* Bernie Schoenburg interviewed Bruce Rauner about clouting his kid into Payton Prep back in September. Bernie asked if Rauner called then CEO of Chicago Public Schools Arne Duncan about his suburban daughter’s application to the Chicago public school…
Well, that’s not what was being reported in various media outlets this week. Rauner did a round of interviews, including talking to ABC, NBC and CBS stations in Chicago, to explain himself on Monday — the day that Sun-Times story hit the streets. All three stations reported that Rauner called Duncan.
Jay Levine of CBS-Channel 2 said in his story: “Rauner admits making a call to Arne Duncan to get his daughter into Payton despite what he calls her middle school attendance record marred by illness.” […]
Mary Ann Ahern, in her story on NBC-Channel 5, said: “Bruce Rauner says yes, he made a phone call to then-Superintendent of Schools Arne Duncan, so his daughter, moving into the city from Winnetka, could get into Walter Payton College Prep.” […]
And CHARLES THOMAS of ABC-Channel 7 reported: “When his daughter’s application was rejected, Rauner admitted calling then-CPS CEO Arne Duncan to get her admitted to Payton, which had a waiting list of over 7,000 city teenagers.” […]
Rauner spokesman MIKE SCHRIMPF said this week that when Rauner told me in September he hadn’t talked with Duncan, it was because of how Rauner interpreted my query.
“They didn’t ask for him to put her into the school,” Schrimpf said of Rauner and his wife, Diana, “which I think is what the thrust of your question was.”
How can Mr. Rauner be trusted to clean up corrupt Springfield when he won’t fully explain how and why Mr. Levine made $25,000 a month trying to get government business for a company owned in part by Mr. Rauner?
As I reported last March, Mr. Rauner made his fortune as a principal in GTCR LLC, the big Chicago private-equity business. In fact, as my colleague Lynne Marek later reported, Mr. Rauner was the key “people person” in the firm, the guy who made the calls to potential clients trying to sign them up. And many of those big clients were pension funds, like the giant Teachers Retirement System of Illinois, which covers just about every public-school teacher in the state outside of Chicago.
That’s why my eyebrows went up when I discovered that in 2003, TRS initially turned down a request from GTCR to handle $50 million in its pension investments. The decision was reversed at the next TRS meeting, after Mr. Rauner personally showed up to make a pitch. And among those who voted to give the firm the $50 million was TRS board member Mr. Levine, whose legal problems hadn’t surfaced yet but who had objected at the first meeting to GTCR’s request.
Nowhere in the minutes of those meetings — and I’ve checked them for both the February 2003 meeting and for the May 2003 meeting — is a pretty pertinent fact disclosed: Mr. Levine at the time was getting $25,000 a month from a medical-bill processing company named CompBenefits that, a few years earlier, had been acquired by GTCR and three other investment companies. In other words, Mr. Rauner was seeking a favor from a guy whose bread was being very well-buttered, in part, by Mr. Rauner’s company.
* Rauner does, indeed, need to answer for this. But I checked with TRS executive director Jon Bauman about his recollections of those two meetings. Rauner claims he’s never met Levine, so I wanted to know if there was any interaction between the two men. His e-mailed reply…
They were both present at the meeting in May 2003 when GTCR got a do-over following a bad presentation at the prior meeting (I think Feb. 2003.) At that meeting, one of Rauner’s partners, a guy named Dave Donnini, showed up solo. We always encouraged money managers presenting to the Board to bring two people in case one screws up, has a bad day, or whatever. They didn’t, the presentation didn’t go well, and both Levine and John Glennon really bashed this guy’s head in. The Board almost voted it down but on the recommendation of the outside investment consultant, postponed action.
In May, Rauner came in with maybe 3 other guys and a clearly well-polished presentation. I don’t recall any controversy and few questions and the Board unanimously voted to approve the Fund.
To the Question, I don’t remember them interacting beyond a handshake or the like at that second meeting. I can tell you unequivocally that Levine never said anything to me about Rauner. He said he objected the first time because the guy was so bad and acted like the Board was a rubber stamp, in so many words.
So, maybe there’s not much “there” there, but Rauner still needs to answer questions.
Trading units of ConvergEx Group, a brokerage firm for big investors, agreed to pay more than $107 million to settle charges brought by U.S. authorities related to overcharging customers when the firm carried out their trades.
The units also agreed to admit wrongdoing, as did former employees Jonathan Daspin and Thomas Lekargeren.
Additionally, the U.S. Justice Department announced criminal charges against Messrs. Daspin and Lekargeren as well as ConvergeEx Group and a brokerage subsidiary. ConvergEx agreed to pay $43.8 million in penalties and restitution to settle those charges.
The Securities and Exchange Commission, which charged the firm with fraud, said the firms used a system that made customers “unknowingly pay more than double what they understood they were paying to have their orders executed.”
In a statement, ConvergEx said the employees were no longer with the company and that the Bermuda trading desk at the center of the alleged fraud has been shut down, while the activity in question was discontinued two years ago. […]
ConvergEx has faced volatility on other fronts, too. In 2011, a deal to sell itself to CVC Capital Partners, a private-equity firm, fell apart. The next year it managed to sell its Eze Castle Software and RealTick businesses to TPG Capital, another private-equity company, in a deal valued at $1.9 billion. In June it withdrew plans to issue stock to the public but didn’t comment on its decision.
* So how does this matter? Well, that 2011 deal which fell apart was announced thusly…
GTCR, a leading private equity firm, today announced it has entered into a definitive agreement to sell its portfolio company, ConvergEx Group (“ConvergEx”), to funds advised by CVC Capital Partners (“CVC”). The transaction is an all cash transaction expected to close in the fall following receipt of financing and customary regulatory approvals. ConvergEx is a leading technology company offering software products and technology-enabled services to hedge funds, traditional asset managers, broker-dealers, corporations and plan sponsors. […]
“I’d like to thank GTCR for their unwavering support in helping ConvergEx become an industry-leading company. They have been a true partner,” said Mr. Velli. “We have had a fantastic period of growth with GTCR and look forward to working with CVC as we continue to execute our growth strategy and build out our capabilities to provide unique technologies that today’s marketplace requires.”
Sorenson Communications, an Internet-based Telecommunications Relay Service (TRS) provider, has agreed to pay $15.75 million to settle an investigation by the Federal Communications Commission’s Enforcement Bureau into whether the company billed the TRS Fund for calls made by unregistered, unverified, or ineligible individuals, and for calls that were made by or on behalf of the provider itself.
In case you aren’t aware of it, the Telecommunications Relay Service provides services to people who are deaf, hard of hearing, deaf-blind, or who have a speech disability to communicate via the telephone.
Stung by a fortnight of miserable headlines, GOP gubernatorial hopeful Bruce Rauner is calling in some major media-relations reinforcements.
Joining Mr. Rauner’s communications shop effective next week will be Lance Trover, a longtime veteran of Illinois politics who most recently has worked for U.S. Sen. Mark Kirk, R-Ill., the state’s ranking Republican.
In a brief heads-up phone call late yesterday, Mr. Trover wouldn’t say much but insisted that his “leave of absence” to work for Mr. Rauner is not an indication of where Mr. Kirk stands. “The senator has made it clear he’s not endorsing” in the race among Mr. Rauner, Illinois Treasurer Dan Rutherford and state Sens. Bill Brady and Kirk Dillard, he said.
Trover would be the second Mark Kirk staffer to join the campaign. This is no coincidence.
