Press Conference:
Tuesday, March 19 at 11am
University Club, 76 E. Monroe, Chicago, IL 60603
MEDIA ADVISORY
Andrzejewski to Make Major Announcement
Tomorrow, March 19th, Businessman and Civic Advocate, Adam Andrzejewski will make a major announcement regarding the future of Illinois…
Andrzejewski is Founder of For the Good of Illinois- a nonprofit nationally leading transparency organization. Andrzejewski sought the 2010 GOP nomination for Governor of Illinois.
WHERE: University Club of Chicago, Millennium Room, 76 E. Monroe St, Chicago, IL 60603
Note: The University Club requests that no jeans or tennis shoes be worn. Gentlemen need jackets.
Looking forward to seeing you!
Adam Andrzejewski
For The Good of Illinois | CEO
As subscribers have known for a while, Andrzejewski has been talking about running for state treasurer. If you’re going, gentlemen, don’t forget your jackets. Kind of a weird setting for a statewide announcement.
Andrzejewski, who founded and heads up the transparency group “For the Good of Illinois” was in Washington DC this week, but told Illinois Review that despite the DC meetings, he’s not contemplating a bid for Congress in 2014.
“I’ve been redistricted out of Judy Biggert’s old district, so I’m not running for Congress,” he said.
What about a statewide position then? “I’ve also already said that I’m not running for governor,” Andrzejewski said.
When asked about state comptroller or treasurer - something many speculate he would be interested in - he hesitated. “Well, there’s a problem there, neither Topinka nor Rutherford have officially announced their intentions for 2014,” he said.
Last week, Andrzejewski announced the formation of a federal version of “For the Good of Illinois” to pursue transparency in federal spending and the national budget. Whatever office Andrzejewski intends to pursue, it’s fairly certain open government will be a part of his campaign platform.
* Many of the existing casinos want this new online gaming provision stuck inside the gaming expansion bill. Yes, it’ll cost them each $20 million up front, but the profits could be huge…
The debate over gambling in Illinois is expanding, from the well-worn arguments over new casinos and slots at Arlington Park to now whether every of-age Illinoisan should be allowed to gamble over the Internet.
Internet gambling could bring blackjack and craps to anyone who wants it, taking advantage of smartphone apps and an increasingly connected culture to let people play at any time or place. […]
This time, Internet gambling has been added to Link’s legislation. Under the plan, Illinois casino or track owners could operate gambling websites in addition to their traditional operations, and the new money they’d produce for the state largely would go toward paying down Illinois’s massive pension debt.
Only Illinoisans over 21 years old could play on Illinois sites, and an online gambling license would cost a casino owner $20 million up front.
* Meanwhile, Illinois Lottery Superintendent Michael Jones is under fire again…
Then there’s Chicago-based Independent Gaming Research, which used to be named Independent Lottery Research and used to be co-run by Mr. Jones until he divested his interest when he became lottery chief.
Internal memos I’ve obtained from a source who does not want to be named indicate that Mr. Jones persuaded Northstar to hire ILR as a contractor just a month after he took the job. But the lottery reversed the decision amid concerns over the ethical appearance thereof. I’m also told—by Mr. Jones and others—that Northstar since has hired ILR/IGR for considerable work in Illinois.
Mr. Jones says the state was getting bad research from other vendors, so he pushed for a replacement he knew and trusted. When Northstar raised the ethical concerns, he says he backed off. And he cheerfully concedes to promoting “a local company” to other lottery directors around the world. “I want a Chicago company to do well.”
Mr. Jones charges that all of this dirty laundry is coming from Gtech, which declines to comment. He says Gtech is the real reason the state’s ballyhooed move to sell lottery tickets on the Internet has flopped, with sales only recently hitting $100,000 a week. “The Internet portal they had was not intuitive . . . (it was) too difficult for customers to maneuver.”
Steve McMichael got some help from his old coach when Mike Ditka endorsed him for mayor of Romeoville Friday night.
Ditka wasn’t the only Bears legend to give McMichael a boost. Dan Hampton, Gary Fencik and Matt Suhey were there too.
McMichael is challenging incumbent Romeoville Mayor John Noak in the April 9th election.
* The Question: Are you watching any other municipal races? Explain.
The reason I’m asking is that I may poll some local races this month and am curious to see if there are any hotspots beyond what I’m already looking at. Thanks.
* The SJ-R story, entitled “Legislature ignores proposal for photo on benefit cards,” begins…
Illinois this year again is unlikely to require photo identification on food-stamp cards.
State Sen. Chapin Rose, R-Mahomet, thinks that’s a mistake.
The blue, debit-like Link cards used in place of food stamps are issued to low-income families to buy food through a joint federal-state initiative called the Supplemental Nutrition Assistance Program. Chapin believes some people abuse those benefits.
“The going rate for Link card benefits in my neighborhood is 50 cents on the dollar. People are selling their Link cards for cash — or worse — drugs,” Rose said. “That’s my constituents’ tax dollars being wasted. Handing a drug addict a couple hundred bucks a week to buy smack doesn’t help them, either.”
If Link cards included photos, unauthorized users wouldn’t make it past the checkout line, Rose said.
* The story is 761 words long. During which, we see why the Illinois Retail Merchants Association is opposed (longer lines and federal requirements that everybody be carded, including debit card users, if they checked IDs for Link customers) and why the photo is no panacea (caregivers’ photos wouldn’t be on the cards, so that’d be a huge problem).
And then, at the very end, after the byline contact info, is this…
Illinois would be first
New York City, Minnesota, and most recently, Maine, have applied for waivers to allow for photos to be used on public-aid cards. All have been rejected by the U.S. Department of Agriculture. No states currently use photo IDs on Link cards.
In other words, even if Rose’s bill passed, the state would still not get permission from the federal government. Thanks for telling me after the end of the story.
* Hopefully, this appointment will get around the Senate’s notorious gridlock since it was a bipartisan pick…
Fox 32 News has learned tonight that the White House has decided to nominate former federal prosecutor Zachary Fardon to serve as the next U.S. Attorney in the Northern District of Illinois. Fardon was one of four finalists originally under consideration by the White House to replace Patrick Fitzgerald.
There’s been no public announcement yet from the White House.
Fardon is one of two finalists who the White House has been considering for several weeks. The other is Chicago attorney Lori Lightfoot.
The candidates’ names were submitted by Illinois Senators Dick Durbin and Mark Kirk to the White House.
Among other things, Fardon helped prosecute George Ryan.
Zach Fardon chairs Latham’s Litigation Department in Chicago. Mr. Fardon’s practice focuses on internal investigations, government investigations, white collar defense and complex business litigation. He is a trial lawyer who has tried numerous cases, both as a federal prosecutor and a defense lawyer, including cases involving charges of financial fraud, tax crimes, money laundering, corruption, racketeering and conspiracy. He has also briefed and argued appeals before the federal circuit courts.
Mr. Fardon routinely handles high-profile and sensitive matters for his clients. He has extensive experience helping clients navigate legal investigations and litigation that also require crisis management and media expertise. Mr. Fardon has conducted numerous internal investigations for private and public companies and has defended companies and individuals in connection with Justice Department and regulatory investigations.
Federal Election Commission records showed Fardon, an Evanston resident, donated $2,000 to the Democratic primary Senate campaign of attorney David Hoffman, who lost his 2010 primary bid to Alexi Giannoulias.
Quinn said $43 billion the state is spending on the Illinois Jobs Now! public-works program and the Move Illinois toll way construction project are “supporting more than half a million jobs.”
Anderson, his spokeswoman, said 439,000 jobs would be created over the next six years through the $31 billion Illinois Jobs Now! project, plus 130,000 construction jobs and 120,000 permanent jobs courtesy of the $12 billion toll way project. That’s a combined 689,000 jobs. […]
The state actually has 5.78 million non-farm jobs, according to the state Department of Employment Security. So 689,000 jobs actually would be more than 10 percent of all jobs in the state.
