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The stonewalling continues

Monday, Aug 5, 2013

* Progress Illinois tried to do a follow-up to the coverage of Ty Fahner’s comments that he and members of the powerful Civic Committee met with ratings agencies in an apparent attempt to jaw down Illinois’ credit ratings.

The PI folks didn’t get very far. Those refusing comment included

* Gov. Pat Quinn

* The Civic Committee

* Fitch Ratings

* Moody’s Investors Services

* Standard & Poor’s

* From their story

(T)he government has an “obligation to shine some light” on the Civic Committee’s apparent lobbying of the three main credit rating agencies to ensure no illegal activity occurred and that “these corporate giants didn’t profit in some way by this back-room phone calling,” said Bill Looby, a spokesman with Illinois AFL-CIO.

“This is wrong on a lot of different levels,” Looby continued. “If it’s not illegal, it should be. And we should find out what happened, and who did it, and how it was accomplished, and whether or not there was anyone that benefited from it.”

Overall, Lindall says it is “repulsive” to see Fahner furthering the Civic Committee’s “misinformation campaign” to portray the modest and well-deserved $32,000 average pension of a retired employee as “what’s wrong with state government.”

“It goes much further when it appears that, by their own admission, these tremendously powerful CEOs and lobbyists are working behind closed doors to manipulate the creditworthiness, and therefore the cost to taxpayers of the state and the people of Illinois,” he said.

- Posted by Rich Miller        

37 Comments
  1. - Sir Reel - Monday, Aug 5, 13 @ 2:34 pm:

    I get why the Civic Committee and rating agencies won’t comment but why won’t Governor Populist?


  2. - Rich Miller - Monday, Aug 5, 13 @ 2:35 pm:

    ===why won’t Governor Populist===

    Governor Populist has gone to the dark side on this issue.


  3. - Anonymous - Monday, Aug 5, 13 @ 2:40 pm:

    I assume you could add the Tribune to the list not commenting, too?


  4. - Really want to know - Monday, Aug 5, 13 @ 2:41 pm:

    Why isn’t it illegal, isn’t price fixing?


  5. - JC - Monday, Aug 5, 13 @ 2:56 pm:

    By dark side, do you mean pockets?


  6. - Tim S - Monday, Aug 5, 13 @ 3:08 pm:

    Where is Lisa? Seems ripe for an AG investigation.


  7. - Anon - Monday, Aug 5, 13 @ 3:10 pm:

    COULD IT BE (whispering) A c o n s p i r a c y


  8. - Tobor - Monday, Aug 5, 13 @ 3:18 pm:

    Suprised????


  9. - Sue - Monday, Aug 5, 13 @ 3:30 pm:

    How can the folks on this Blog think for a minute that Ty Fahner could somehow impact the State’s bond rating? Moody’s lowered the rating for the sole reason that the legislature has failed to do anything to tackle the pension mess- Wake up folks- absent meaning haircuts in terms of what the State owes to the existing and future annuitants Illinois is going to make Detroit look like a triple AAA credit- keep thinking things can stay status quo if only those conservative businessmen left the Unions and Dems to figure things out


  10. - Chris - Monday, Aug 5, 13 @ 3:36 pm:

    “keep thinking things can stay status quo if only those conservative businessmen left the Unions and Dems to figure things out”

    I love the smell of strawmen on a Monday afternoon.


  11. - wordslinger - Monday, Aug 5, 13 @ 3:36 pm:

    Can you imagine the howling old Pat Quinn would have done on this issue?

    Now, instead of going after Ty, his administration doles out a sweet $2 million bond counsel contract to his law firm.

    Sad. They’re not going to give him money, anyway.


  12. - Chicago Cynic - Monday, Aug 5, 13 @ 3:38 pm:

    This is a slow-burning scandal in the making. Watch this space.

    Sue, it doesn’t matter whether you can prove that he did cause the rating to be lowered. It matters that he surreptitiously tried to do so when he stood to profit from it. Even if I agree with him on many aspects of the problem, it’s wrong on a whole hell of a lot of levels and should be taken seriously.


  13. - Timmeh - Monday, Aug 5, 13 @ 3:41 pm:

    “How can the folks on this Blog think for a minute that Ty Fahner could somehow impact the State’s bond rating? Moody’s lowered the rating for the sole reason that the legislature has failed to do anything to tackle the pension mess”
    Whether he impacted the rating or not, it doesn’t change what he did. It also doesn’t change how illegal it is if he profited from the bond rating being lowered.


  14. - Reality Check - Monday, Aug 5, 13 @ 3:43 pm:

    @Sue, if that’s the case, then everyone concerned should be willing to answer basic questions such as:

    Who from the Civic Committee talked to who from what ratings agency, when, where, and what was said?

    How do Fahner’s actions comport with his firm’s role as bond counsel for the state?

    Of those individuals who contacted the ratings agencies, did any of them or their firms subsequently purchase Illinois bonds or otherwise profit from the downgrades?

