* Dan Mihalopoulos looks at the GTCR sale of APS Healthcare to Universal American Corp. in 2012…
In a federal lawsuit filed against GTCR, Universal American says Rauner’s firm essentially sold it a $222.3 million lemon after APS and GTCR executives engaged in a “deliberate campaign to conceal the truth.”
In the suit, filed in November in Delaware, Universal American says it was told that APS estimated 2012 revenues of $44.8 million for 2012. Within six weeks of the deal closing, the revenue forecast dropped 40 percent. And four months later, projected revenues were down 90 percent. The final amount was a fraction of the initial forecast, according to court records.
Much of the lawsuit centers on APS’ dealings with an unspecified government agency, referred to in court records only as Customer A. The company’s deal with the agency represented nearly 42 percent of APS revenues, court records show. But Customer A officials allegedly told the company before the sale that it had failed to deliver promised mental health services and could lose the public contract.
Universal American says the gravity of the situation was hidden from the potential buyers by APS executives and by a GTCR managing director named David Katz, who left the firm recently. Katz is a defendant in the suit, which does not name Rauner personally. […]
“Bruce is not involved with this, and it is best to let GTCR’s motions speak for themselves,” Rauner spokesman Mike Schrimpf said Tuesday. “Bruce was never on the board at APS, did not put together the deal and played no role in the management of the company.”
Reuters had this story back in October of 2013. Doug Ibendahl posted the complaint back in March.
* The Quinn campaign yesterday…
Democratic nominee for Lt. Governor Paul Vallas, State Representative Greg Harris (D-Chicago) and Medicaid advocates on Monday questioned Republican billionaire Bruce Rauner’s credibility to run the state’s finances after he profited off fraud and abuse at one of his companies that led to an FBI investigation - and a $13 million penalty for defrauding Medicaid.
While Rauner was at the helm of GTCRauner, his company APS Healthcare, Inc. falsely billed the Georgia Medicaid program and lied about providing disease management care to the poor and the sick.
Following a criminal probe of APS Healthcare by the FBI, the U.S. Attorney said at the time that Rauner’s company “took Medicaid’s money for itself and left some of our most vulnerable citizens without the aid they deserved.”
A Health and Human Services Inspector General Investigator who worked with the said the Rauner company’s crime was compounded by the fact that the criminal Medicaid fraud diverted, “desperately needed resources from those who need it most.”
At a Monday press conference, Vallas said:
“Bruce Rauner has no credibility when it comes to addressing waste, fraud and abuse - in fact, he has profited from fraud and abuse at his company.
* The Quinn campaign today…
New information revealed Tuesday by the Quinn for Illinois campaign shows that a firm controlled by GTCRauner was giving campaign contributions to Georgia lawmakers at the same time it was defrauding the state of Medicaid funds.
It’s already been reported that, following a criminal probe by the FBI, GTCRauner-controlled APS Healthcare settled the charges in 2011.
What hasn’t been revealed, until now, is that APS Healthcare gave $25,150 in political contributions to lawmakers involved in maintaining a troubled contract that the Rauner company eventually lost.
Previous to GTCRauner’s control of the company in 2007, records show, APS had never made political contributions to Georgia lawmakers. This is consistent with Mr. Rauner’s record of pay to play, from Pennsylvania to Stuart Levine to contracts in Cook County.
The U.S. Attorney overseeing the investigation that led to the settlement said that the GTCRauner-controlled firm didn’t merely defraud taxpayers, but “took Medicaid’s money for itself and left some of our most vulnerable citizens without the aid they deserved.” […]
“While defrauding the most vulnerable, as well as the taxpayers, now we learn that yet another Rauner firm was paying lawmakers to keep the spigot open,” Quinn for Illinois Deputy Press Secretary Izabela Miltko said Tuesday.
“The revelations about this apparent pay-to-play arrangement raise new questions. Did Rauner personally approve the political contributions to preserve his contracts? Did he know about the criminal fraud taking place at the time of the contributions? When did he learn of it? What did he do about his own company systematically defrauding Medicaid and exploiting the most vulnerable?
“Time and again we see Bruce Rauner presiding over businesses that exploited the most vulnerable, while he took the profits. The Georgia records appear to show him using money again to get what he wants. Bruce Rauner must explain his role.”
Discuss.
- Illinoise - Tuesday, Sep 16, 14 @ 11:20 am:
“You’re Corrupt!” “Noooo, You’re corrupt!” Rauner is accusing Quinn of improper hiring. As it turns out, Rauner himself already settled hi sown federal charges in 2011. At least no one died when IDOT hired assistants…
- Kasich Walker, Jr. - Tuesday, Sep 16, 14 @ 11:20 am:
Rauner does not need to respond.
