Turn on the Wayback Machine
Friday, Aug 8, 2014 - Posted by Rich Miller
* Three years ago today, I posted a Sun-Times story about Bruce Rauner testing the waters…
Bruce Rauner, the venture capitalist who helped make Mayor Rahm Emanuel a millionaire, is edging toward a run for governor of Illinois as a Republican, prominent Illinois Republicans tell the Sun-Times.
Rauner, 55, is senior principal and chairman of Chicago-based GTCR Golder Rauner LLC, a Chicago-based private equity firm.
He recently garnered attention as a prime mover of the education reform legislation that passed Springfield, smashing teachers’ right to strike and paving the way for longer school days in Chicago.
Rauner has been testing the waters and telling other Republicans he is gearing up to run, senior elected Republicans and Republican campaign veterans told the Sun-Times. Rauner did not return a call seeking comment.
* On a lark, I scrolled through the comments. Some were quite prescient. Here’s “just sayin’”…
Rauner is head and shoulders above Brady, Dillard, and Rutherford. It’s not even close in terms of competence, accomplishment, smarts, and effectiveness.
It’s Major League Baseball vs. t-ball.
If Brady, Dillard, and Rutherford were honest they would say “yeah we pretty much suck compared to this guy.”
“Ghost“…
Dillard needs to start campaining and raising money now
* Some weren’t quite so forward-thinking…
Can anyone name a single big-money, well financed candidate with no political experience that has ever won anything in this state?
I can’t. He might be a great guy, but without any knowledge of how to run or any experience at running, he’s just setting himself up to be milked by campaign consultants.
* Near the bottom is a comment from “Bill.” It was a little weird seeing his comment - almost like bumping into a ghost.
In case you’re a newbie to the site, Bill Naegele commented here for years and gloried in stirring the pot. He passed away in March.
Here is Bill’s observation…
If this Rauner guy is so smart how come he wants to be governor?…and spend his own money, no less~!
I think a lot of us are still pondering that question.
Man, I really miss that guy.
* Speaking of good guys who are now gone, I’ll be leaving soon for the party being thrown in the late Gene Callahan’s honor over at Norb Andy’s. I wouldn’t expect any more posts today.
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Another Frerichs bumble
Friday, Aug 8, 2014 - Posted by Rich Miller
* I completely understand why somebody would stand on principle and refuse to pay a tax that wasn’t owed throughout numerous appeals. I don’t understand why a guy running statewide wouldn’t have just written the stupid little check months ago to get this off the books and then and only then continue with his appeal.
Greg Hinz…
At issue are taxes on two suites of offices [Democratic state treasurer nominee Sen. Michael Frerichs] rents in Champaign from the Champaign-Urbana Mass Transit District. One suite, 600 square feet of offices, has been used since 2007 for Mr. Frerichs’ Senate staff. The other, next door, has housed his political operation since 2010.
Since the transit district is a public agency, it does not owe taxes on property it uses. But a leasehold tax that effectively is the same as a property tax is owed by those who rent space from the district, at least some of them.
Ergo, the Champaign County Treasurer has sent bills to Mr. Frerichs.
And he hasn’t paid those bills, which total a mere $1,814.17 going all the way back to 2008. The Senate President’s office agrees with Frerichs, but the Department of Revenue has ruled against him, just as they earlier ruled against Rep. Monique Davis, who was in an almost identical situation.
* And then there’s this…
Mr. Frerichs also had owed $170.78 for his political office. But that amount was paid earlier this week after a local blogger and Mr. Cross’ campaign began making inquiries.
According to Frerichs Campaign Manager Zach Koutsky, the campaign office bills weren’t paid because they were “incorrectly” mailed to the legislative office, where they perhaps were inadvertently lumped into the larger dispute over whether legislative office is or is not exempt.
Look, I like Mike Frerichs. I think he’d make a good treasurer (as would Tom Cross). But if you’re gonna run for office you gotta clean up this little stuff first.
