* A gigantic downfall…
Rishi Shah, a 31-year-old college dropout, who co-founded a healthcare media company, became the richest Indian in America with a personal worth of $3.6 billion, for all of a few weeks. His fortune evaporated almost overnight amidst allegations that his company had fudged data and misled advertisers.
Shah’s Chicago-based Outcome Health delivers pharmaceutical advertising to patients on tablets and screens placed in physician’s offices. He became the 206th richest American in the Forbes 400 list after his company raised $500 million based on a valuation of $5 billion in May from Goldman Sachs, Google’s parent Alphabet and the Pritzker Group Venture Capital. […]
The Wall Street Journal alleged that the company exaggerated the number of screens installed in physician offices, inflated data on ad performance and manipulated third-party analyses showing the effectiveness of its ads.
Shah and Outcome Health are now being sued by investors, most of its premium advertisers have fled, the company has laid off a third of its workforce and abandoned its lease of a premium downtown Chicago building for its new headquarters.
* And the alleged scam apparently took the local venture capital world by surprise…
When asked about what surprised them this year, VCs pointed to Outcome Health’s difficulties. After raising more than $500 million in May, the company now faces allegations reported in a Wall Street Journal story this fall that they misled advertisers by manipulating data and inflating the performance of ads. As a result, some of Outcome’s investors are now suing the company for fraud, and in November, the company cut its staff by more than a third.
* And now…
The state has suspended a tax credit agreement with Outcome Health — worth an estimated $6.1 million over a decade — in the wake of allegations that the tech company misled investors and advertisers.
The agreement was part of the EDGE program, short for Economic Development for a Growing Economy, which provides tax breaks for companies that promise to create jobs in Illinois. Outcome Health entered into its EDGE agreement in November 2016, when it was still known as ContextMedia, with a requirement to add at least 175 new full-time jobs in 2017 and 2018. […]
In November, big-name investors sued the company, CEO Rishi Shah and President Shradha Agarwal, alleging fraud as the company secured $487.5 million in funding and rose to a valuation of about $5.5 billion.
The investors — including units of Goldman Sachs and Google and a fund co-founded by Illinois gubernatorial candidate J.B. Pritzker — have filed court documents indicating they have received subpoenas from the Justice Department.
“Anytime that a company gets into legal trouble, almost always when the Department of Justice opens an investigation, we just suspend them for safety precautions, simply protecting taxpayer money,” said Jacquelyn Reineke, a spokeswoman for the Illinois Department of Commerce and Economic Opportunity.
Outcome Health has not collected any of its credits yet, Reineke said.
What a complete mess.
…Adding… From a flack…
Hi, Rich.
I’m reaching out to request an important correction to your post “Illinois pulls EDGE credit for spiraling company after investors (including Pritzker) are subpoenaed.” My firm works with Outcome Health and there are a couple of issues I’m hoping we can clear up. Please let me know ASAP when these issues can be fixed.
This section is incorrect: “Most of its premium advertisers have fled”
Most of the company’s advertisers (including the largest) remain active. In addition, the provider network has been fully retained. Outcome Health is still the largest content network with over 95% of all content partners. Please delete this from the article.
Please also include Outcome Health’s statement, attributed to an Outcome Health spokesperson, that was included in the Chicago Tribune and Chicago Business Journal articles on the subject of the EDGE Tax Credit story:
“Outcome Health remains committed to improving healthcare outcomes for patients, creating technologies, and driving innovation in Chicago. The company is well-positioned for success with its customers, is signing-up new customers, and is committed to the ongoing expansion of its network of more than 145,000 devices at medical offices around the country.”
Thank you,
Jake Klein
Media Strategist
Goldin Solutions
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* AP…
Gov. Bruce Rauner has again vetoed plans to prevent changes his administration want to make to in-home services aimed at keeping elderly Illinois residents out of nursing homes.
The Republican issued a veto message on Friday, saying the bill would reduce the ability “to assess and serve Illinois’ elderly and persons with disabilities.”
However, advocates of the proposal say changing in-home services could result in more expensive nursing home care. The plan would’ve put eligibility standards Rauner wants changed into law.
The bill received 36 Senate votes (enough for an override if everyone shows up), but just 68 House votes (three shy of an override).