    Many banks are Civic Committee members AND underwriters of public bonds. Did any such bank executives participate in contacting the ratings agencies, and did their institutions subsequently profit from bond issues?

    What did the governor’s office know and when did they know it?


  15. - wordslinger - Monday, Aug 5, 13 @ 3:43 pm:

    Detroit has now replaced Greece as the inevitable destination of doom for the sky-is-falling crowd.

    Any problem, of any kind, that used to ultimately lead to Greece now leads to Detroit.

    Adjust your blinders accordingly.


  16. - Anonymous - Monday, Aug 5, 13 @ 3:45 pm:

    Well, why did the Civic Committee members make the call? Was it out of civic duty? If so, they should explain.

    At their hourly rate, their time is very valuable. Why did they take the time away from their companies? There must be a good answer. Why don’t they give it?

    And the Guv who claims to be worried about the state’s credit rating keeps his mouth shut. He’s a phony, cowardly populist if ever there were one


  17. - SIUPROF - Monday, Aug 5, 13 @ 3:46 pm:

    Anon

    “COULD IT BE (whispering) A c o n s p i r a c y”

    It could be. But is it a conspiracy to do whatever it takes to not pay a higher state income tax?

    Grover Norquist would think it a necessary means to a noble end.


  18. - Somebody Loan Me a Dime - Monday, Aug 5, 13 @ 4:39 pm:

    ARDC does not accept email complaints or other email communications regarding confidential investigations or proceedings. Email inquiries regarding the registration process may be directed to registration@iardc.org. Email inquiries seeking general ARDC information may be directed to information@iardc.org. Contact the webmaster at webmaster@iardc.org. Web site visitors may also contact ARDC by telephone, facsimile or mail at its Chicago or Springfield offices listed below.

    One Prudential Plaza
    130 East Randolph Drive
    Suite 1500
    Chicago, IL 60601-6219
    (312) 565-2600 or, within
    Illinois, (800) 826-8625
    Fax (312) 565-2320 3161 West White Oaks Drive
    Suite 301
    Springfield, IL 62704
    (217) 546-3523 or, within
    Illinois, (800) 252-8048
    Fax (217) 546-3785


  19. - Norseman - Monday, Aug 5, 13 @ 4:48 pm:

    Sue, evidently Fahner believes the had some effect or he wouldn’t said:

    “I think now we’ve backed off, because we don’t want to be the straw that breaks the back”

    You also ask why the commenters on the blog believe Fahner and his co-conspirators had an impact. The reason is that we’ve seen the influence that the rich can exert at so many levels.


  20. - anon - Monday, Aug 5, 13 @ 4:51 pm:

    Bingo on the ARDC. Also, perhaps the State Inspector General to report an ethical violation/conflict of interest in the Mayer Brown bond counsel contract.


  21. - Grandson of Man - Monday, Aug 5, 13 @ 4:58 pm:

    I googled “Civic Committee Illinois credit downgrades” and found that only one major news outlet (beside Capitol Fax) played this story. When I googled “Metra scandal” I got a lot of hits with the Trib, Sun Times and other major news outlets, and local newspapers. So we don’t have Ty’s face plastered tabloid-style on any Chicago newspaper like we have the pension problem and Metra. Liberal media oversight.


  22. - Grandson of Man - Monday, Aug 5, 13 @ 5:07 pm:

    “left the unions and Dems to figure things out.”

    “Sue” if you’re not busy this Thursday and you’re in Chicago, you can come to demonstrate against the anti-ALEC protest in Chicago. It ought to be lots of fun. Bring your tri-cornered hat.


  23. - Somebody Loan Me a Dime - Monday, Aug 5, 13 @ 5:12 pm:

    File a Complaint or Request Information

    The OEIG is authorized to investigate allegations of misconduct made against a State of Illinois official, employee, who is under the jurisdiction of the governor, lieutenant governor, or a state public university, or a regional transit board (the RTA, CTA, Metra, or Pace), as well as others doing business with these entities.

    http://www2.illinois.gov/oeig/Pages/FileaComplaint.aspx


  24. - Cod - Monday, Aug 5, 13 @ 6:31 pm:

    This is a major credibility issue for the Civic Committee and their claim to be working towards the betterment of our State.

    There needs to be an objective investigation if their smeared name is to be cleared.

    If it can be, that is.


  25. - Arthur Andersen - Monday, Aug 5, 13 @ 6:34 pm:

    don’t feed the troll, friends.


  26. - wishbone - Monday, Aug 5, 13 @ 7:27 pm:

    “Any problem, of any kind, that used to ultimately lead to Greece now leads to Detroit.”

    And we know it couldn’t happen here because of … well magical powers.


  27. - wordslinger - Monday, Aug 5, 13 @ 8:33 pm:

    Wishbone, what can’t happen here? What are you talking about?