For comparison, Illinois’ construction sector currently employs 185,000
So, the Quinn administration is claiming that almost all the construction jobs in the state were created by some Tollway work?
* I kid you not. From today’s editorial about pension reform…
One caveat on Biss’ bill: It includes unfortunate language that would put the state on the hook for regular payments into the pension funds as a contractual obligation. That’s a worthy commitment, but also one stronger and more enforceable than what’s now in state law. Which makes it a precarious requirement that we hope the House will eliminate. Why so?
Just like the unpredictability of the markets, fluctuations in the economy or unanticipated but severe emergencies between now and 2045 may force the state to devote extra resources to priorities other than pensions. The state must keep the flexibility to make those choices — not tie its own hands.
We realize that lawmakers’ failure to make required contributions into the pension system is a big part of how we got here. But we also got here because the state overpromised what it could afford and routinely sweetened pension benefits. Going forward, lawmakers have to be relentlessly disciplined in making required, actuarially determined payments into the pension funds. They can do that without stripping themselves of authority and flexibility.
The pension sweeteners are just a tiny portion of the state’s current problems. As noted here many, many times, including earlier today, the real problem has been the deliberate funding neglect.
For the Tribune to now argue for funding flexibility is just insane, and shows how little that editorial board actually knows about how we got here.
“Pardon me,” said Ty Fahner to a nearby microphone that he accidentally bumped into during his testimony last week before the Illinois Senate Executive Committee.
Fahner could probably be excused for apologizing to an inanimate object. The president of the Civic Committee of the Commercial Club of Chicago and self-styled pension expert had been forced to wait for hours in the hearing room before testifying against Senate President John Cullerton’s pension reform bill.
Cullerton (D-Chicago) was obviously furious with Fahner for helping organize the opposition to his bill, and he grilled the former Illinois attorney general mercilessly — tag-teaming with Senate President Pro Tem Don Harmon (D-Oak Park), who picked apart the hostile witness piece by piece.
Fahner tried to remain calm during his appearance, but apologizing to the mic showed how much he was rattled.
A day earlier, word went around that business leaders had been calling and emailing Republicans to pressure them to vote against Cullerton’s proposal. Even an apparent Republican gubernatorial candidate, venture capitalist Bruce Rauner, got into the act.
As a result, Cullerton’s top priority for the legislative session, the passage of Senate Bill 1, was derailed when Republicans began jumping ship.
Cullerton’s bill combines the Nekritz/Cross pension reform plan with his own. The Nekritz/Cross measure, introduced by state Rep. Elaine Nekritz (D-Northbrook) and House Minority Leader Tom Cross (R-Oswego), allows annual cost-of-living adjustments for retirees only on the first $25,000 of pension income, caps the salary on which a pension can be based and provides for a funding guarantee by allowing the state’s five pension systems to sue the state for not making payments to their funds.
The other half of Cullerton’s bill includes his reform language, which Cullerton insists is the only constitutional way forward. That language would take effect only if the Nekritz/Cross provisions are struck down as unconstitutional.
Cullerton’s bill relies on a legal concept known as “consideration.” Essentially, it means that people have to be offered a choice before the state can get out of its constitutionally mandated contractual responsibilities.
Cullerton would force retirees to choose between receiving annual cost-of-living raises or having the state pay for their medical insurance.
The business types, including Fahner and Rauner, believe Cullerton’s bill does not save the state nearly enough money in pension costs over the long term. The Nekritz/Cross bill is expected to save several times more.
The business leaders also say that guaranteeing that retirees get government-paid health insurance in exchange for giving up their cost-of-living raises would declare that health insurance is a contractual pension obligation protected by the Illinois Constitution. And that, they say, would lead to much higher costs down the road.
“Bruce opposes SB 1 because while it fixes one small piece of the pension crisis, it takes away key future negotiating leverage by contractually guaranteeing future government contributions,” said a spokesperson for Rauner. “The bill, however well-intentioned, gives away too much while not getting enough in return.”
Rauner has become somewhat infamous in Springfield the last several months for his regular email harangues against Cross, Senate Minority Leader Christine Radogno (R-Lemont) and other Republicans. His vast fortune and potential run for governor next year have forced those leaders to pay attention.
There is more behind this opposition, however. Many in the business community believe that by putting both pension reform concepts into a single bill, the General Assembly would enable judges to declare the Nekritz/Cross plan as unconstitutional.
Even the most generous explanation of the Nekritz/Cross plan doesn’t come close to explaining how it complies with the state Constitution’s declaration that pension benefits are an “enforceable contractual relationship” and that benefits “shall not be diminished or impaired.”
The reasoning of the business groups is that giving judges a choice between a plan that makes almost no pretensions of being constitutional and one that at least tries to pass muster (Cullerton’s) would lead to Nekritz/Cross being struck down.
So, now what?
Fahner is the same guy who said in November that the pension crisis “has grown so severe that it is now unfixable.” He later backed away from that remark, explaining that he meant the issue had become politically unfixable.
But he and Rauner and their cohorts have now helped kill off what had been a politically viable plan, at least in the Senate.
In hindsight, the pension problems began during the Jim Edgar administration, when a 1994 law was approved to have pensions funded at the 90 percent level within 50 years.
They’re kidding, right? The pension problems “began” in 1994?
* Look, there’s no doubt that Edgar’s pension ramp plan was flawed. I’ve been saying so for years. It seriously backloaded payments and burdened future generations instead of tackling the issue head-on.
But can anyone say for certain that if Edgar’s ramp had not been passed that we would be better off today? Does anyone seriously believe that the unfunded liability would be lower today if not for the ramp?
Anyone?
Bueller?
* The state’s pension problems date back to at least the 1940s. The underfunding problem had gotten so bad that by the time the state constitutional convention convened in 1969, delegates decided to scare the pants off legislators by making pensions an unbreakable contract.
But even that didn’t work. It wasn’t until Edgar decided to force the issue that something was done. Yes, they kicked the can down the road, but they did do something.
* On that same topic, this claim in a column is nonsense…
On Monday, the U.S. Securities and Exchange Commission, or SEC, investigation charged the state of Illinois with fraud.
Here is what it had to say:
“… that Illinois failed to inform investors about the impact of problems with its pension funding schedule as the state offered and sold more than $2.2 billion worth of municipal bonds from 2005 to early 2009. Illinois failed to disclose that its statutory plan significantly underfunded the state’s pension obligations and increased the risk to its overall financial condition. The state also misled investors about the effect of changes to its statutory plan.”
That’s lawyer-speak for “the Edgar Ramp fell well short of the mark.”
Oh, please. It’s actually “lawyer-speak” for “Rod Blagojevich’s administration lied.”
The SEC report says the underfunding mess dates back to a protracted payback plan put forth in 1994 by then-Gov. Jim Edgar. It was compounded exponentially by pension holidays given under ex-Gov. Blagojevich. What [House Speaker Michael Madigan] didn’t say, is that he helped to lead the Legislatures which signed off on those pension holidays.
The first sentence is woefully inadequate, but the rest is spot on, including Madigan’s culpability.
That [Edgar pension payment ramp] legislation, which took effect in 1995, passed both chambers of the Legislature unanimously, drew no opposition from unions and had backing from business groups and newspaper editorial boards. It set out an escalating schedule that required gradual pension payments of as little as $500 million at first but a much steeper ramp-up after 15 years. By 2009, the state paid $2.4 billion toward its pension tab, and next year that obligation will reach a staggering $6.7 billion.
Yes, the ramp was flawed, but at least there was something on the books that hasn’t been totally ignored.