Run ads with the wife walking two golden retrievers.
Have her wondering aloud how Pat Quinn could have worked with Blagojevich for so long.
- wordslinger - Tuesday, Sep 16, 14 @ 11:25 am:
Lessons to Illinois GOPers always searching for Medicaid fraud.
It’s those that get the money that commit the fraud.
- Norseman - Tuesday, Sep 16, 14 @ 11:25 am:
Brucey, you have some splaining to do. (With a Cuban accent)
- SAP - Tuesday, Sep 16, 14 @ 11:29 am:
“GTCRauner”. Heh.
- 47th Ward - Tuesday, Sep 16, 14 @ 11:32 am:
===Following a criminal probe of APS Healthcare by the FBI, the U.S. Attorney said at the time that Rauner’s company “took Medicaid’s money for itself and left some of our most vulnerable citizens without the aid they deserved.”
A Health and Human Services Inspector General Investigator who worked with the said the Rauner company’s crime was compounded by the fact that the criminal Medicaid fraud diverted, “desperately needed resources from those who need it most.”
===
Say what you will about a bunch of politically connected people landing jobs at IDOT (and I’m not defending it), but this is a real scandal.
And of course I believe Rauner didn’t know anything about this one either. But I bet he still cashed his bonus check from GTCR.
- Mighty M. Mouse - Tuesday, Sep 16, 14 @ 11:32 am:
It seems that there’s no end to the questionable activities initiated by Brucie’s investment acquisitions.
Not to suggest that Brucie is responsible for any of it, of course. I wonder who he’ll blame when he loses? It certainly won’t be his fault, at least that much is for sure.
- too obvious - Tuesday, Sep 16, 14 @ 11:33 am:
==At least no one died when IDOT hired assistants==
Right on Illinoise.
And that’s why Rauner’s attempts at moral equivalence will continue to fail miserably. Most voters see right through this as the polls are starting to show.
- Roadiepig - Tuesday, Sep 16, 14 @ 11:35 am:
To all of the Rauner apologists:
Every day it seems another example of HOW your man became rich comes out, and they all seem to point towards accounting fraud, gorging at the government trough, or lying about the value of a company to dump it on unsuspecting dupes. You keep saying it is class warfare and hatred of the rich. Here’s the truth- most people don’t dislike people just because they are rich. They do dislike people who get rich the way Rauner seems to have done. Building companies, hiring employees to build or make things, and earning profits for your risks are the American dream. Gutting companies and outsourcing jobs is not.
Pointing out that Quinn is “politically corrupt” does NOTHING to make people who study the candidates want to vote for your man, but as this keeps coming out many will be forced to decide that Quinn is bad but far more tolerable to run this state. There are no dupes for Rauner to sell this damaged state to, so the only question that remains is what profits are left to be made by his skipping the middle men this time around (besides the state tax savings if he does eliminate the 5% income tax increase, but $2 million or so he would save there is peanuts compared to one of his fraudulent business fire sales). I guess we will know come next year…
- The Captain - Tuesday, Sep 16, 14 @ 11:49 am:
If you have a financial interest in GTCR and don’t care who the Illinois governor is this campaign and all the spotlight that comes with it must be infuriating.
- warhed - Tuesday, Sep 16, 14 @ 11:53 am:
wait..i thought rich was GOOD? when did rich become bad? I guess when you are a rich Republican…
“the liberals and the government, booted and spurred, feel born to ride the rest of us”
to paraphase eric hoffeer
- A guy... - Tuesday, Sep 16, 14 @ 11:57 am:
Roadie,
There will be efforts to find as many deals as possible that the Quinn team can put a “handle” on to make their point. For some folks it will take one lousy transaction, some will require two or ten or whatever. You could pull this routine with Jack Welch, Lee Iaccoca, or any number of people who are involved with a huge number of companies or sit on boards. Yes, Mitt Romney too. A lot of people do resent wealthy people. Many rank and file workers think their CEOs earn too much, Sears, Sara Lee, Cat, just about anywhere. It’s an age old grievance.
Public corruption is a big deal now. Property taxes are a big deal. A lot of people will decide who’s crunching them the most personally. You come from a particular constituency, Roadie. Your colleagues there will largely feel like you do. Outside of that group, there will be a host of other thoughts, including this one; public workers got raises and rich pensions while I lost a ton of equity in my house, lost my job, lost the house, or a combination of all of them. Insult to injury- those jackals raised my taxes when I could afford it least…all to keep their patronage pals in place.
I’m not calling that honest or accurate. I am calling it what a lot of folks think.