* Veto message…
December 29, 2017
To the Honorable Members of
The Illinois House of Representatives,
100th General Assembly:
Today I veto House Bill 1424 from the 100th General Assembly, which would reduce the ability of the State to assess and serve Illinois’ elderly and persons with disabilities. This bill is similar to several pieces of legislation that have been discussed and debated over the last few years. This debate comes at a critical time, as Illinois’ aging population, ages 60 and over, is expected to increase by 57% from 2000 - 2030.
This bill prohibits the Department on Aging from implementing a new program, the Community Reinvestment Program (CRP), which aims to provide the non-Medicaid population of the Community Care Program (CCP) with federally mandated person-centered planning and community-based options. By limiting current services in statute, this bill prevents individual care coordinators from working with their clients on a case-by-case basis to meet the needs necessary for them to remain in their homes. Instead, they will receive only the services which have been available since the program’s inception, well over 30 years ago. While our current service delivery model is crucial to maintaining seniors in their homes and communities, this bill prohibits the department from implementing a more flexible array of service options.
The Department on Aging’s Community Care Program Services Task Force is currently working with advocates, providers, and legislators on a bipartisan plan to develop proactive solutions to serve this rapidly growing vulnerable population. They are tasked with reviewing current CCP services, and recommending solutions to reduce costs while simultaneously retaining our high quality of care. If HB 1424 were to become law, the work of this task force could be negatively impacted.
The bill also sets subjective restrictions on the implementation of the new Universal Assessment Tool (UAT) that is set to replace the outdated Determination of Need (DON) eligibility tool. Created to be objective and truly evaluate the needs of an elderly resident, this bill restricts the Department’s ability to implement the Universal Assessment Tool by guaranteeing eligibility for community-based services for current CCP participants regardless of whether they qualify for services under the UAT. This will limit our ability to receive federal matching funds and potentially put our federal waiver at risk.
Therefore, pursuant to Section 9(b) of Article IV of the Illinois Constitution of 1970, I hereby return House Bill 1424, entitled AN ACT concerning public aid”, with the foregoing objections, vetoed in its entirety.
Sincerely,
Bruce Rauner
GOVERNOR
* From SEIU Healthcare Illinois Home Care Division and the Illinois Alliance for Retired Americans…
With today’s veto of House Bill 1424, Gov. Rauner has once again demonstrated his complete lack of empathy, compassion and concern for some of the most vulnerable in our communities. His veto of the bill continues the path of destruction to human services for children, seniors and people with disabilities launched when he first took office.
HB 1424 protected the 80,000 seniors in the Community Care Program from massive cuts, reductions in care, and a full-scale dismantling of the program by the governor. Instead of a successful program that has existed for years, the governor has proposed herding this group of seniors into an unproven and untested patchwork system that included subjecting seniors to Uber vouchers, food coupons and maid services.
Even more revealing of the governor’s contempt is his choice to veto the bill during the holiday season when citizens are celebrating and counting their blessing over the year. We, along with our allies who fight to protect seniors and the legislators who passed HB 1424, hoped that Rauner would see the light after the outcry from seniors over the proposed changes to the Community Care Program.
Unfortunately, Rauner is hellbent on moving an agenda that has done nothing but proven his failure as a leader.
* Pritzker campaign…
This past Friday, Bruce Rauner quietly vetoed a bill that protected 80,000 Illinoisans receiving in-home care through the Community Care Program.
Rauner’s veto of HB 1424 follows multiple attempts by the failed governor to dismantle the Community Care Program. This latest effort was carried out on the Friday between Christmas and New Year’s, as Rauner once again tried to hide his failure to protect Illinois seniors.
“While seniors were enjoying the holidays with family, Bruce Rauner tried to dismantle their ability to live with dignity and receive care in their homes,” said Pritzker campaign spokeswoman Jordan Abudayyeh. “Rauner closed out the year doing what he does best: undercutting the tools Illinoisans need to build better lives and avoiding transparency at all costs.”
…Adding… Sen. Daniel Biss…
“Gov. Rauner’s platform relies on attacking Middle Class and working families and his latest attempts to dismantle the Community Care Program remind us that even seniors aren’t immune from his right-wing ideological agenda. Unlike Gov. Rauner, I believe every Illinoisan deserves to age with dignity and security. That’s why I organized my Senate colleagues against Gov. Rauner’s proposed budget cuts and reductions in care and why I’m urging him to change course and sign HB 1424 today.”
