ 4:18 pm:

    @FormerlyKnownAs

    Just curious if you were as concerned about folks using our tax dollars to intimidate a political opponent with a taxpayer-funded investigation unlikely to yield criminality when opponents of Michael Madigan were calling for new taxpayer-funded prosecutors to check out the Metra scandal?


  42. - Madison - Wednesday, Jul 24, 13 @ 4:28 pm:

    Yes somebody who has “manufactured” a crisis needs to jawbone the ratings agencies. What are the chances that these clubbers have illinois’ bonds in their portfolios?


  43. - reformer - Wednesday, Jul 24, 13 @ 4:29 pm:

    JB, FKA

    The legal issue aside for a moment, do you approve of powerful IL businessmen lobbying to downgrade their state’s credit rating, leading to higher borrowing cost? Does civic-mindedness means working for the common good, or does it mean trying to manipulate rating agencies — at great cost to taxpayers — to achieve their political goals?

    FKA: You express concern that tax dollars not be used in an investigation. How about concern that tax dollars not be wasted paying higher interest rates than would be required in the absence of such backstabbing by the people you defend?


  44. - Harry - Wednesday, Jul 24, 13 @ 4:35 pm:

    I am pretty amazed at the commenters who are defending the Civic Committee trying to talk down the State’s credit rating, thereby increasing costs, and who have no interest whether anyone involved stood to profit. Unless they stood to financially benefit, there’s no crime involved or implied, but I certainly am interested in what it says about their judgment, priorities, and claims of civic-mindedness, and how I should view their statements in the future.

    Seems to me the Civic Committee has done nothing but poison the well and make pension reform more difficult, and have been doing so for several years. Good intentions (and whether their intentions are good depends on your point of view) do not excuse stupid, ignorant, and self-defeating actions. As far as I can see, they have been Labor’s biggest ally in stopping pension reform, regardless of their intentions.


  45. - Diogenes in DuPage - Wednesday, Jul 24, 13 @ 4:38 pm:

    … if only all that public pension money were in 401k accounts not managed by state pension agencies but in financial institutions (some linked to the Civic Committee individuals?), then ….
    Hmmm …


  46. - low level - Wednesday, Jul 24, 13 @ 4:53 pm:

    @ Bambanek - Yes, and now unions (members are private citizens, last time I checked) are raising questions.

    Oh, and union members pay taxes, also, so I will anticipate the old, worn out, bogus claim that the “taxpayers” are footing the bill. Last time I checked, everyone pays taxes in this state in one form or the other.

    And now, thanks to good ole’ Ty, we’ll now be paying MORE in taxes on debt service! Doh!’


  47. - Formerly Known As... - Wednesday, Jul 24, 13 @ 5:06 pm:

    @hisgirlfriday

    You may recallmy comment on the Metra/Madigan situation even began with “Meh.” - https://capitolfax.com/2013/07/19/madigan-foe-to-probe-metra-allegations/#comment-11333918

    You may also recall that I have had the same disdain for groups like Open the Books and their desire to use taxpayer money to further their agenda right around the time their leader was being rumored as a possible candidate for public office.

    I do try to hold a common standard here.

    And if there is something here worth pursuing, why hand it off to anyone other than the experts?

    Call the SEC on this. Get the experts involved.


  48. - low level - Wednesday, Jul 24, 13 @ 5:08 pm:

    I can see the ad now:

    “Candidate X took $X thousands of dollars from Ty Fahner.”

    “Ty Fahner and his fat cat friends at the civic committee went to the rating agencies - the very same ones that brought the economy to its knees while the fat cats got off easy, and helped to raise your taxes!”

    “Is X the type of person we want in Springfield?”


  49. - Formerly Known As... - Wednesday, Jul 24, 13 @ 5:11 pm:

    @hisgirlfriday - I would add that the Metra situation involves allegations concerning a public official and the termination of the head of a public agency, so these are not quite the same.

    Again, my reaction on that front is “meh”.

    But that is a FAR cry from a private citizen saying something like “Metra’s bond rating is way too high. Here’s why…”


  50. - Norseman - Wednesday, Jul 24, 13 @ 5:14 pm:

    Word, I knew you would add to the discussion. Thanks.


  51. - DanL60 - Wednesday, Jul 24, 13 @ 5:18 pm:

    Harry is head-on. Civic Club just went radioactive. Everyone needs to step away ASAP.


  52. - Formerly Known As... - Wednesday, Jul 24, 13 @ 5:49 pm:

    @reformer - those are great questions. Part of why CapFax is such a great place to trade ideas and hash them out.

    Here’s my take, legal issues aside; since it sounds as though there are none:

    “do you approve of powerful IL businessmen lobbying to downgrade their state’s credit rating, leading to higher borrowing cost?”

    Not even close. As a matter of fact, I disagree with their actions and it leaves a bad taste in my mouth.

    As Illinoisans, we can and should:
    - label them lousy for doing this
    - express our complete disagreement and disapproval
    - push back strongly
    - even take out ads calling them a bunch of jerks among other words.