- How Ironic - Tuesday, Sep 16, 14 @ 12:13 pm:
@ A Guy,
Jack Welch, Lee Iaccoca didn’t literally kill old people to make their money. Bruce and his ilk did. Not figuratively, literally. The actions of HIS company resulted in the deaths of the elderly.
Property taxes don’t kill granny. Bruce Rauner kills old people. For profit.
That’s what ‘a lot of folks think’.
- Larry the Cable Guy - Tuesday, Sep 16, 14 @ 12:21 pm:
What the GOP needs right now is one of the Careerfellas that Rauner demonized. What they have right now is a Goodfella. Indeed, one that nobody sent.
- Roadiepig - Tuesday, Sep 16, 14 @ 12:26 pm:
A Guy…:
My colleagues ( friends, family, coworkers) were almost all voting against Quinn, not for Rauner. A few have changed their minds after finding out who Rauner really is, but many more are so mad a Quinn that they would vote for anyone but him.
I am far from young and have pulled Republican primary ballots since I turned 18. I, too, would have voted for about anyone but Quinn after what he has done the last 14 years. But then Rauner completed his non-hostile takeover. As a life long Republican, I find the trend towards the Rauner/Christy/Walker type of individual to be the leaders in my party to be the wrong direction. Time will tell, but as more of these venture capitalist actually have to run states people end up seeing who they really are and it’s not pretty. Constantly insulting moderate R’s like me is also pushing us away. You may be happy having any person with an R next their name in power. I (and many more like me) aren’t. Thus should be a landslide year nationally for Republicans. If picking Rauner to be my party’s standard bearer causes Illinios to stay D it’s on people who fell for this snake oil salesman.
- Roadiepig - Tuesday, Sep 16, 14 @ 12:29 pm:
Neither will be getting my vote
- A guy... - Tuesday, Sep 16, 14 @ 12:32 pm:
===How Ironic - Tuesday, Sep 16, 14 @ 12:13 pm:
@ A Guy,
Jack Welch, Lee Iaccoca didn’t literally kill old people to make their money. Bruce and his ilk did. Not figuratively, literally. The actions of HIS company resulted in the deaths of the elderly.
Property taxes don’t kill granny. Bruce Rauner kills old people. For profit.
That’s what ‘a lot of folks think’.===
Sure they did Ironic. So did I. I’ve sat on the boards of 3 retirement centers (religiously affiliated)we’re all killers there. Everyone who came to us was in tip-top health, independent, thriving and had no maladies whatsoever. And what did we do? We deteriorated their health, caused them dementia, muscle control loss, Parkinson’s, you name it, we had the power to give them any number of debilitating circumstances. And then, we purposely didn’t watch them every second of every minute or every hour of every day just to seal the deal. All Snark.
The senior center stuff is cynical at best. Go spend a day there. You’ll get it. Bring a change of clothes. It’s very, very hard work.
- A guy... - Tuesday, Sep 16, 14 @ 1:26 pm:
Roadie, I hear you and I feel you. I just don’t agree with you all the way. There are a lot of supporters who are not voting because of the R next to his name. There are plenty voting for him in spite of it. This is a very mixed up electorate this time around, more than I ever remember. A lot of people are going to vote this time according to the ‘beef’ they have. That probably includes both of us. And clearly we’ve come to different decisions. Most the time, we’d probably be on the same side.
- Oswego Willy - Tuesday, Sep 16, 14 @ 1:29 pm:
=== For some folks it will take one lousy transaction, some will require two or ten or whatever. You could pull this routine with Jack Welch, Lee Iaccoca, or any number of people who are involved with a huge number of companies or sit on boards.===
One? Many?
Now Bruce Rauner is Lee Iacocca? Jack Welch.
Rauner is a “Bust Out” specialist.
It’s about the Dollars, not saving Chrysler.
It’s about the payday for investors, not changing or evolving GE.
- A guy... - Tuesday, Sep 16, 14 @ 2:00 pm:
You might want to bone up on those guys Willie. Thousands of business transactions. A small number of bad ones. But for every bad one, there are victims. I’d suggest, humbly of course, that Iaccoca and Welch, and Chrysler and GE, etc. were very concerned about investors. Still are.
- Oswego Willy - Tuesday, Sep 16, 14 @ 2:10 pm:
- A Guy… -,
Are you equating …
Bruce Rauner to Lee Iacocca and/or Jack Welch?
Yes or no, please.
- Frenchie Mendoza - Tuesday, Sep 16, 14 @ 2:23 pm:
All one needs to do is look at Kansas and New Jersey.
Rauner wins, those nightmares will magnify themselves here in Illinois.