…Adding… Chris Kennedy…
It’s no surprise that Governor Rauner vetoed HB 1424. He failed to appoint AARP or SEIU Healthcare members to the Community Care Program Services Task Force in an effort to silence advocates for our senior community so he could get away with starving the programs our seniors rely on to stay in their homes and access health care. Well, we cannot be silenced. We need our Democratic-controlled legislature to mobilize and lead an override of this veto. We cannot let Rauner continue to destroy government services and programs that ensure our most basic needs.
16 Comments
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Berrios claim rated “Mostly False”
Tuesday, Jan 2, 2018 - Posted by Rich Miller
* Politifact Illinois looks at a claim being made by Cook County Assessor Joe Berrios’ campaign…
In a recent cable TV ad, Cook County Assessor Joseph Berrios accused his Democratic primary opponent, Fritz Kaegi, of profiting from the private prison industry during his tenure as an investment analyst at Columbia Wanger Asset Management.
“Kaegi personally managed a fund that invested nearly $30 million in private prisons,” the ad stated. “Prisons where women refused food to protest abusive guards, immigrant children as young as 5 were held and detainees died suspiciously. But Kaegi only saw profits.” Berrios also aired a similarly worded radio ad. […]
Kaegi spent 13 years as an investment manager at Columbia Wanger Asset Management, where he oversaw the Columbia Acorn Fund with two other analysts. He gave up management duties of the fund and left Columbia Wanger on March 13 to begin his campaign. […]
Columbia Acorn Fund, of which Fritz Kaegi was one of three managers, reported $29.1 million in stock of the private prison operator CoreCivic on its March 31, 2017, quarterly report.
But Kaegi’s active management of the fund ended March 13, as documented in a Securities and Exchange Commission filing. Kaegi said the CoreCivic investment came after he was gone, and points to two years of quarterly reports and a Feb. 28 holdings summary to back his point.
We were unable to confirm from Kaegi’s co-managers, but a scenario in which Kaegi during his final two weeks as a fund manager decides to invest in a controversial private prison stock as a last act before challenging an opponent in a Democratic primary in Cook County borders on absurd.
Berrios’ statement contains an element of truth — the quarterly report on March 31 shows a $29.1 million investment in CoreCivic. But it ignores the critical fact that Kaegi didn’t manage the fund as of March 14 and that as recently Feb. 28 CoreCivic was not part of the portfolio. We rate it Mostly False.
…Adding… ILGOP…
2018 brings a new year, and J.B. Pritzker is hoping that taxpayers will forget about his corrupt ally, Cook County Assessor and Democratic party boss Joe Berrios.
For years, Berrios has faced accusations of nepotism, patronage, and corruption in his assessor’s office, costing homeowners dearly, particularly those in low-income minority communities.
Just last year, the Chicago Tribune and ProPublica Illinois released a multi-part report shedding light on the corrupt practices of Berrios and how he has rigged the Cook County property tax system to benefit his political cronies at everyone else’s expense. And weeks ago, Berrios faced renewed questions of patronage in his office.
But J.B. Pritzker doesn’t want to talk about his ally Joe Berrios because Pritzker is an integral part of Berrios’ and Madigan’s corrupt property tax racket.
When will Pritzker break his silence on Berrios?
* Related…
* Tribune Editorial: Berrios and ‘The Silence of the Dems’
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*** UPDATED x1 *** Where are they now?
Tuesday, Jan 2, 2018 - Posted by Rich Miller
* Politico…
Here is an overview of fundraising in the governor’s race as 2018 kicks off. Keep in mind the numbers reflect substantial self-donations from Republican incumbent Gov. Bruce Rauner and total self-funding from Democrat J.B. Pritzker. Democrat Chris Kennedy has donated $500,000 to his own account.
Fundraising totals, via Illinois Campaign for Political Reform […]
JB Pritzker: Cash on hand: $21.1 million Total Raised $42.2 million
Daniel Biss: Cash on hand: $2.9 million Total Raised $3.7 million
Chris Kennedy: Cash on hand: $1.8 million Total Raised $3.3 million
Robert A Daiber: Cash on hand: $33,021.91 Total Raised $108,877
Tio Hardiman: Cash on hand: $3,892.93 Total Raised $5,445
ICPR came up with its “cash on hand” numbers by adding filed fourth quarter A-1s to the campaigns’ third quarter bank balances.