* This section of the recent SEC fraud report is the reason why the law was flawed, but also contains some information that is almost always conveniently ignored by newspaper editorial writers, particularly at the Tribune…
“Rather than controlling the state’s growing pension burden, [the law’s] contribution schedule increased the unfunded liability, underfunded the state’s pension obligations and deferred pension funding,” the SEC wrote. “This resulting underfunding of the pension systems … enabled the state to shift the burden associated with its pension costs to the future and, as a result, created significant financial stress and risks for the state.”
The contribution schedule purposely increased the unfunded liability.
So, when anybody bemoans the pension systems’ unfunded liability, they ought to remember that it was a feature, not a bug of the Edgar plan. It was, however, made far worse by Blagojevich and everybody else who backed the pension holidays.
“I’m sure if we’d have been opposed to it, maybe there would have been 10 or 20 votes against it,” said Henry Bayer, AFSCME Council 31’s executive director. “If it didn’t pass, it wasn’t like there was an alternative bill that would have made things better. If it didn’t pass, we’d still have what we had. There would have been no contribution or what they’d decide to put in every year, which would have been even less.”
* Keep in mind that the Art Institute, Field Museum, CSO and Adler Planetarium [fixed link] boards are all comprised of Chicago’s elite, many of whom are now deriding public employees and demanding that the state cut pensions. From the Tribune…
Borrowing and spending on the assumption that more money and visitors would follow was not the only financial risk many cultural institutions took. They also put off pension payments and borrowed at unpredictable interest rates.
Those choices allowed museums and arts organizations to pay less up front but ended up costing them more in the long run. It also made it harder to restructure their debts when times got tough. […]
In the robust early-2000s market, pension plans were flush and some institutions refrained from contributing to avoid over-funding, which is allowed under federal law. When the market weakened and interest rates fell, funding levels dropped. Yet the boards of many major cultural institutions continued to approve the skipping of annual pension payments.
The Art Institute, Field Museum, CSO and Adler Planetarium all elected not to make pension payments for several years at a time in the early 2000s, even as funding levels slipped. Now all of them have either frozen plans, closed them to new employees or increased retirement ages. [Emphasis added.]
Cloonen is wearing the jacket and the hat because she’s a freshman presenting her first bill. The jacket is a “tradition” for first bills. The stovepipe hat was added this year.
* Illinois’ bad credit rating is now hurting Chicago’s rating. Moody’s just lowered the rating on the city’s motor fuel tax borrowing and assigned it a negative outlook…
“Debt service on the motor fuel tax bonds of the city of Chicago is secured by a senor lien pledge of a portion of the city’s allocation of state motor fuel tax revenues,” Moody’s said in a statement. “With legislative approval, the state has the authority to reduce pledged revenues by reducing . . . motor fuel tax revenues to the city.”
The “risk of non-appropriation” of the state money to Chicago exists as the state struggles to raise cash for its own needs, Moody’s added, implying that the risk that the state will keep the money rather than pass it along to Chicago actually is growing.
Moody’s also cited the state’s declining credit rating and reduced revenues from per-gallon state taxes on gasoline, which have dropped as the price of gas has risen. […]
“Assignment of the negative outlook (on the motor fuel debt) is in keeping with the negative outlook assigned to the state’s general obligation debt,” Moody’s concluded.
The former governor’s lawyers have until mid-April to file an appellate brief. There are already rumblings that the defense may ask for an extension. Sorosky says the case is complex and an appeal could focus on a series of rulings by U.S. District Judge James Zagel, with lawyers arguing his decisions blocked them from presenting their full defense.
Don’t be surprised, however, if Blagojevich churns out another book or soon breaks his silence in his typical spectacular fashion.
* The Question: The name of Blagojevich’s new book should be… ?
The big finish, though, was an impassioned, hour-long speech by former Gov. Jim Thompson. He took Biss’ plea a step further: “I agree with Sen. Biss that we have to stop demonizing public employees. Without the public employees we wouldn’t enjoy the life we do in the state of Illinois. We would not have the education of our children and grandchildren in the state of Illinois. We would not have a decent business climate in the state of Illinois without good, honest, hard-working public employees.. We have to get away from the idea that they are the enemy. They are not the enemy. We need to make them our allies.
“And I’ll add one more: We need to stop demonizing unions. You can disagree with AFSCME, you can disagree with the teachers, you can disagree with other public employee unions without demonizing unions as some who want to be governor are wont to do.” Thompson said.
The last line probably was intended for Chicago businessman Bruce Rauner, the first candidate to officially enter the 2014 gubernatorial race and who has been an outspoken critics of public employee unions.
Probably? Heh. Rauner just got schooled. Not that he’ll care or anything. He’s the, um, “outsider,” remember?
Thompson was endorsed by AFSCME in his last campaign against Adlai Stevenson.
* But Thompson does agree with Rauner and Ty Fahner that Cullerton’s hybrid pension reform bill shouldn’t be adopted…
Thompson was critical of a bill backed by Senate President John Cullerton that combines two reform bills into a single bill. “What we need to do is pass the Nekritz/Cross/Biss bill, let them take it to court. If the Supreme Court finds it unconstitutional, start over, responding to the opinion of the court. Putting the two together is just a terrible risk that you will lose the benefits of the best pension legislation.”
Thompson said combining two bills in one is an “open invitation” to the Supreme Court to find the better bill unconstitutional and leave state government with a bill that potentially could leave it in worse financial shape.
So, Thompson agrees that Cullerton’s half of SB1 is more constitutional, which is why it shouldn’t be combined with the Nekritz/Cross/Biss measure.
The Illinois House passed pension reform measures Thursday that would cap “pensionable” salaries at Social Security wages and would increase retirement ages on a sliding scale for employees under age 45.
Following another series of “test-votes” as part of House Speaker Michael Madigan’s (D-Chicago) “weekly order of business” process, the House passed its first pension reforms of the 98th General Assembly. The measures now move to the Senate.
The measure capping salaries - $113,700 indexed for inflation - upon which pension benefits can be based passed in the chamber by an overwhelming 101-15 margin. The change would apply only to employees hired before Jan. 1, 2011.
The bill that raises the age at which state employees can begin collecting benefits passed by a closer 76-41 vote; however, the measure would not include Illinois judges. Retirement ages for employees hired before Jan. 1, 2011 would increase by one year for those ages 40-45, three years for those ages 35-39, and five years for employees under age 35.
Neither bill changes retirement benefits for state employees hired after Jan. 1, 2011, according to Rep. Elaine Nekritz (D-Northbrook), who presented the bills on the House floor. Nekritz said the bills are identical to measures included in a comprehensive bill she has been working on with House Republican leader Tom Cross (R-Oswego). […]
House members also debated a measure that would increase the amount employees have withheld from their paychecks for pension benefits by 3 percent. But questions surrounding the plan’s constitutionality prompted the chamber to vote it down by a 37-79-1 vote.
A comprehensive pension bill was sent to the floor of the Illinois House Thursday, the third such plan now awaiting a final vote in either the House or Senate.
But as with the two proposals sent to the Senate Wednesday, there is no indication when a final vote might occur.
Rep. Elaine Nekritz, D-Northbrook, is the co-author of House Bill 3411, which was approved by the House Personnel and Pensions Committee on a 9-1 vote. […]
Only Rep. Raymond Poe, R-Springfield, voted “no.” Poe’s district includes large numbers of state workers, and he’s opposed to any measure that reduces pension benefits.
Friday, Mar 15, 2013 - Posted by Advertising Department
[The following is a paid advertisement.]
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* Subscribers know a lot more about this, but here’s an AP story from earlier in the week…
Illinois’ powerful House speaker said Wednesday that he supports a moratorium on high-volume oil and gas drilling, weighing in on the issue one day before a House committee is scheduled to consider competing bills involving the practice.