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Adventures in tracking
Friday, Aug 8, 2014 - Posted by Rich Miller
* Bruce Rauner’s tracker took video today of Gov. Pat Quinn being questioned by Statehouse reporter Hannah Meisel about how his security detail kicked a tracker out of a public event a couple of weeks ago…
An additional irony is that the booted tracker is related to a different reporter who was at today’s scrum. Probably not a great move by the Quinnsters, although the reporter is about as top notch as one can get.
* Meanwhile, remember how the Quinn campaign has been complaining about a tracker who allegedly hides in bathrooms at events to avoid being detected by Quinn security? The Quinnsters say the tracker also changed clothes after being turned away from one event.
Well, the tracker in question is featured prominently in a Rauner door-hanger, which is entitled “Put politics aside, support Bruce and Evelyn” and features endorsements from a couple of Democrats an independent and the GOP tracker…
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Attention iPhone users
Friday, Aug 8, 2014 - Posted by Rich Miller
* Some iPhone owners are telling me they’re having trouble sending me text messages. The texts, they say, are displaying an error message.
As I told you yesterday, I dumped my iPhone for a Samsung Galaxy S5, so I’ve left IOS for Android.
* I shut off iMessages on my iPhone and used a trick I found online to get out of the iMessage system. I had do that because iMessage texts from iPhones weren’t being sent to my Android phone. The fix worked on my end because I’m now receiving texts from some iPhone users. But your iPhone may still think I’m an IOS guy and that’s why you’re getting a failure message.
I think the solution is to click on the failed text and then hit “resend as text message.”
As I’m finding out, IOS does not make it easy to leave.
Any other suggestions in comments would be appreciated.
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Today’s number: 0.00002 percent
Friday, Aug 8, 2014 - Posted by Rich Miller
* Justin Levitt, a professor at the Loyola University Law School writing in the Washington Post…
(R)equirements to show ID at the polls are designed for pretty much one thing: people showing up at the polls pretending to be somebody else in order to each cast one incremental fake ballot. This is a slow, clunky way to steal an election. Which is why it rarely happens.
I’ve been tracking allegations of fraud for years now, including the fraud ID laws are designed to stop. In 2008, when the Supreme Court weighed in on voter ID, I looked at every single allegation put before the Court. And since then, I’ve been following reports wherever they crop up.
To be clear, I’m not just talking about prosecutions. I track any specific, credible allegation that someone may have pretended to be someone else at the polls, in any way that an ID law could fix.
So far, I’ve found about 31 different incidents (some of which involve multiple ballots) since 2000, anywhere in the country. If you want to check my work, you can read a comprehensive list of the incidents below.
To put this in perspective, the 31 incidents below come in the context of general, primary, special, and municipal elections from 2000 through 2014. In general and primary elections alone, more than 1 billion ballots were cast in that period.
Go read the whole thing.
* Kevin Drum did the calculation used in our headline…
So far, he’s found 31 cases representing around 200 individuals. If every one of them turns out be a genuine case of fraud, that’s a fraud rate of: 0.00002%.
And, of course, many of those are only allegations not yet proved.
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Today’s quotable
Friday, Aug 8, 2014 - Posted by Rich Miller
* The Democratic Governors Association is trying to gin up the animosity toward Rauner…
As Chairman of GTCR, Bruce Rauner was a central figure in the formation of ConvergEx. As news breaks that ConvergEx’s CEO will be added to the list of Rauner’s indicted business associates - Rauner is again trying to distance himself from the CEO and the company he formed.
The truth is the that GTCR’s investment model includes picking company managers and management strategies. But Bruce Rauner is banking on the fact that you won’t understand how he made this money through private equity.
Rauner actually said, “Your average voter will never understand what private equity is and I’m not going to try to explain it too much. They’re not going to know.”
OK, first of all, the head of ConvergEx wasn’t indicted. The head of ConvergEx Global Markets Limited was indicted. It’s a subsidiary.
The video of the quote is here. Go to the 44:45 mark.
* Rauner also said this right after that above DGA-supplied quote (which I corrected after watching the video)…
“I help companies grow. I provide capital to help companies grow and that’s about the level of detail that I’m going to get into.”