Voters may not like Quinn, but the alternative is far, far worse. I suspect many voters know this — or in the initial stages of realizing this.
- walker - Tuesday, Sep 16, 14 @ 2:33 pm:
The very tough job of managing senior care, and the criminal diversion of Medicaid funds to the owners, are two entirely different issues.
- Ducky LaMoore - Tuesday, Sep 16, 14 @ 2:59 pm:
Bruce Rauner throws away GTC like a cheap pack of cigarettes.
You’re doin a bang up job, Rauny
- Siriusly - Tuesday, Sep 16, 14 @ 3:09 pm:
How can he possibly claim he will run government like a business? He doesn’t run any businesses, he just buys and sells them!
- Great Caesar's Ghost - Tuesday, Sep 16, 14 @ 3:47 pm:
=== “Bruce is not involved with this, and it is best to let GTCR’s motions speak for themselves,” Rauner spokesman Mike Schrimpf said Tuesday. “Bruce was never on the board at APS, did not put together the deal and played no role in the management of the company.”
Is someone keeping count of the non-roles? For someone who is as successful as he has been he sure hasn’t been very active.
- steve schnorf - Tuesday, Sep 16, 14 @ 4:10 pm:
I’m waiting to hear if he eats babies before making up my mind
- Norseman - Tuesday, Sep 16, 14 @ 4:23 pm:
=== I’m waiting to hear if he eats babies before making up my mind ===
Heard he’s only into eating kittens and puppies.
- A guy... - Tuesday, Sep 16, 14 @ 4:34 pm:
===Oswego Willy - Tuesday, Sep 16, 14 @ 2:10 pm:
- A Guy… -,
Are you equating …
Bruce Rauner to Lee Iacocca and/or Jack Welch?
Yes or no, please.====
To the extent that he’s a wealthy capitalist investor, sits on dozens of boards, has accumulated wealth and has been extraordinarily charitable with that wealth…yes.
For whatever you’re about to probably concoct in that bean or yours…I’m guessing and predicting…no.
- Arthur Andersen - Tuesday, Sep 16, 14 @ 4:52 pm:
Didn’t Iacocca give us the “Imperial” based on a Dodge Aspen?
That is as heinous as anything being thrown at Rauner IMHO.
- Oswego Willy - Tuesday, Sep 16, 14 @ 5:21 pm:
===To the extent that he’s a wealthy capitalist investor, sits on dozens of boards, has accumulated wealth and has been extraordinarily charitable with that wealth…yes.===
That’s about a simple as anyone in the “.01%”
You said they are equitable, I didn’t
Funny…
…when you want to show Rauner “comparable” to anyone… It’s always about the money. lol
Could Rauner have taken over GE or Chrysler, you know “a hands-on” kinda guy…
Tell me, it’s only money-wise they are the same? That doesn’t say much about the Carhartt and Watch.
- wordslinger - Tuesday, Sep 16, 14 @ 6:01 pm:
The Medicaid fraud and nursing home spots are really going to sting once they get rolled out
They came out too little, too late. before before a primary no one was hardly paying attention to.
That’s not going to be the case in October. Lot of money, lot of people paying attention.
- Arthur Andersen - Tuesday, Sep 16, 14 @ 6:13 pm:
True that, word. Repubs could, and did, write Ibendahl off as a wingnut. Now, the research, and the publicity, will be coming from the heavy hitters. Not that Ibendahl was ever wrong from the git-go on anything I read.
- Arthur Andersen - Tuesday, Sep 16, 14 @ 6:22 pm:
Oh, and in the business Welch was known as “Neutron Jack.” He was known for visiting GE plants and all of a sudden the building was still there but the people were all gone.
My point here is that private equity is as much an art as a science. The real titans of the industry have had some spectacular failures along the way, and will admit as much, often in hilarious, self-deprecating retellings. Rauner would do well to inject some of the humility he shows in private and can the “everything I do is successful” baloney.
- Anonymous - Tuesday, Sep 16, 14 @ 7:30 pm:
customer a ,(pay no attention to the man behind the curtain)don`t sound much like an outsider now
- RNUG - Tuesday, Sep 16, 14 @ 11:31 pm:
- How Ironic - Tuesday, Sep 16, 14 @ 12:13 pm:
You might want to read up a bit on automotive history. Actually, re Lee Iacocca, he was the one responsible for the original Mustang (and variations based on the same platform, including the early Cougar, Maverick/Comet, Granada/Monarch and even the Pinto/Bobcat) having a gas tank that was the floor of the trunk and more vulnerable to damage, especially splitting and possibly a resulting fire during a wreck. People did get killed because of that cost saving measure …