But we can’t depend on those numbers for two reasons. First, we don’t know how many contributions haven’t been reported yet. Candidates don’t have to report their contributions until after they deposit the checks. Second, we don’t know how much the candidates spent during the fourth quarter.
So, while Sen. Biss reported raising about $263K in the fourth quarter, he spent $509K in the third quarter. Will he wind up with $2.9 million in the bank? Too early to tell, but that’s just about where he wants to be. Another million or so in the bank and he could do a decent four-week TV buy.
Kennedy has so far reported raising $488K in the fourth quarter. But he spent about $665K in the third quarter. Kennedy has held checks back until the last minute in previous quarters and may write himself another late check like he did in the third quarter, so we’ll see where he really is in a couple of weeks.
* Meanwhile…
…Adding… I forgot about this one…
Last week, Democratic candidate for attorney general state Rep. Scott Drury reported giving his campaign $170,000, a move that eliminates contribution limits for all candidates. Another candidate, Aaron Goldstein, put in $135,000 of his own money.
*** UPDATE *** ICPR…
Rich,
Thanks for your email today. It got us thinking about Cash on Hand numbers on our site. In order to avoid confusion and clarify this information, we are adding the following notice to every committee page:
*This figure represents a committee’s total available funds to spend this quarter. While committees are able to spend money continuously, they are only required to report spending figures once every three months. As soon as spending figures are available, they are reflected in the “Cash on Hand” amount for each candidate.
I also saw one of your commenters bring up the fact that the State Board of Elections does not retract A1s that are mistakenly filed by committees until quarterly reports come out. This is true, meaning that these A1s can remain in the dataset for some time.
I wanted to let you know that starting January 1st, we have actually implemented a manual review process that will catch these mistaken A1s for major races, when they constitute a significant amount. While it would be cost prohibitive for us to manually remove every mistakenly filed A1, we will be working to make sure major mistakes are removed on contested races for 2018.
As always, we appreciate when users and members of the media bring issues like this to our attention. Thanks again - just wanted to let you know that you sparked a good conversation for us!
Best,
Sarah Brune
Executive Director
Illinois Campaign for Political Reform
I’m glad they changed that because what they were claiming was “cash on hand” was not, in fact, cash on hand.
* Related…
* 2018 brings governor’s race, other big contests in Illinois
* Editorial: How to make regular folks’ $50 donations count in elections
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* BND…
A St. Clair County circuit judge’s ruling in a lawsuit could determine the financial health of Democratic-leaning labor unions that represent government workers.
Judge Chris Kolker issued the ruling Wednesday, vacating Gov. Bruce Rauner’s executive order to halt collection of union fees for nonunion members who work in state jobs but benefit from collective bargaining.
Kolker found that Rauner’s executive order violated state law, collective bargaining agreements and the Illinois Constitution. Kolker ruled that the governor was trying “to rewrite 26 collective bargaining agreements. This is expressly prohibited by state law.” […]
But the whole thing may be moot, pending a decision by the U.S. Supreme Court in another case.
That second case involves Mark Janus, a state employee who says Illinois law violates his free speech rights by requiring him to pay fees subsidizing a union he doesn’t support, the American Federation of State, County and Municipal Employees. About half the states have similar laws covering so-called “fair share” fees that cover bargaining costs for nonmembers. […]
Patty Schuh, a Rauner spokeswoman, said the governor had issued the executive order in the St. Clair County case “to protect the First Amendment rights of government workers and initiated what became the Janus vs. AFSCME case. The Supreme Court has agreed to hear the Janus case because of the First Amendment rights at stake. We look forward to the Supreme Court’s decision.”
Schuh added, “The governor supports the freedom for all government workers to choose what political speech to support and whether or not to take money out of their paychecks to pay dues to a union.”
The ruling is here.
*** UPDATE *** AFSCME…
Public service workers know that Bruce Rauner is fiercely hostile to working people, wants to take away their freedom to join together in strong unions, and is determined to drive down their wages. That was the motivation for his illegal executive order and for the suit he initiated that’s now before the US Supreme Court.
Members of AFSCME and all public service unions are organizing to make sure their co-workers and their communities understand Rauner’s scheme to rig the system, silence working people and take more power and control for himself.
44 Comments
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