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And another one…
Friday, Aug 8, 2014 - Posted by Rich Miller
* We have a Rauner manure caption contest already up and running, so let’s do one for the governor as well…
And I know Abe’s ax appears to hover above his head like the Sword of Damocles, but violent imagery in comments is absolutely prohibited here, so keep it light. Thanks!
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* Illinois Public Radio…
Bruce Rauner says there’s “nothing sinister” about venture capital firms using the Cayman Islands as a tax shelter, but says he has never used the investment vehicle for his personal benefit. […]
Until he stepped down to run for governor, Rauner was head of a capital investment firm, GTCR, which has several investment pools there.
At an appearance at the Illinois State Fair last night, Rauner — wearing a plaid shirt, jeans and brown boots — insisted it’s a “widespread, common practice.”
“What my firm did is what many, many financial firms do and I think the majority of venture capital firms and private equity firms do, and that is - when they invest in a foreign company, a non-U.S. company, they’ll set up an investment vehicle, often in the Caymans, so that their limited partners are treated, for tax purposes, the same way as, as if it was a U.S. company.”
He ran GTCR, so if his firm made money off Caymans investments, then he personally profited.
* But the focus is shifting today to another island nation, Bermuda…
The onetime head of a company tied to Bruce Rauner and an associate — men the GOP candidate for governor Thursday called “rogue employees” — have been indicted in federal court in New Jersey on charges they stole millions of dollars in a sophisticated trading fraud.
Anthony Blumberg, 49, of New Jersey, and Craig Marshall, 47, of Bermuda worked for ConvergEx Global Markets Limited, a Bermuda-based broker and subsidiary to a firm Rauner’s former private equity company helped found.
Blumberg and Marshall were indicted late Wednesday on criminal charges of securities fraud, wire fraud and conspiracy to commit securities and wire fraud.
The indictment is here.
* More…
“These were rogue employees at a subsidiary of a company GTCR had invested in,” Rauner campaign spokesman Mike Schrimpf said. “The employees were fired, and ConvergEx cooperated with the investigation. What they are alleged to have done is unacceptable, and they are rightfully being prosecuted.” […]
Rauner joined GTCR in 1981 and was its chairman until stepping down in October 2012 but “had no say in hiring either of the two people,” Schrimpf said.
* Background info from the Quinn campaign…
GTCRauner formed ConvergEx in October 2006 and installed Blumberg as CEO that very month until 2011: http://www.convergex.com/about-us/history
GTCR was the largest shareholder and controlled the board (they had more seats than any other partner)
GTCR features ConvergEx on its website as an example of a successful company: http://www.gtcr.com/our-focus/financial-services-technology/portfolio/convergex-group
Rauner told Chicago Magazine in 2011 that GTCR’s - his- whole business strategy was handpicking executives. Here’s the profile. http://www.chicagomag.com/Chicago-Magazine/June-2011/GTCRs-Bruce-Rauner-Talks-Investments/ Here’s Rauner’s q&a in the article:
Q: Most private equity firms buy mature companies and unwanted divisions of large corporations, managements intact. But you seem to go out and find management and then, together with them, go buy the companies.
Rauner: We’re in two businesses: industry research and executive recruiting. We study industries, and we network like crazy to find the superstars. Today, we’re partners with two dozen CEOs. Some we’re backing for the second, third time. It can take from six months to nine years from the time we meet someone until we actually become partners with each other.
Q: But sizing up the executive is nearly everything?
Rauner: A lot of reference checking. Are they winners? How did they handle failure in their careers? We go to all the trade shows. We call it the leader strategy. Deal flow comes to them. Talented executives come to them.
Key Point: Now GTCR Chairman Rauner wants to pretend he has nothing to do with the guy who was put in place by GTCRauner to be the CEO of ConvergEx from Day One when GTCR was in charge every step of the way? How stupid does he think we are?
* Background info from the Rauner campaign…
BNY and GTCR were equal investors in Convergex. Convergex though was staffed with BNY executives. As shown below, Blumberg was already with BNY and had been since 2002. He came with the deal.
