* BGA…

The blind trust set up to manage Gov. J.B. Pritzker’s vast wealth bought stock in one of the state’s biggest Medicaid contractors in 2020, the same year his administration made several decisions that benefited the company’s bottom line.

The purchase of stock in health insurance giant Centene Corp. was made on behalf of the billionaire governor by trustees at Northern Trust, appointed by Pritzker to independently manage his portfolio to separate those investment decisions from his role as the state’s most powerful elected official.

The investment in Centene — which collected more than $2.6 billion from state Medicaid contracts in the first half of 2021 alone — demonstrates the pitfalls of a blind-trust arrangement that still leaves the nation’s richest governor open to potential conflicts of interest.

The acquisition by Pritzker’s trust came despite his campaign pledge to purge his personal portfolio of companies holding state contracts. He also promised, as governor-elect, to make charitable contributions matching gains in his trust’s holdings from entities that hold state contracts.

The issue of stock purchases by elected officials is now being debated in Congress, which is considering an array of strengthened stock disclosure laws aimed at stopping lawmakers from profiting from their access to insider information. The stock holdings of judges and federal banking officials also have come under scrutiny.

Experts interviewed by the Better Government Association say the governor could have avoided the potential conflict by instructing his trust managers to refrain from investing in state contractors. Pritzker’s spokespeople declined to say whether he ever considered doing so.

“I don’t see why a trustee couldn’t operate within those bounds — especially given that he seems to have acknowledged the potential of a conflict with his pledge” to divest of companies that hold state contracts, said Eleanor Eagan of the Center for Economic and Policy Research, based in Washington, D.C. […]

Experts interviewed by the BGA said there is a conflict of interest if the state has contracts with a company in which the governor’s trust holds stock.

“Absolutely,” said Eagan. “I don’t really see how one can argue otherwise.” […]

A BGA review of public records shows the purchase of Centene stock could have been made any time between Jan. 1, 2020, and Dec. 31, 2020. While the blind trust is designed to guard Pritzker from knowing when the investment in Centene was made, actions taken by his administration nevertheless benefitted the big health care company.

Starting in 2019 and continuing into 2020, Centene faced antitrust concerns during its $17 billion acquisition of Medicaid insurer Wellcare. The Pritzker administration helped Centene overcome federal antitrust scrutiny by reassigning thousands of Centene patients into other plans.

The state of Illinois also oversaw Centene’s June 2020 acquisition of state Medicaid contractor NextLevelHealth Partners. The transfer gave Centene a toehold in the lucrative Cook County Medicaid market.

You’d think in a long piece about an alleged conflict of interest there’d be some sort of disclosure that Ken Griffin, who is funding one of Pritzker’s opponents, is a major BGA contributor and was the recent beneficiary of a kissy-face profile by the BGA’s own president.

* Full statement from Pritzker attorney Marc Elias to the BGA…

As the documents we’ve provided outline, Governor Pritzker did not personally make any investments, nor was he involved in any discussions at any time regarding any investments. His blind trust is just that: blind. He receives no information regarding potential investments and does not receive monthly or quarterly reporting that would outline what investments he has or their worth. The only information he receives is a ready-to-file Statement of Economic Interest which contains no values. He has no knowledge of the trust’s current assets. To suggest otherwise is not only inaccurate, but potentially libelous.

Oof.

* Full statement from the Pritzker campaign to the BGA…

This story completely mischaracterizes Governor Pritzker’s blind trust and his alleged role in any investment. As we have said numerous times and is made clear in the documents prepared by the attorneys, Governor Pritzker’s trust is blind. This means he is not a part of any decisions nor does he have any information regarding any investments. He receives no regular reporting on what the trustees and investment advisors decide to purchase and plays no role in any investment decisions. Period. Any reporting that would suggest otherwise ignores critical facts and would be grossly inaccurate.

* Anyway, the ILGOP seemed ready with some pointed questions for the governor…

Questions That Need Answering

· Why didn’t the Governor avoid this conflict of interest by simply telling his trust managers to refrain from investing in state contractors?
· When was the stock in Centene originally purchased and how much has Pritzker profited from the investment?
· Will the Governor release all correspondence and documents relating to Centene since he became governor?