It was unclear how much sway that Speaker Michael Madigan, a Chicago Democrat, would have over lawmakers’ decisions, especially since more than 50 House members already have signed on to a bill that would regulate hydraulic fracturing, or “fracking” - the key to jumpstarting the practice in Illinois. Some suggested his comments might be meant to pressure industry over drilling fees and taxes.
But environmentalists and landowners, who rallied at the Statehouse this week to urge lawmakers to impose a moratorium, said they welcome the support.
“We take the speaker at his word and hold him to it that he recognizes a moratorium as the only true way to protect public health and the environment from the rolling environmental disaster that fracking has been,” in other states, said Bruce Ratain, state policy associate with Environment Illinois. “This is what real leadership looks like.”
Madigan, who introduced a failed drilling moratorium last year, would not elaborate except to say, “read about what happened in Pennsylvania.” The issue there has become controversial, including over water quality near drilling sites.
One day after nearly a hundred concerned citizens converged on Springfield, Ill., to call for a moratorium on fracking, House Speaker Mike Madigan, D-Chicago, announced March 13 his support for legislation to stop the dirty drilling technique in Illinois.
House Bill 3086 in the House (sponsored by state Rep. Deb Mell, D-Chicago) and Senate Bill 1418 (sponsored by state Sen. Mattie Hunter, D-Chicago) both call for a moratorium on fracking in Illinois, and are scheduled for committee hearings in Springfield.
“In state after state, fracking has been a rolling environmental disaster — contaminating drinking water, making nearby residents sick, and turning rural landscapes into industrial zones,” said Bruce Ratain, state policy associate for Environment Illinois. “We praise Speaker Madigan for looking carefully at the facts about fracking, and joining the growing call to keep it out of Illinois.”
Liz Patula, a member of SAFE (Southern Illinoisans Against Fracturing Our Environment), had the following response: “I said it yesterday in the Capitol and I will say it again today: New York’s Assembly just voted to extend its moratorium on fracking. Don’t the citizens of Illinois deserve the same protection?”
While in Springfield, activists also held a rally and press conference in the Capitol rotunda, and delivered materials or met with every legislator in the House and Senate.
Backers of a measure to regulate high-volume gas and oil drilling in Illinois announced Thursday they have agreed on the fees and extraction taxes that drillers would pay the state if lawmakers approve a plan to regulate the practice.
Under the agreed rates, well operators also would pay a 3 percent-per-barrel extraction, or “severance,” tax during the first two years of operation. That tax would scale up after the second year, depending on the well’s average monthly production. The highest tax rate would be set at 6 percent.
Denzler told legislators he was “reticent” to estimate how much revenue fracking could generate for Illinois, because production among wells varies. But he provided an overview using an estimated model: Production of 200 barrels a day per well, at a 3 percent tax rate, would generate just under $200,000 per year per well.
Denzler’s group is among those that helped draft Bradley’s proposal.
Gov. Pat Quinn, who has called the legislation a jobs bill, reiterated his support Thursday, a day after House Speaker Michael Madigan said he supports a moratorium on fracking. Quinn cited the endorsement from some environmental groups that helped craft the legislation.
If you think that Madigan’s moratorium announcement moved the industry to accept the tax rates, you’d be right.
* A member of the Republican State Central Committee sent out this e-mail yesterday…
From: Bob Winchester
Sent: Thu, Mar 14, 2013 2:23 pm
Subject: 3/9 meeting to oust Pat Brady
Dear Chairman:
I am just now (barely) recovering from the flu or you would have heard from me sooner!
When I left for Tinley Park, friday noon, there was 60.4% of the weighted vote to retire Pat Brady as Chairman of the State Party. The bylaws required 60%.
The committee members agreed on wednesday to a conference call at 8pm friday night to finalize details. Carol Donovan, Vice Chair of the State Party and the person who would become acting chair until we appointed a temporary chair(Carol had declined the temp. chair position) informed us that she would not be voting at the Saturday meeting. According to Carol , she had received calls from Mark Kirk, Tom Cross and various other elected officials who ask her not to attend the meeting. She said the pressure was just to great.
At that point we dropped from 60.4% to 59%. Needless to say all of us were very upset.
We decided to cancel. We only had one shot , so we decided to save the loss and wait until the april 13th regular scheduled meeting and possibly try again then.
The following(10 of 19 members) stepped forward early and was prepared to to retire Pat Brady saturday ,March 9th.
Bob Winchester
Mark Shaw
Jerry Clarke
Bobbie Peterson
Chris Kachiroubas
Judy Diekelman
Steve Daglas
Gene Dawson
Angel Garcia
Jim Oberweis
The above members represent 59% of the weighted vote—60% required or 3/5th to fire.
Carol Donovan would have been the deciding vote totaling 60.4%
* Rep. Jeanne Ives (R-Wheaton) has kicked up a hornet’s nest with some comments she made on a radio show about gay people and same sex marriage…
“They’re trying to redefine marriage. It’s a completely disordered relationship and when you have a disordered relationship, you don’t ever get order out of that. So I’m more than happy to take a ‘no’ vote on the issue of homosexual marriage.”
“I’m more than happy to stand up and take a courageous vote here on this issue because it’s the right thing to do. Essentially what they’re trying to do is not just redefine marriage, they’re trying to redefine society.
They’re trying to weasel their way into acceptability so that they can then start to push their agenda down into the schools, because this gives them some sort of legitimacy. And we can’t allow that to happen. The rights to marriage, what marriage is it’s really a natural right…
“It’s the natural right of the child to be with both parents, either in an adoptive nature or in a biological nature. To not have a mother and a father is really a disordered state for a child to grow up in and it really makes that child an object of desire rather than the result of a matrimony.”
It is unfortunate that certain comments I made recently in regards to the redefinition of marriage on a Catholic radio program have been misinterpreted.
I understand there is disagreement over the issue of whether or not to redefine marriage but it is unfortunate that political opponents have attempted to redefine or purposely misinterpret my views on this important matter by pulling two comments out of an approximately 20 minute discussion.
I have made my position very clear but for the purposes of additional clarity, let me restate it:
Like millions of Americans of all partisan stripes including in the Illinois House, including in the nearly three dozen states that have rejected the redefinition of marriage by popular referenda, I properly understand the institution of marriage and the word “marriage” to be defined as the union between one man and one woman. I have no comment on a person’s sexual orientation or personal relationships. That is their private business and I have no interest in meddling in a person’s private affairs.
I have simply made statements in defense of the attack on marriage from certain vocal constituencies who seek to redefine it out of existence. I do not believe it is the government’s place to redefine marriage.
The institution of marriage has existed for thousands of years. It predates government. In fact, government was in part created to protect the institution of marriage because of its critical importance in building civilization. Marriage is today what it has been from time immemorial, the foundation of family and thus the foundation of civilization. As a wife and mother of five, my interest, as I have previously and repeatedly expressed, is to protect the institution of marriage for future generations just as those who came before preserved it for me.
The people who disagree with me have chosen to ascribe meaning to my words that they did not have, just as they are attempting to assign a meaning to the word “marriage” that it does not have.
It is also worth noting that, currently, my position on marriage is the majority position in the Illinois House.
* I’m not so sure that I agree with Sen. Murphy here. Subscribers know more, but yesterday’s committee votes don’t really signal that any progress is being made on pension reform. Maybe the opposite…
A Senate panel endorsed two pension reform proposals Wednesday, but the lack of excitement about the dueling pieces of legislation may signal trouble ahead for the long-sought solutions.
Democrats and Republicans on the Senate Executive Committee said they were voting “yes” on the two fixes only so the proposals could continue to be further debated by the full Senate, perhaps as early as Thursday.
Senators also patted themselves on the back, arguing that they are moving faster on the state’s No. 1 issue than their counterparts in the House.
“There is a willingness to solve this problem,” said state Sen. Matt Murphy, R-Palatine.