  28. - Truth teller - Monday, Aug 5, 13 @ 9:10 pm:

    It can’t happen here? Really? I think we’re well on our way to it happening here. We’re in a league of our own as far as pension debt is concerned:
    http://www.nbcnews.com/business/pandemic-pension-woes-plaguing-nation-6C10825512

    The can has been so dented from kicking it down the road that it doesn’t even resemble a can anymore!


  29. - wordslinger - Monday, Aug 5, 13 @ 9:41 pm:

    Truth, what can’t happen here? What are you talking about?


  30. - Anonymous - Monday, Aug 5, 13 @ 10:14 pm:

    “Wishbone, what can’t happen here? What are you talking about?”
    “Truth, what can’t happen here? What are you talking about?

    Uh, a fiscal meltdown similar to, but not necessarily the same as Detroit or Greece. Oh, I know it can’t happen here because the courts will mandate taxation at X to the nth power to solve the problem. As I said magical thinking.


  31. - wordslinger - Monday, Aug 5, 13 @ 10:24 pm:

    –Uh, a fiscal meltdown similar to, but not necessarily the same as Detroit or Greece. Oh, I know it can’t happen here because the courts will mandate taxation at X to the nth power to solve the problem.–

    What’s the problem, again? The fiscal meltdown? What’s that look like here in Illinois?

    I’m not aware of Illinois courts mandating taxation, so I don’t think that will happen here.

    I also doubt you’ll see personal income tax rates as high as, say, Wisconsin, Iowa or Ohio.


  32. - Timmeh - Monday, Aug 5, 13 @ 10:32 pm:

    “I also doubt you’ll see personal income tax rates as high as, say, Wisconsin, Iowa or Ohio.”
    And to add, assuming that we are in a such dire straits that we’re risking default, we can raise taxes more than some of the other states/cities out there that are also having pension/deficit problems because our tax rate is already fairly low.


  33. - Truth teller - Monday, Aug 5, 13 @ 11:21 pm:

    With the hole we’re in, raising taxes is a given. Can we raise them enough so future retirees like me won’t have to take a haircut (if I could afford one!) on my benefits? No. A tax hike is only part of the solution. The other is sticking it to state employees because our elected leaders can’t do a hard vote!


  34. - Anon - Tuesday, Aug 6, 13 @ 12:31 am:

    The $17 million pension cost per day turns into $5 million per day. Seems like the cost was being exaggerated. The 96 billion figure thrown around does not mention this is to be paid over the next 40 years. I think that is manageable without taking anything away from those already retired.


  35. - PublicServant - Tuesday, Aug 6, 13 @ 7:48 am:

    I love when The-Sky-Is-Falling crowd, poses a question, then answers it. They’re here to do drivebys, make crystal-ball pronouncements, “retweet” disproven republican talking points, and add nothing to the conversation. As AA said, don’t feed the trolls.

    kthxbye.


  36. - wordslinger - Tuesday, Aug 6, 13 @ 8:55 am:

    I’m convinced that the Civic Committee types assault on public pensions has nothing to do with the state budget, or corporate income taxes, or business climate, but concerns for their personal fortunes.

    The way Illinois’ corporate income tax structure is set up, the multinationals on the list have very little skin in the game. They only pay on profits derived in Illinois, which is a drop in the bucket to their overall business.

    But their personal tax liability is another story.

    Take Abbott Labs and its CEO Miles White, one of the “civic leaders” who allegedly was trash-talking the state to the rating agencies.

    According to its 2012 annual report, Abbott Labs had revenues of $39.9 billion and profits of $6 billion (I guess being headquartered in Illinois ain’t so bad).

    On those profits, Abbott’s total income tax bill for U.S. jurisdictions — federal and all 50 states — was $198 million.

    That’s an-across-the-board U.S. effective tax rate of 3.3%. From a business standpoint, what does Abbott care about the state of Illinois pension liability? They’re not on the hook for state taxes, anyway.

    But Miles Abbott took home $19 million in 2012, and as CEO of a company based in Illinois, the state personal income tax rate is very personal to him.

    For a guy like that, a 3% rate compared to a 5% rate is the difference between a potential $570,000 tax bill and one of $950,000.

    When people start talking about a progressive income tax, you can bet he plotzes.

    If Illinois had Wisconsin’s, top rate of 7.75%, he’s looking at a $1.47 million tax bill. At Iowa’s top rate of 8.98%, it’s $1.7 million.

    When it comes to the Civic Committee and pensions, it’s not business, Sonny — it’s personal.


  37. - concerned - Tuesday, Aug 6, 13 @ 9:29 am:

    - Anon - Tuesday, Aug 6, 13 @ 12:31 am:
    “The $17 million pension cost per day turns into $5 million per day. Seems like the cost was being exaggerated. The 96 billion figure thrown around does not mention this is to be paid over the next 40 years. I think that is manageable without taking anything away from those already retired.”
    You are right, see slide #4 at
    http://cgfa.ilga.gov/Upload/Presentation%206-27-13.pdf


Sorry, comments for this post are now closed.


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