Anthony Blumberg Came Into Convergex From Bank Of New York-Mellon. “BNY ConvergEx management includes Velli, Kerry Pack, John Meserve, Anthony Blumberg, George Costafos and Charlie Raphold from BNY. The trading grossed $297 million last year. Tom Gavin, David Quinlan and Jeff Shoreman make up the Eze contingent. The vendor grossed $43 million last year. Much of that is recurring or commission-like coming from routing orders to brokers. Goldman Sachs, previously a large owner of Eze Castle, does not have a stake in BNY ConvergEx. Operations will be split between New York and Boston, Eze’s current headquarters. The deal is expected to close this year.” (Peter Chapman, “BNY ConvergEx Eyes Hedge Funds with Eze Merger,” Traders Magazine, 8/1/06)
Anthony Blumberg Originally Worked For Credit Lyonnais, And Then Bank Of New York-Mellon, Before Joining Convergex. “Prior to the formation of ConvergEx Group, Mr. Blumberg served as a Managing Director at Credit Lyonnais Securities where he established G-Trade Services, one of the world’s largest global portfolio trading groups, which was later acquired by The Bank of New York and became a part of BNY Securities Group in 2002.” (“Our Leadership Team,” Archived Convergex Webpage, 2/10/11)
…Adding… More from the Rauner campaign…
(T)he Quinn fact sheet you just put up on ConvergEx is false and intentionally misleading. It’s not a typo, the Quinn campaign has repeatedly tried to mislead the public over the last 16 hours by claiming Mr. Blumberg was the CEO of the entire CovergeEx company to give the false impression that he was hired by or otherwise directly connected to Bruce Rauner.
That’s simply false. He was the CEO of a subsidiary to ConvergEx who was hired by Bank of New York Mellon in 2002, four years before GTCR invested. Additionally, GTCR was not the “largest shareholder” of Convergex. It was an equal investor with BNY Mellon, which is why the firm’s and its subsidiary’s leadership, including Blumberg, came over from BNY Mellon.
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* Reid Wilson at the Washington Post…
With no big national wave benefiting either party this year, some Democrats and Republicans are finding themselves unexpectedly competitive in territory that’s usually anything but — and at least half a dozen governors in so-called safe states, who tend to expect few bumps on this stretch of the road to re-election, are finding their campaign fortunes oddly uncertain.
Hawaii Gov. Neil Abercrombie (D) faces voters this Saturday in a Democratic primary in which he has outspent his opponent, state Sen. David Ige (D), by a 10-to-1 margin. Kansas Gov. Sam Brownback (R) won with more than 63 percent of the vote in 2010 in his heavily Republican state. But polls show both incumbents trailing.
Connecticut Gov. Dannel Malloy (D) faces a fierce challenge from businessman Tom Foley (R), who is expected to win his primary election next week. Illinois Gov. Pat Quinn (D) trails his opponent, venture capitalist Bruce Rauner (R), in an ordinarily blue state. South Carolina Gov. Nikki Haley (R) faces a close rematch against state Sen. Vincent Sheheen (D) that has drawn national attention. And Georgia Gov. Nathan Deal (R) is running neck and neck with state Sen. Jason Carter (D), in a state where no Democrat has won the governorship since 1998. […]
Quinn, who won office with just 47 percent of the vote in 2010, signed what he said was a temporary income tax hike, then proposed making the increase permanent.
“Quinn has to significantly improve on his own 2010 performance, after raising income taxes, after falling way short on improving the economy and in the midst of a federal investigation into a 2010 anti-violence program and a lawsuit over patronage hiring practices at the Department of Transportation,” said Rich Miller, editor of Capitol Fax, an Illinois political publication.
Subscribers know the rest of my comment, which also included a warning that Quinn can’t ever be counted out.
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Caption contest!
Friday, Aug 8, 2014 - Posted by Rich Miller
* This pic was sent to me by the Quinn campaign. It features a man holding a Bruce Rauner sign standing in front of a pile of Illinois State Fair manure. I don’t know whether this was staged or not, but they claim it’s a Rauner supporter..
Heh.
Try very, very hard to keep your comments clean. I know it won’t be easy, but try. Thanks.
…Adding… This is obviously no Rauner supporter. I didn’t look at the sign closely enough, but it has an anti-Rauner message, which certainly gives the caption a different potential twist.