* This all started Tuesday, when word went around that top business types had turned against Senate President John Cullerton’s SB1. Subscribers found out Wednesday morning, before the biz groups issued a statement…
A coalition that includes many of the state’s leading business groups and some civic organizations is stepping up its opposition to the pension-reform bill being offered by Illinois Senate President John Cullerton.
In a joint letter, organizations including the Illinois and Chicagoland chambers of commerce, Illinois Manufacturers’ Association, Taxpayers Federation of Illinois and Metropolitan Planning Council say that Mr. Cullerton’s bill would not help pare the state’s unfunded pension liability much and “could put the state in an even much more tenuous financial situation.” […]
The core of the group’s argument, which parallels criticism earlier from Civic Committee of the Commercial Club President Tyrone Fahner, is that Mr. Cullerton’s proposal to guarantee retirees access to health care in exchange for some trims in pension benefits won’t do enough to cut the state’s overall liability.
“The exchange has the potential to create a constitutional protection for retiree health care benefits that does not currently exist — thereby tying the state’s hands even further when managing its budget,” the letter said. With retiree health insurance costs potentially “in the tens of billions of dollars,” Mr. Cullerton’s bill would not cut the state’s liability nearly as much as another plan from Sen. Daniel Biss, D-Evanston, which would slash current unfunded state liability by $30 billion, about a third of the current $97 billion figure.
* But, of course, it’s not just the biz groups that are opposed…
Although Senate Bill 1 and Senate Bill 35 were both approved by the tightly controlled Senate Executive Committee, several Democrats on the committee made it clear they were not pledging their support if or when the bills come up for final votes in the chamber.
Cullerton has argued that “consideration” must be an element of pension reform, meaning that workers must be given a choice if changing pension benefits is going to be upheld by the courts.
However, Ty Fahner of the Civic Committee of the Commercial Club of Chicago testified that simply giving a guarantee that the state will make its required contribution to the pensions systems “is more than enough consideration.”
House Speaker Michael Madigan said Wednesday public employee retirement benefits will have to be less generous if the state is going to get a handle on its pension costs.
Speaking to reporters after addressing a conference of the International Brotherhood of Electrical Workers, Madigan specifically said changes to annual cost of living adjustments to retirement benefits will have to change.
“One place you must go is the COLA adjustment. You cannot evade that,” Madigan said of components that must be part of pension reforms.
The Speaker also attempted to convince IBEW leaders to help him convince AFSCME to make a deal…
Madigan singled out the American Federation of State, County and Municipal Employees, led by executive director Henry Bayer, as one of the main opponents in achieving pension reforms.
“I know how it is in unionism. There’s solidarity and there’s brotherhood,” Madigan said. “But I think the time has come where all of us have to call upon Henry Bayer and the AFSCME union to recognize the reality of the facts and these numbers. It’s not just his money. It’s not just the money of the AFSCME members. It’s all of our money.”
* When I saw the story this morning that Gov. Pat Quinn’s brother was fired as Fenwick’s head basketball coach, I felt for both men. Coach Quinn is, by all accounts, a heckuva guy, a great teacher and a solid coach. And his brother is understandably proud of him.
I decided not to do a cheap post and mock either man just for the sake of some ironic comments about… well, whatever. I’m not going there.
But keeping in mind that we don’t know all the circumstances behind Coach Quinn’s firing, I still find it odd that Gov. Quinn would be so aggressive with his reaction today…
The governor told reporters Thursday he feels the Oak Park school where he graduated has “lost its soul” and it’s a blow to his brother.
* Personal stuff should be kept personal. I really don’t like even thinking about things like this…
“It’s a devastating blow to my brother, John, and I think the administration there has let down the students, the alumni and shame on them.”
The governor, speaking slowly and carefully, hailed his brother, John Quinn, for being an award-winning “Golden Apple” teacher and a Hall of Fame coach with 469 victories.
Despite the public commentary, let’s try to not get too outraged in comments here. Brothers defend brothers. I get to say whatever I want about mine, but you’d better not. Remember that, and that Coach Quinn may very well have been shabbily treated before you hit the “Say It” button below. Thanks.
* Oy. What a day. Personal stuff is demanding immediate attention and I simply can’t be with the blog for the next few hours. We’ll get to pensions, AG Madigan, fracking, etc. later today. Sorry about that, but sometimes these things can’t be avoided.
Though all votes are preliminary, the proposals would require owners to register their guns, report lost or stolen firearms to state police within 72 hours and lock up their guns if they live with someone who is mentally ill.
The hours of discussion took place as part of House Speaker Michael Madigan’s (D-Chicago) “weekly order of business,” which he has used the last three weeks in search for a concealed-carry framework. And for the third straight week, Republicans decided not to vote on the measures due to what many of them consider a fruitless, political process.
“So what are you really after?” House Republican leader Tom Cross (R-Oswego) asked Democrats. “Are you after solving problems? Do you really want to [solve Chicago’s violence problem] or do you want to play these sick, senseless games week in and week out?”
Lawmakers debated for more than two hours whether to ban ammunition magazines that can hold more than 10 rounds of ammunition. The amendment ultimately failed 57-59.
Opponents asked the sponsor, Rep. Mike Zalewski, D-Chicago, to add some type of grandfather clause to allow law-abiding citizens to keep high-capacity magazines they already own, but Zalewski refused.
“I just watched a debate last two hours where members on our side of the aisle have pleaded with you and said, in a legitimate way, ‘I will support your bill if you make a change,’” said Minority Leader Tom Cross, R-Oswego.
* Larry Joseph, the director of the fiscal policy center at Voices for Illinois Children, lays out the grim future…
A few months ago, the Governor’s Office of Management and Budget released a three-year forecast showing that the rollback of income tax rates would force deep cuts in nearly every part of the budget. For example, fiscal 2016 state funding for education would be 20 percent lower than current levels and 30 percent below fiscal 2009 funding. Even with severe spending cuts, the state would have a $7.4 billion backlog of unpaid bills owed to school districts, community colleges, public universities, health care providers, businesses, community nonprofits and local governments.
The Civic Federation has presented a different scenario, which assumes growth in Medicaid spending but essentially flat funding for education, human services and other major policy areas. As a result of the drop in income tax rates, the backlog of unpaid bills would jump to $13.2 billion at the end of fiscal 2016, the Civic Federation projects. Some have suggested that fixing the pension funding problem would remove the need to maintain current income tax rates. But the Civic Federation’s projections show that even with a pension funding plan that saves more than $6 billion over three years, a backlog of $6.8 billion would still exist.
You can bet pretty much anything that any pension funding plan which saves that much money would be blocked in court for a couple of years, so there’d be no savings like that.
* We’ll get to the pension issue in a bit. But while somewhat over-wrought, the State Board of Education has some legit complaints about education funding…
Only one school district, Meridian CUSD 101 in Mounds, has taken the steps to officially pursue a waiver to move to a four-day school week. But state officials say that the idea and other seemingly drastic options are on the table in many districts that are struggling with recent cuts and trying to plan for possible future ones. Christopher Koch, state superintendent, said that suburban districts have been calling the Illinois State Board of Education and inquiring about shortening their school weeks. “I think the problem is they’re without options, and they’re looking at what can [they] do to keep the doors open. And how quickly can they do it. These are real discussions that districts and boards are having across the state. … It’s astonishing to be getting these requests, but that’s demonstrating what’s happening now,” said Koch. “It’s not only four-day school weeks, it’s high class size ratios, so you have a lot more students per teacher. You have all kinds of personnel being laid off across the state. [School] board after [school] board are approving that. It’s a number of things that are occurring that are no doubt going to erode the quality of instruction taking place.”
