Minutes after supporters of Gov. Bruce Rauner assumed leadership of one of the biggest government pension funds in Illinois, they shook up the way hundreds of millions of dollars are invested — in the process ousting a union-run money manager.
The Republican governor’s appointees to the Illinois State Board of Investment voted to shift $697 million into investments designed to mimic the financial markets’ performance — a move the board’s new chairman says will benefit taxpayers by slashing multimillion-dollar money-management fees.
In line with Rauner’s anti-organized labor stance, one of the managers the board dumped was Ullico, a union-owned investment firm that lends money to construction projects that agree to hire union labor.
The board’s vote to pull its $65.4 million investment in Ullico’s “J for Jobs” fund was along political lines. The four Rauner appointees and two Republicans who are on the board because of other offices they hold voted to dump Ullico. Two Democratic elected officials and a union leader voted “no.”
Marc Levine, the Rauner appointee elected board chairman at the start of the Sept. 17 meeting, says the governor’s battle with organized labor had “absolutely” nothing to do with the decision.
Says Rauner spokesman Lance Trover: “The governor’s office does not, and did not, instruct the Illinois State Board of Investment on how to invest taxpayer dollars.”
Go read the whole thing for more of the board’s reasoning, which makes some sense. But also keep in mind that Ullico’s president and CEO is Ed Smith, a former bigtime labor union leader from southern Illinois.