    As Illinoisans, we should not:
    - recklessly allege or intimate there was some sort of insider trading taking place without a shred of evidence
    - use taxpayer dollars to settle political scores, destroy individuals or attack groups and people for expressing their view on an issue or doing so in a distasteful manner

    Otherwise, where do we draw the line?

    If it is “market manipulation” to claim our bond rating is too high, then it MUST also be “market manipulation” to claim our bond rating is too low.

    That makes no sense. It’s crazy talk.

    By any standard of equal treatment, if we are to investigate the potential manipulation of markets in regards to Illinois bonds, then we must:

    1. Investigate every investor, public official and civic leader who has opined that Illinois’ bond rating is either too high or too low

    2. Investigate whether the individual did so with the intent of lowering or raising Illinois bond rating

    3. Investigate every Illinoisan who has called, emailed or met with any of the ratings agencies in order to express their view that our bond rating is either too high or too low.

    I, for one, feel that Illinois bond rating is too low. We’ve got problems, but we’re not likely to default any time soon.

    And if I were a public official or head of a large civic organization, I like to think that I would express that personal belief in public, in private and to the ratings agencies themselves if they took my call.

    I suppose now we’ll have to call hearings on me as well after this post. Since I just publicly lobbied the ratings agencies to boost our status.

    Maybe I should call them too, just to make sure I get on the witness list.

    Think they’ll spring for a cup of coffee and a Jimmy John’s sub for lunch during my testimony???


  53. - low level - Wednesday, Jul 24, 13 @ 5:52 pm:

    Harry makes several good points, but what is this “civic club…radioactive…everyone back away” stuff?

    What, they got upset so everyone needs to go into a bunker and be quiet? I don’t understand.


  54. - CircularFiringSquad - Wednesday, Jul 24, 13 @ 6:06 pm:

    Nice stunt
    Now we can only wonder if the group or the media who covers them might poll the Commercial CLub members to see who shorted IL bonds or options and other derivatives for profit after their pitch to trash the debt rating.
    It is also logical to ask them if their companies will give us a list of 501(C)(4)payments to the groups that run all those trashy ads.
    Keep in mind those payments come right out of the corporate till and now the honchos checkbooks
    For instance, did the BigCat tell his minions to write some checks as they announced their profit decline?


  55. - Arthur Andersen - Wednesday, Jul 24, 13 @ 6:11 pm:

    FKA, Well said. Nothing more to add from here.


  56. - Rollo Tomasi - Wednesday, Jul 24, 13 @ 6:37 pm:

    I believe the Ty acknowledged on Chicago Tonight that if a private sector company did to their employees 401K plans what the politicians did to public sector pensions they all would be in jail. Unfortunately for us the elected officials are indemnified and immune for civil or criminal sanctions for their actions.

    The members of the Civic Club can bite the bullet for a few months knowing if they get their way they can make money hand over foot in the years to come.

    Notice how they never talk about Daley’s pension? That’s because they made and are still making money over foot with their sweetheart deals


  57. - Just Me - Wednesday, Jul 24, 13 @ 7:22 pm:

    Anyone can talk to a bondholder. No laws broken unless they spread false information.


  58. - Politico - Wednesday, Jul 24, 13 @ 7:32 pm:

    It will be very revealing to see how the media handles this situation. The Trib has been supporting the Civic Committee hand-in-hand in their every tactic in the past five years. The so called “Civic” Committee and the Tribune (their CEO is a member) must be quite busy tonight, strategizing with their consultants and their fellow travelers on damage control, and what to do about the amazing indiscretions of Mr Fahner comments.

    First and foremost, I expect they will never again allow any cameras near any Civic Committee presentation by their president. Say goodbye to ANY shred of transparency in their future activities.


  59. - Formerly Known As... - Wednesday, Jul 24, 13 @ 8:16 pm:

    Thanks, Arthur Andersen. We’ll leave it at that.


  60. - Jerry101 - Wednesday, Jul 24, 13 @ 9:20 pm:

    Why does anyone even pay attention to a word the ratings corporations (they’re not really ‘agencies’ - they’re parts of huge corporations) say anyway?

    Both Moody’s and S&P have gone on the record saying their ratings and their indepence are mere ‘puffery’ (i.e. bullpucky), so any reasonable investor wouldn’t rely on their ratings.

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aQzRB3sWOivE

    http://www.bloomberg.com/news/2013-07-08/s-p-to-argue-puffery-defense-in-first-courtroom-test.html


  61. - Divest Civic Committee Stocks $$$ - Wednesday, Jul 24, 13 @ 9:26 pm:

    SERS and SURS and the other state retirement systems should sell and boycott all investments in Civic Committee companies. We can boycott as consumers too. They want to take money out of grandma’s and grandpa’s wallets. We can write letters to the pension systems for social justice just like we did for South African companies and Apartheid. This is our money and we should not give it to greedy rich tyrants so they could lobby the rating agencies to destroy our State!!!