In its Fiscal Year 2014 proposed budget, the state board is requesting an increase of $874 million from the current fiscal year. According to the ISBE, pre-K through 12 education has been cut by $861 million since FY 2009. The board says general state aid to schools has been reduced by 7 percent, more than $320 million, since FY 2009. […]
Gery Chico, chair of the ISBE, said leaders in the state “have got to challenge the premise” that education must be cut under the next state budget. “That’s not the discussion. That shouldn’t be the discussion. That’s not what a great state’s about,” he said. “There’s not just one way to raise additional money, through pension [benefits] reduction. There’s other ways to raise money. And we need to have all those things on the table so that we don’t talk about four-day school weeks, we don’t talk about 40-plus-kid class sizes or more, we don’t talk about eliminating fundamental programs in schools.”
The governor has proposed another $275 million for the coming fiscal year.
House Speaker Michael Madigan, a decades-long constant at the Statehouse as Illinois’ pensions entered their death spiral, minimized the impact on bond investors Wednesday after federal securities regulators accused the state of misleading investors about the true calamity facing the state’s pension funds.
“It’s important to understand that the buyers of Illinois’ debt have all been paid their interest and their principal. We have not reneged on our debt payments,” Madigan told reporters when asked about this week’s damning Securities and Exchange Commission report against the state.
“So there are no victims here. Nobody’s lost any money,” Madigan said. […]
In making his statements after an appearance at an International Brotherhood of Electrical Engineers appearance, Madigan shifted blame for the problems cited by the SEC on his old nemeses.
“It’s more Rod Blagojevich and John Filan,” Madigan said, referring to the impeached ex-governor and the head of his budget office. “They got what they deserve.”
Fraud is fraud, and bond buyers could’ve received a higher interest rate had it not been for that fraud. So, yes, there were some victims.
His point about the Blagojevich administration is on point, however. The SEC pointed the finger of blame directly at them, and nobody else, for that fraud. There’s no shifting here.
The jovial nature of previous banter between two former General Assembly colleagues was gone Wednesday as House GOP Chief Deputy Whip Peter Roskam told President Barack Obama that Congress fears he’s leading the country to the same financial bankruptcy as the state they both hail from.
Roskam, of Wheaton, told the Daily Herald he tried to “teasingly translate” the “reluctance” heard in House Republicans’ voices in dealings with the White House during the closed-door meeting, where even a limited number of staff members were allowed to attend.
“When they hear the president talking about how he approaches the economy, they fear he’s leading in the same direction Illinois is now,” Roskam said he told the president during the meeting in the Capitol basement with 232 Republican members. “Pursuing revenues, not dealing with the underlying spending problems. Higher than average unemployment. What they hear is avoidance behavior.”
The meeting is part of the president’s aggressive outreach effort to Congress over the deficit, which has been nicknamed his “charm offensive.”
White smoke is pouring out of the chimney from the Vatican’s Sistine Chapel, signaling the Roman Catholic Church now has a new pope.
Vatican officials say that man will be introduced on the balcony of St. Peter’s Basilica in less than an hour. The bells of the basilica also have begun to toll.
* The Question: What is your religion?
*** UPDATE *** From CBS News…
BREAKING: Jorge Mario Bergoglio from Argentina announced as new #pope
Gov. Pat Quinn wants the state’s attorney general to appeal a federal court ruling that Illinois’ concealed carry ban is unconstitutional. An appeal would put the matter before the U.S. Supreme Court.
Illinois is the only state with such a ban. Quinn said Wednesday that an appeal is Illinois’ “only hope” of maintaining it. […]
Attorney General Lisa Madigan disagrees with Quinn. She told reporters Wednesday that she wants to see what lawmakers will do before considering an appeal.
This is being portrayed as a clear choice, so much so that I was considering making it a question of the day, but I decided to call the AG’s office first.
It turns out that by the time the US Supreme Court could do anything, even if Madigan files an appeal immediately (which she can’t reasonably do because these things take a bit of time and amicus briefs have to be solicited, etc.), the 180-day time limit decreed by the federal appellate court would have already expired, the AG’s office claims. And in the interim if the General Assembly passes a bill that becomes law, the case would be moot anyway.
Plus, there’s already an appeal to the top court of New York’s concealed carry law, which the US Supremes may take and Illinois could then possibly join.
* AG Madigan has, however, quietly filed a brief with the Illinois Supreme Court in a separate gun case which argues that the federal appellate court ruling was an “unsound decision,” is “plagued” with “infirmities,” uses references to previous US Supreme cases “out of context,” and commits a “failure to engage in an independent historical analysis.” The brief was sent to me by the NRA a few days ago and got lost in the usual session shuffle. From the filing…
(T)he majority opinion incorrectly marginalizes the significance of the extensive empirical evidence that supports a ban on the public carry of guns by arguing that Heller made clear “it wasn’t going to make the right to bear arms depend on casualty counts.” However, public safety was not a central concern in Heller where it involved the right to possess a gun for self-defense at home.
Neither defendant, nor the majority, dispute the fact that public safety is a relevant factor to be considered in evaluating the validity of public carry laws. Their position, though, disregards that fact that public safety, by definition, entails an assessment of whether the conduct sought to be regulated or banned places police officers and the public in general at risk of injury or death. As the dissent aptly recognized:
The Illinois statutes safeguard the core right to bear arms for self-defense in the home, as well as the carry of ready-to-use firearms on other private property when permitted by the owner, along with the corollary right to transport weapons from place to place.
Guns in public expose all nearby to risk, and the risk of accidental discharge or bad aim has lethal consequences. Allowing public carry of ready-to-use guns means that risk is borne by all in Illinois, including the vast majority of its citizens who choose not to have guns. The State of Illinois has a significant interest in maintaining the safety of its citizens and police officers.
The dissent, thus, properly found that the Illinois General Assembly “acted within its authority to conclude that its interest in reducing gun-related deaths and injuries would not be as effectively served through a licensing system,” and instead enacted a statutory scheme that prohibited most forms of public carry of ready-to-use guns. Accordingly, this Court should hold that the AUUW statute passes constitutional muster under any level of scrutiny.
* Madigan filed the brief with Cook County State’s Attorney Anita Alvarez, who made headlines recently when her aide claimed that the General Assembly wasn’t bound by a federal appellate court ruling. However, AG Madigan argues in the brief that the Illinois Supreme Court isn’t bound by the appellate ruling until the US Supreme Court weighs in…
This Court is not bound to the Moore/Shepard decision. It is well-settled that “[bjecause lower Federal courts exercise no appellate jurisdiction over State courts, decisions of lower Federal courts are not conclusive on State courts, except insofar as the decision of the lower Federal court may become the law of the case.” People v. Kokoraleis, 132 111. 2d 235, 293-294 (1989). This Court has recognized that “[ujntil the Supreme Court of the United States has spoken, State courts are not precluded from exercising their own judgments on Federal constitutional questions. Kokoraleis, citing United States ex rel. Lawrence v. Woods, 432 F.2d 1072 (7th Cir. 1979).
Accordingly, this Court should conduct an independent Second Amendment analysis in this case. Such an analysis establishes that Moore/Shepard was wrongly decided, and that it does not control the outcome of this Case.
* Comments made by defense attorneys yesterday have apparently prompted a gag order in Cook County Commissioner Bill Beavers’ federal trial…
The judge in the tax-evasion trial of an influential Chicago Democrat has imposed a gag order on attorneys a day after a defense lawyer said jury-pool selection was “rigged.”
The judge in William Beavers’ trial on Wednesday did not refer directly to the comments made by the Cook County Commissioner’s lawyer, Sam Adam Sr.
Beaver’s defense attorneys say they were shocked when the pool of 50 potential jurors filed into Judge James Zagel’s courtroom and there wasn’t one African American man among them.
“I am outraged, outraged, by what happened today,” defense attorney Sam Adam said. “I thought I was in Mississippi, I thought I was down there in Money, Mississippi, trying Emmett Till’s killers.”