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* Drip, drip, drip…
Gov. Pat Quinn’s campaign says the 2013 hiring of an $80,000 per year policy analyst at the state’s transportation agency had nothing to do with politics.
But, records show Edward M. Healy, 29, served as chairman of a campaign fund that had close connections to the Chicago Democrat’s campaign until June of that year.
Healy, who serves as a public transportation policy analyst for the Illinois Department of Transportation, chaired the Stronger Illinois Committee, which raised money from labor unions and funneled it to Democratic candidates running in the 2012 election for the General Assembly
The executive director of the Stronger Illinois committee was Cheryl Byers, a longtime Quinn friend and supporter who is now back on the governor’s campaign payroll as political director after helping him win the race for governor in 2010. […]
Quinn campaign spokeswoman Brooke Anderson dismissed questions that Healy’s hiring at the DOT was political and said Quinn did not create the Stronger Illinois PAC — even though Byers told the state board of elections the address was in the same suite of offices as the Quinn campaign.
* Rauner campaign react…
“Pat Quinn got his start as convicted Governor Dan Walker’s patronage chief so it’s no surprise that Pat Quinn’s administration is now embroiled in its own patronage scandal. It looks like it still pays to know Pat Quinn.” – Rauner spokesperson Mike Schrimpf
*** UPDATE 1 *** The Quinn campaign wants you to know that Healy has a Master’s degree in Urban Planning from Harvard.
And here’s more from the Rauner campaign…
Stronger Illinois Paid Just $250 A Month In Rent For A River North Office
Stronger Illinois Paid Just $250 A Month In Rent For A River North Office. (Illinois Board Of Elections, Accessed 8/7/14)
In 2013, The Average Cost Per Sq. Foot For Chicago Office Space Was $32.24 Per Month. (Chicago Office Market Overview,Colliers International, Q3 2013)
If Stronger Illinois Was Paying Average Rates For An Office Separate From Taxpayers For Quinn, Then The Office Was Just 15.5 Sq. Feet.
Edward Healy’s Brother, Brian, Works For Quinn’s Reelection Campaign
Brian Healy, Edward Healy’s Brother, Is On Taxpayers For Quinn’s Payroll And Has Been Paid $7,582.31 Since January 29, 2014. (Illinois Board Of Elections, Accessed 8/7/14)
Edward Healy’s Sister, Margaret, Was A Quinn Surrogate
Margaret Healy, Edward Healy’s Sister, Appeared At A Quinn Press Conference To Attack Bruce Rauner.“Margaret Healy, a sixth-grade Chicago history teacher at Chicago City Day School, held up her pay stub and talked of living in a basement apartment and sometimes borrowing her parents’ car to make ends meet.” (Natasha Korecki and Sydney Lawson, “Quinn: Rauner Uses Loopholes To Dodge Taxes,” Chicago Sun-Times, 7/9/14)
*** UPDATE 2 *** Quinn was asked about this issue today…
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* From a press release…
The Jim Oberweis for US Senate campaign released the following statewide radio ad to coincide with the 40th anniversary of the resignation of Richard Nixon:
VO: Did you know Article 2, Section 1 of the impeachment against Dick Nixon was for using the IRS against his political enemies?
VO: Did you know Dick Durbin asked the IRS to investigate a political opponent about the same time the IRS began illegally targeting American families?
VO: Did you know Dick Durbin refuses to reveal any other correspondence he may have had with the IRS during the midst of the scandal?
VO: Did you know Dick Durbin took thousands of dollars in campaign contributions from the IRS union and refuses to return the money?
VO: Did you know Dick Durbin refuses to answer whether he supports a Special Prosecutor to get to the bottom of the IRS mess even though most Americans want one?
VO: Paid for by Oberweis for Senate
JO: I’m Jim Oberweis and I approve this message and if you elect me to the U.S. Senate, I’ll make sure we get those answers…. and that the IRS will never again be used as a weapon against American families.
JO: It was wrong when Dick Nixon did it, and it’s wrong when Dick Durbin does it.
JO: To help me stop this type of abuse, please visit my website, jimoberweis.com
To listen to the ad, click here.
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