  62. - Jerry101 - Wednesday, Jul 24, 13 @ 9:31 pm:

    Rollo - private companies destroyed their pension plans in order to eliminate them and force people into 401k’s.

    A private company can’t raid your 401k (though plenty raided pensions - they even made a movie about it - Wall Street), so, yeah they would go to jail if they raided your 401k. It would be called theft. The problem Illinois has is years of underfunding the pensions (pension plans have defined benefits- the employer has to make good at some point (or declare bankruptcy). 401k’s have defined contributions. If your employer is hard up, they just cut or eliminate the match, leaving you on your own with a heavily fee laden, inferior version of, essentially, an IRA with a lot of extra restrictions), along with sleezy bond vigilantes and unreliable actuarial guesstimates.

    On the other hand, the money in your pension is the pension plan’s and not yours until its paid out.

    Pension plans always beat 401k’s for workers, but 401k’s are cheaper for employers and a lot more profitable for Wall Street.


  63. - 1776 - Wednesday, Jul 24, 13 @ 9:58 pm:

    The union action is a smart political play even though it has no merit. Dozens of commenters are all a twitter and I’m sure some press will pick it up.

    The truth hurts and Fahner is pointing it out. Bond houses have downgraded Illinois more than a dozen times in the past few years and consistently point out our budget and pension problems.


  64. - Smitty Irving - Wednesday, Jul 24, 13 @ 10:21 pm:

    Divest Civic Committee Stocks $$$

    As individuals we can start right now.


  65. - anony - Wednesday, Jul 24, 13 @ 10:34 pm:

    “The truth hurts and Fahner is pointing it out.” Uh, no. Fahner is not pointing out “the truth.” He is actively manufacturing “the truth” by using wealth and clout for manipulation.


  66. - wordslinger - Wednesday, Jul 24, 13 @ 11:42 pm:

    I used to be in the muni business. In fact, I was as much a macher on LaSalle Street in munis as anyone.

    Trust me, Ty and the Boys actions are outrageous. Beyond belief. Immoral.

    I’m going to take a second here, and break all of Rich’s rules for posting…

    Now, done.

    The State of Illinois, having paid hundreds of thousands of dollars, as required by federal law, for its ratings, has a right to know what these private rascals are up to on the side.

    If the U.S. Attorney does not see the possibility of Ty Fahner, Abbott Labs and ITW greasing the rating agencies fot insider trading, then they’re phony as the day is long.

    I’m shocked and amazed that the crews I used to know at the rating agenices would even entertain these meetings.

    It’s not normal; it’s a big deal. It’s wrong.


  67. - low level - Thursday, Jul 25, 13 @ 6:31 am:

    @ wordslinger- great summary. Thank you.

    @ 1776- may we assume you’ll be marching with the don’t tread on me flags again soon?? If you’re going to dress up as Jefferson you better hope the temperature stays nice and there’s no humidity. The turnout on April 15 in Daley Plaza was pretty pathetic this year. Dwindling movement, fading away…


  68. - Some people call me Maurice - Thursday, Jul 25, 13 @ 7:22 am:

    Wow Rich, There’s nothing but teapartiers and conservative Dems on this site. Remember when we enjoyed being a labor state? All your moms and dads that were union say shame on you all


  69. - Sue - Thursday, Jul 25, 13 @ 7:26 am:

    Maybe all of you should contact the White House and ask that the president add this conspiracy to the list of things he is promising to get to the bottom of


  70. - BethB - Thursday, Jul 25, 13 @ 8:56 am:

    Free speech has limitations- shouting fire in a crowded theater isn’t protected as it incites panic and puts people at risk, and so neither should raising the boil of the state’s fiscal mess so that legislators will be more compelled to move through your organization’s (and the buisnesses the represent) economic agenda.


  71. - Obama's Puppy - Thursday, Jul 25, 13 @ 9:02 am:

    Has Rauner commented? I wonder what his phone records look like during this time when the Civic Comm was soliciting the bond houses? hmmmmm?


  72. - William j Kelly - Thursday, Jul 25, 13 @ 9:23 am:

    I am also calling for a probe of Rahm and rauner. But not this kind of probe.


  73. - walkinfool - Thursday, Jul 25, 13 @ 9:47 am:

    Word said it better

    but having been a substantial mover on Wall St, especially with state bonds, I also found this direct lobbying of rating agencies by the Civic Committee members, outrageous.

    I hope the rating agency staff left the meeting laughing at them, but it’s unlikely since these same people might pay their bills in other ways.

    Illegal, probably not. Improper, yes.

    To all those who say this is just “free speech by a private citizen” like me — don’t flatter yourselves. You’re not the Civic Committee, with major company CEO’s and financial entities.


  74. - walkinfool - Thursday, Jul 25, 13 @ 9:54 am:

    Let me add: The one reason I can never again support anything Rutherford wants to do in government, (despite liking him in some ways), is that he also badmouthed his own state to the rating agencies, for partisan political purposes, while being the elected Treasurer of Illinois.

    This is simply unforgivable, unprofessional, and not to be forgotten.


Sorry, comments for this post are now closed.


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