Defense attorney Sam Adam, erupted in anger, after Judge James Zagel refused to request a new pool of potential jurors for William Beavers’ trial for failing to pay income taxes.
The 50 jurors from which 12 will be selected include just three black women and no black men.
“Commissioner Beavers is a black man and of 50 prospective jurors, not one black man,” defense attorney Sheldon Sorosky commented. “How is that a jury of his peers?”
“We were astonished,” Beavers attorney Victor Henderson said to Zagel after the jury was excused from the courtroom. “There is not one black male and just one or two black females.”
After hearing from Henderson, Zagel acknowledged it was rare to have a panel without a black male, but he also said there are potential legal problems with dismissing a properly-selected random panel.
Zagel declined the defense request and instead instructed both prosecutors and defense attorneys to confer with the U.S. Clerk’s office for the Northern District of Illinois to ensure the selection process used to put together the larger panel was done according to established protocols. […]
Outside court, Beavers’ attorneys called the process “rigged” and said they had no confidence that checking with the clerk’s office would make a difference.
Zagel said he would keep the names of jurors sealed until after the trial ends — a rare move normally reserved for mob or terrorist trials, or for especially high-profile cases.
In explaining why he opted for an anonymous jury, Zagel noted the case had drawn major media interest in the Chicago area.
“I’m trying to ensure there are no outside contacts with jurors,” he said.
* Beavers, by the way, continues to insist that he will testify…
Beavers, a former Chicago alderman who has described himself as “the hog with the big nuts,” has contended federal prosecutors charged him only because he refused to cooperate three years ago, when they asked him to wear a wire on fellow Cook County Commissioner John Daley and then-Board President Todd Stroger.
“What they’re really all about is that they tell some tall tales, you know? And I’ve got to straighten them out,” Beavers said Monday.
Prosecutors allege Beavers borrowed more than $225,000 from his campaign fund and converted it for personal use – including trips to a riverboat casino – and filed tax returns on the money only after learning he was under federal investigation.
Beavers and his team of lawyers say the money taken from the campaign fund was paid back and tax returns were amended.
Prosecutors allege Beavers made those moves after he learned he was under investigation. The defense denies that.
“Once you hear what happened here and find out the time period when receipts are given, the time period when money is given back, and you go through it, you’re going to see there’s only one answer here as to why a prosecution came at all: and that answer is going to be because he wouldn’t cooperate with the government,” said Beavers’ attorney Sam Adam Jr.
Monday’s pre-trial court proceedings, however, found defense attorney Aaron Goldstein trying to find other ways to address Beavers’ claims that the misuse of campaign funds he’s charged with was actually a loan he eventually repaid, and that he is being subjected to “vindictive prosecution” for refusing to wear a wire against Cook County Commissioner John Daley (D-Chicago). […]
“An offer was made, so to speak,” Goldstein said, and asked about the possibility of cross-examining federal agents on that subject.
Judge James Zagel has previously ruled Beavers can’t cite how he amended tax returns, or claim he is being subjected to retribution for not wearing a government wire, unless he takes the stand in his own defense. Assistant U.S. Attorney Matt Getter argued it would “sour the jury” for defense attorneys to suggest federal agents had indulged in “strong-arm tactics” against Beavers.
Zagel drew a sharp line between questioning a federal agent’s trustworthiness in cross examination and suggesting Beavers was being subjected to “vindictive prosecution.” The first was a normal part of trial, he said, the latter something for the judge, not the jury, to determine.
The ruling that Beavers has to testify to bring up the amended tax returns or suggest the trial is pure retribution was left standing. But both Beavers and Adam made clear they intend to pursue that argument.
* On Monday, I told you about a Crain’s story about alleged ties between Bruce Rauner and the notorious Stu Levine. From that Crain’s piece…
In testimony during the 2008 trial of Blagojevich pal Tony Rezko, Mr. Levine and others said Mr. Levine had had a $25,000-a-month contract “consulting” for CompBenefits Corp., an Atlanta-based dental and vision benefits company once known as CompDent. According to its website, CompBenefits at the time of Mr. Levine’s contract principally was owned by four private-equity firms, including GTCR LLC. Mr. Rauner, a founder of GTCR, is the “R” in the acronym.
Mr. Levine said his job was to get work for CompBenefits through whatever means were needed, including payoffs. A 2005 Sun-Times article says the firm then held contracts covering tens of thousands of workers at Chicago Public Schools and with the state.
Mr. Levine testified that he’d paid a bribe to obtain the CPS work, worked with insiders Bill Cellini and Ed Vrdolyak on other deals (both men later were convicted in unrelated federal cases) and plotted with Mr. Rezko to get work with Cook County via Orlando Jones, a key insider who later committed suicide.
Messrs. Levine and Rezko eventually went to prison on other matters, and prosecutors never took any action on CompBenefits. Perhaps that’s because they could not corroborate Mr. Levine’s testimony, or perhaps it’s because some major figures were going to prison anyway. I don’t know. Neither do I know whether Mr. Rauner or GTCR knew the details of what the firm was up to prior to the federal probe.
But I do know that Mr. Rauner, GTCR and Stu Levine had another interaction. That came in 2003, when the board of the Illinois Teachers’ Retirement System—on which Mr. Levine served—first tabled and then approved GTCR’s bid to get a $50 million investment from the giant pension fund.
According to a Sun-Times account, the bid stalled at the board’s February 2003 meeting after Mr. Levine objected but then was zipped through in May, when Mr. Rauner attended the board session. Now-retired TRS Executive Director Jon Bauman corroborates the gist of the newspaper report. He adds that he believes the February flop mostly was because of a bad presentation by GTCR but also says he does not know the particulars of Mr. Levine’s motives
The timing is an issue here. If Levine got that CompBenefits gig after the first unsuccessful TRS vote and before the second vote, then there’s a very serious problem. If not, then it’s not as bad. Neither article has that info, and I wasn’t able to find it online.
* Rauner’s spokesman Chip Englander responded via e-mail late yesterday…
Here’s the answer: Levine’s contract with CompBenefits started in the late 1990’s, years before the 2003 TRS vote.
Here’s the backstory. CompBenefits in the late 90s bought an Illinois company that was co-owned by Stuart Levine. As part of that purchase agreement Levine got a consulting contract. Fast forward, years later when CompBenefits discovered Levine was accused of wrongdoing they terminated the contract and assisted with the investigation against Levine.
I hope this helps.
So, if that’s all there is and Rauner’s flak is telling the truth, then there’s no there there.
As friends and foes assess Ed Rendell’s tenure as governor, few events better illustrate his record in one contentious arena - campaign fund-raising - than his 2001 trip to see a Chicago businessman.
Rendell was in the early stages of the governor’s race. Aides had dispatched him to the Windy City with what they thought was a reasonable goal - a $50,000 check, according to one who spoke on condition of anonymity.
Rendell left the meeting buoyant, but confessed to aides he never asked the would-be donor for a set amount. Rendell “just had a feeling,” he told them.
A week or so later, the Chicagoan, Bruce Rauner, sent a check for $200,000. Another check, for $100,000, came just before the election.
At the time, Rauner’s private-equity firm had business with the state of Pennsylvania. GTCR L.L.C. was managing $110 million in pension funds for the State Employee Retirement System, records show.
After Rendell became governor, the state doubled its stake in GTCR funds, to $226 million. That meant at least $4 million more in management fees to the firm.
As was the case with my column this week, there is no proof in the Philadelphia story that giving led to getting. “There’s nothing improper about the (pension) contract, nor anything to suggest Rendell influenced it or even knew about it,” the paper said.
Indeed, though Mr. Rendell did push an income tax hike when he was governor, he also did a lot of other pro-business things as governor, and earlier as Philadelphia mayor, that might appeal to Mr. Rauner.