* Response to the ILGOP at my request from Natalie Edelstein at the Pritzker campaign…

The Governor does not communicate with the trust managers and only receives his Statement of Economic Interest, which lists the assets, to sign annually in order to fulfill his obligation under Illinois law.

Emphasis in original.

I have asked both the Pritzker campaign and the governor’s office if Pritzker has followed through on his pledge to contribute matching amounts to charity whatever his trust gains from entities that hold state contracts. I’ll let you know if I hear back, but gains occur when stocks are sold, so I dunno if an answer is yet possible.

* Richard Irvin hasn’t yet put out a statement about an hour after the BGA unveiled its story (it was in my spam folder)…

It’s pretty clear the Governor’s blind trust can see perfectly well, and the people of Illinois deserve to know the extent of Pritzker’s personal financial benefit off one of the largest state contracts. This story continues to raise serious concerns not only of the governor’s judgment but also his continued enabling of the same kind of Madigan corruption that’s been plaguing this state for decades.

* Two others on the Griffin slate also put out a statement. AG candidate Steve Kim…

“Now we see why JB Pritzker and Kwame Raoul have kept up this needless crusade on masks in schools: to call attention away from Pritzker’s own potential conflict of interest,” Attorney General Candidate Steve Kim said in a statement. “I want to fight for Illinois and do everything that we can so that everyone in this state knows their leaders are working for them, not for themselves. As Attorney General, I will work to root out this Madigan-style corruption that has permeated this state for decades.”

That’s a stretch.

* Former US Attorney John Milhiser…

“These are the kinds of corrupt practices that have made Illinois families so distrustful of the current state of our government,” Secretary of State candidate John Milhiser said in response to this news. “We need to put leaders with a record of fighting corruption in state government so that we can root out practices like these and take action to end the exodus of people from our state who are disgusted with the way the career Pritzker-Madigan politicians do business.”

* Also from Natalie Edelstein at the Pritzker campaign…

Today’s story by the BGA ignores and misstates critical details and completely mischaracterizes Governor Pritzker’s blind trust. Despite multiple attempts at clarifying that the Governor has no role in any investment decisions and only receives the information required by Illinois law to file his Statement of Economic Interest—which the BGA’s own article acknowledges––the BGA nonetheless knowingly misrepresented the facts.

Governor Pritzker did divest his personal portfolio of companies holding state contracts and then removed himself from all investment decisions. To suggest he broke “his campaign pledge” is false. The trustees provide Governor Pritzker only with an annual report of his assets, which contains no values, in order to sign his Statement of Economic Interests pursuant to the Illinois Governmental Ethics Act. The BGA is suggesting that because the governor is following the law, he is doing something wrong. Most assuredly if the governor did not file a Statement of Economic Interests, the BGA would be writing about how he was violating the law.

The story also misleadingly attempts to connect the Governor to a current debate in Congress over barring federal elected officials from making stock purchases. What the story fails to note is that this effort is being undertaken because members of Congress are personally engaged in trading stock, which Governor Pritzker is not. Governor Pritzker does not personally make any investments, nor has he been involved in any discussions at any time regarding any investments since taking office.

While we are gratified that the BGA has admitted that Governor Pritzker has no involvement in investment decisions, it is unfortunate that despite several good faith discussions with the BGA, they pursued a story that is not based in fact, but rather speculation. We’ve come to accept this type of reporting as the norm from this outlet-–an organization that has accepted hundreds of thousands of dollars from Ken Griffin, most recently accepting $100,000 from him in their latest tax filing, and did not disclose this relationship when the organization’s President and CEO wrote a story revealing Mr. Griffin’s endorsement in the Republican primary for Governor.

* Jordan Abudayyeh sent along this email back and forth with a BGA reporter…

Q: After Gov. became aware in April 2021 that his trust owned Centene stock, did he take any steps to recuse himself from decisions and actions pertaining to Centene or to Medicaid?