As Rauner spokesman Chip Englander emailed me when I asked him for comment on the Philadelphia story, “The vast majority of (Mr. Rauner’s) donations have been to Republicans and conservative and government reform causes, but Bruce is an independent guy, and he has supported some Democrats who he knows personally, or who have pursued education reform or pro-business policies.”
Mr. Englander adds, “Pennsylvania invested in GTCR funds starting in 1997, four years before Bruce ever contributed (to Mr. Rendell). Pennsylvania invested in them, under Republican and Democratic governors alike, because of GTCR’s strong returns and great reputation.”
As with the Levine stuff, that could make for a good TV ad blasting the supposed “outsider” as a possibly corrupt insider. But they ain’t got him yet.
* The Windy City Times took a close look last week at where the roll call stood on same sex marriage. The Illinois Review published it in a more unreadable form, apparently unaware that they were getting their source information from a gay publication.
I looked at the list, which purports to show that gay marriage is ten votes shy of passage. I’ve talked to some of the House members on that list and I think some of the “No” votes are now leaning in favor of the bill.
But it isn’t going to be easy. One House Democrat I talked with last week wants to vote for gay marriage, but his strongly Catholic wife is absolutely, completely dead set against it. Sometimes, these things happen. Legislators are human beings, after all. He said he’d likely push for an amendment strengthening the protections for religious institutions.
Even with a generous tilt, I think it’s still maybe one to five votes shy of passage, depending on whatever the prevailing winds are at the moment. But proponents are pretty darned sure they can pass this thing, so expect a very strong final push.
Paul Caprio, Family PAC’s director, provides the voice in the robocall and says, “Your state representative Mike Smiddy has received $6,500 from Chicago homosexuals.”
Henry County Republican Jon Zahm works as a field director for Family PAC and sent a statement to local media about the robocall.
Mr. Zahm initially said he did not know which “Chicago homosexuals” the robocall referred to.
But in a subsequent interview he pointed to donations to Rep. Smiddy’s election campaign from two groups that advocate for equal rights for gay people and to a contribution from Fred Eychaner, who Mr. Zahm said is “openly gay.”
Smiddy is an avowed liberal. No way will a robocall move him off that bill…
“This is an issue primarily about the welfare of the children, protection of children, and what effect same-sex marriage has on that welfare and outcome,” Family-PAC’s Caprio said Sunday, claiming that children would less likely know their cultural and medical history if their parents were gay.
“Is it possible that what they call Parent 1 and Parent 2 could raise a child in a loving manner? Sure. But don’t you think it’s important a person know who their biological parents are?” he said.
Smiddy said adopted children can seek out their biological parents regardless of the parents’ orientation and called Caprio’s assertion “ridiculous.”
“I honestly thought it was a very ridiculous comment and a very untrue comment,” Smiddy said.
Caprio’s statement that he has been taking money from “Chicago homosexuals” is “greatly offensive.”
With a vote looming in the Illinois House, Rev. James Meeks is taking a stand against same-sex marriage by sending an “emergency message” to Illinois households.
Meeks, pastor of Salem Baptist Church on Chicago’s South Side and former state senator, said the pre-recorded call that reached roughly 200,000 households in 14 legislative districts beginning Friday was sent mostly to African-Americans.
“Please listen closely,” the message began. “Your state representative in Springfield is under serious pressure to redefine marriage in Illinois. If marriage between one man and one woman is redefined to add same-sex marriage, our family structure, as we know it, is in serious jeopardy.
“While being a member of the General Assembly for the last 10 years, I maintained the fact that this decision is too big for 177 people to make. If we are going to change Illinois, as we know it on such a broad scale, then your voice and input are very much needed.”
The National Organization for Marriage, a nonprofit that lobbies for defining marriage between a man and a woman, funded the pre-recorded message. The group’s backers include a former law clerk to Supreme Court Justice Clarence Thomas and a presidential appointee to the United States Commission on Civil Rights.
“Obviously [Meeks is] a very well known figure in the area,” said Brian Brown, the organization’s president and co-founder. “He’s an African-American standing up for the issue. We’re very happy he was willing to make the calls and stand up for marriage.”
Then again, Meeks may only have to scare one or two votes off the bill to kill it. Stay tuned.
* From today’s Chicago Tribune editorial about pension reform, the SEC fraud allegations and the 1994 pension funding law…
Many of those politicians, having sabotaged state government and its pension system, still hold office. In the best of worlds, those who voted for the pension plan Edgar signed, or for subsequent pension holidays, would resign.
* From an August 21, 1997 Tribune editorial. Emphasis added…
Jim Edgar can rightfully claim, as he did Wednesday in a preamble to his statement of retirement, that he will leave Illinois on a much sounder footing than when he took office in 1990. A resurgent national economy helped, but there’s no gainsaying Edgar’s leadership in reforming the state’s welfare system and in returning its pension and Medicaid programs to a pay-as-you-go basis. The times demanded fiscal stability, and Jim Edgar is stability personified.
So, um, maybe somebody needs to resign from the Trib editorial board?
Gov. Jim Edgar signed compromise legislation Monday to increase the amount of money flowing into the state’s five government pension systems over the next 50 years.
Dozens of state retirees were shepherded into the governor’s State Capitol office to witness his signature on the legislation, which now gives pensions the same status as bond financing in automatically receiving the first crack at money in future state budgets.
Though a co-sponsor of the measure, Sen. Penny Severns of Decatur, the Democratic nominee for lieutenant governor, said the legislation Edgar signed will cost taxpayers $17 billion more over its lifetime than an alternative plan proposed by her running mate, gubernatorial candidate Dawn Clark Netsch.
“Jim Edgar acted today to fix the pension mess, in great part, because this is an election year,” said Severns. “We need to have active leadership protecting our retirement systems all the time, not just in election years.”
Edgar, however, defended the new law and said Netsch’s alternative proved too costly and was unrealistic given the demands for state money from education, child welfare and other social services.
“This, we feel, is fiscally realistic,” Edgar said. “What we’re talking about putting in each year in new dollars can be done with the type of growth we expect to see in the revenues in the next few years.”
* Netsch talked about her efforts to reform the pension systems during an oral history compiled by the Chicago History Museum last year…
* Rumors are apparently flying that the Koch brothers are interested in buying Tribune Co.…
Multiple sources tell L.A. Weekly that Charles and David Koch — the infamous right-wing billionaire brothers — are considering an offer on either the Tribune Co. newspaper group, which includes the L.A. Times, the Chicago Tribune and the Baltimore Sun or the entire Tribune Co., which includes more than 20 stations like WGN and KTLA Channel 5.
So, you think those Trib editorials are harsh now? It’ll be Colonel McCormick all over again.
“As an entrepreneurial company with 60,000 employees around the world, we are constantly exploring profitable opportunities in many industries and sectors. So, it is natural that our name would come up in connection with this rumor. We respect the independence of the journalistic institutions referenced in today’s news stories, but it is our long-standing policy not to comment on deals or rumors of deals we may or may not be exploring. “
Wrapports LLC, owner of the Chicago Sun-Times, is exploring opportunities for expansion, including considering a purchase of Tribune Co. assets, according to sources familiar with the company’s plans.
Chicago-based Wrapports, led by Chairman Michael Ferro, has engaged New York investment bank Allen & Co. Inc. specifically to explore a purchase of assets of Chicago-based Tribune
Others who have said they’d be interested in buying Tribune holdings include News Corp. CEO Rupert Murdoch — who owned the Sun Times in the 1980s — as well as Freedom Communications CEO Aaron Kushner, owner of the Orange County Register based in Santa Ana, Calif., and San Diego Union-Tribune owner Douglas Manchester.
Click here for a bit of Murdoch history by Roger Ebert.