A: Centene was initially chosen as a provider during the prior administration in 2018. Since then, any contract renewals have been handled exclusively at the agency level. The Governor is not involved in the contracting process relating to Centene or in any contract management. Since the Governor is not involved, there is nothing he would have to recuse himself from.

We are reporting that JB ran for office in 2018 by criticizing former Gov. Bruce Rauner for being slow to recoup millions of dollars in profits taken by Centene and other Illinois Medicaid contractors: “While costs skyrocket for his secret Medicaid overhaul, Bruce Rauner is negligent in recouping tens of millions of dollars in overpayments to insurers,” Pritzker said in a March 2018 press release. “Incredible sums of taxpayer dollars are falling through the cracks, and there’s no one in charge to stand up for hardworking Illinoisans.”

We have previously spoken with you for our article showing Gov. Pritzker in 2020 worked to quash a proposed bill by Democrat State Senator Dave Koehler that aimed to “claw back” COVID-era profits from Medicaid contractors including Centene.

Would you consider that a fair and accurate summary?

This summary is not accurate. Here is why:

• First, existing law provides the authority for the state to claw back excessive profits. Through HFS’ Medical Loss Ratio guarantee, MCOs are contractually prohibited from making excessive profits. Under the MLR, at least 85% of MCO funding is required to go back to medical expenses. Furthermore, the department increased that to 88% as a result of the pandemic to prevent the “windfalls” the legislation you reference was attempting to target. Anything over that is “clawed back.” The 12% “profit” also covers operational and administrative expenses so you’re looking at a theoretical 2-3% profit margin for MCOs on average.

o As a result of the Medical Loss Ratio, HFS is currently estimating the department will recoup approximately $220 million from the MCOs in 2020. This will take place after the 18-month bill cycle for 2020 concludes later this year.

o The Medical Loss Ratio guarantee existed during the Rauner administration as well, but they failed to exercise this authority – as documented by the Auditor General. To quote an article from the time, “In one finding, Healthcare and Family Services left $65 million on the table from 2013 to 2015 by not collecting so-called medical-loss ratio refunds, or money owed the state because the MCO didn’t meet the percentage of direct-care costs it promised.”

• The legislation you are referencing would have violated federal requirements and put tens of millions of dollars of federal funding at risk – raising costs for Illinois taxpayers. It would have failed to provide a true accounting of MCO profits, which are calculated based on a full claims process that takes place over an 18-month period. An interim snapshot provides an inaccurate picture.

• To further illustrate the degree to which this approach runs counter to responsible accounting, while most MCOs appeared to be profiting at higher rates in earlier phases of the pandemic, since that time those profits have significantly decreased

*** UPDATE *** A bit of tit for tat oppo, perhaps? WBEZ…

With Chicago-area homicides, carjackings and expressway shootings all up in 2021, billionaire investment tycoon Kenneth Griffin minced no words last fall when he singled out one man, Democratic Gov. JB Pritzker, for not confronting the crime scourge terrorizing the region.

But while Griffin was deriding Pritzker’s response as a “disgrace,” Griffin’s $46 billion hedge fund — Citadel — and its corporate cousin had investments and holdings in gun and ammunition manufacturing companies, federal securities records show.

In fact, Chicago police data analyzed by WBEZ show that nearly one out of every four guns recovered from city homicides in the past five years came off the assembly lines of companies in which Citadel held shares — weapons that have played a role in the same, worsening crime wave that Griffin blames on the governor.

Griffin’s activism and bank account are shaping the Illinois Republican Party in this year’s election cycle as the GOP looks for big gains in Springfield. Griffin and his favored gubernatorial candidate, Aurora Mayor Richard Irvin, are focusing on crime as a defining issue to deprive the Democratic governor of a second term. […]

“These investments make up less than .01% of our portfolio,” Citadel spokesperson Zia Ahmed said, calling any links between the companies’ positions and violent crime in Chicago “quite a stretch.”

2022 fall election preview: The Irvin campaign will slam Pritzker for things like a shaky claim of conflict of interest while the Pritzker people will try to claim on the slimmest of evidence that Irvin is bankrolled by a guy whose investments are flooding the streets with guns.