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Special session possible and perhaps the stupidest veto ever

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Illinois

* If the Illinois Supreme Court strikes down the capital bill on Monday, expect a special session…

Quinn said Friday he hopes the court upholds the law. If they don’t, he says lawmakers would have to come back to Springfield to deal with the situation, something he called “a job emergency.”

More…

Quinn said they should be prepared to take action again if the Supreme Court strikes the law down. The governor said he would be “open minded” to raising taxes on cigarettes to pay for construction projects. But some lawmakers said they should stick to the original funding sources while finding a way to redraw the legislation so it passes legal muster.

A spokesman for House Speaker Michael Madigan said an alternative funding plan for the construction program has not been discussed because “we are confident that the bills passed by the legislature will be upheld.”

* Listen to today’s gubernatorial press conference…

Click to download

* If they have a special session, perhaps the GA can override some of the governor’s budget vetoes. Then, maybe, the regional superintendents will be paid. But this press release by the Illinois Association of Regional Superintendents of Schools suggests a deal is imminent…

“A meeting took place with the Illinois Association of Regional Superintendents of Schools (IARSS) and the Governor’s staff. We have agreed that the Regional Offices of Education will remain open and the Regional Superintendents will fulfill their duties. The Governor’s staff indicated that there is a desire to fund the salaries of the Regional Superintendents and their Assistants. There will be future meetings to work out the details.”

In fact, I’m told, a deal is imminent.

But, get this, the governor will reportedly use his 2 percent “reserve” authority to move money around within the state budget. The governor line-item vetoed the superintendent salaries. Those salaries were appropriated from the Common School Fund to the Illinois State Board of Education. Keep in mind, however, that his reserve authority applies only to intra-fund or intra-agency cash moves. He can’t move money from the Department of Corrections to the Board of Education, for example.

So, in other words, the governor will apparently be moving money to the regional school superintendents from the very same state funding source that he vetoed.

If true, then that was possibly the stupidest veto ever. Somebody was simply not thinking ahead.

* So, what happens if a previously vetted casino town elects a corrupt mayor? Perhaps they should explain this idea a bit more…

Des Plaines Mayor Marty Moylan and the mayors of seven other riverboat casino towns recently met with Gov. Pat Quinn to discuss the merits of the state’s massive gambling expansion plan. […]

Des Plaines, which was awarded the 10th and what was then the final casino license in late 2008, is gearing up for the July 18 opening of the Rivers Casino. […]

Moylan said the mayors asked Quinn to keep the oversight of any new gambling licenses under the Illinois Gaming Board’s authority.

“They should have to go through the same vetting process that we did,” he said.

* Ummmm….

Caterpillar Inc. avoided approximately $2 billion in U.S. taxes in recent years by fraudulently using Switzerland and Bermuda subsidiaries, according to a report on an executive’s lawsuit.

The executive, Daniel Schlicksup, alleges Peoria-based Caterpillar sold and shipped parts from a warehouse in Illinois and improperly accounted for $5.6 billion in profits on those deals to an arm in Geneva, Switzerland, according to Bloomberg News.

Now we know why they’re so sensitive to Illinois taxes. Apparently, they hate paying them so much they allegedly use foreign subsidiaries to hide taxable income. From Reuters…

The Geneva subsidiary, Caterpillar SARL, or CSARL, had no spare-parts employees and did no work to sell or ship the parts, Schlicksup claims in the lawsuit. The parts are shipped to dealers around the globe from a warehouse in Morton, Illinois, about 10 miles southeast of Caterpillar’s Peoria headquarters, according to the lawsuit, which also describes the spare-parts business as the company’s most profitable line.

“In order to shift profit to Switzerland, Caterpillar pretended to shift the management and control of a large portion of its most profitable business segment to Switzerland, but in reality the management and control of this business remains in the United States,” Schlicksup said in an 88-page declaration he filed as part of the suit.

“Everything is done the same way it was done before except that on paper, now CSARL is doing it, not Cat, while in practice Cat is doing everything,” O’Day said in an interview. While the Swiss unit nominally buys the parts from suppliers, it maintains its inventory in the U.S. unit’s Morton warehouse, where Caterpillar Inc. (CAT) employees ship it and send invoices, he said. […]

While the Swiss structure moved income to Geneva, Caterpillar had New York-based accounting firm Ernst & Young LLP devise a complementary “Bermuda strategy” aimed at returning some cash to the U.S. without paying tax on it, according to a Nov. 13, 2006 memo from Pricewaterhouse and internal corporate tax summaries from 2006 and 2007 written by Schlicksup’s then- boss, Robin Beran, Caterpillar’s chief of global taxation. The documents are filed as exhibits to the lawsuit.

posted by Rich Miller
Friday, Jul 8, 11 @ 1:12 pm

Comments

Sorry Rich his veto of the care act was the stupidest veto ever….

Comment by OneMan Friday, Jul 8, 11 @ 1:20 pm
If I didn’t know any better, I would think that Blago was pulling the strings of this puppet!!!

Like I said yesterday Same Policies, Same practices!!!

Comment by He Makes Ryan Look Like a Saint Friday, Jul 8, 11 @ 1:34 pm
That Caterpillar story is the tip of the iceberg. I’m sure there are a ton of companies that posted losses in America the last couple years and profitable sections of the company in other countries through various front activities. There is no way the entire top 100 US companies all lost money in America last year. This is the story of the year.

Comment by JBilla Friday, Jul 8, 11 @ 1:55 pm
Dear Ryan: your schtick is way old…so you dislike Quinn…add to the discussion or go away…

Comment by Loop Lady Friday, Jul 8, 11 @ 2:02 pm
- Like I said yesterday Same Policies, Same practices!!! -

Yeah, I see evidence of Quinn shaking down Children’s hospitals and selling appointments all over the place. Criticizing his governance is one thing, but comparing him to Blago just makes you look like a buffoon.

Comment by Small Town Liberal Friday, Jul 8, 11 @ 2:03 pm
Looking forward to hearing from the Civic Committee of the Commercial Club or CT Editorial page on this subject.

Comment by Johnnie F. Friday, Jul 8, 11 @ 2:13 pm
“You’ve always been honest with me, and that’s why I want you to know about these letters,” [Cat CEO Doug Oberhelman] says to Quinn. “I’m not sending them to you as a threat that Caterpillar is leaving Illinois…I’d like to invest more here…but as the leader of this business, I have to do what’s right for Caterpillar.” https://capitolfax.com/2011/03/29/we-may-not-lose-cat-but-were-definitely-losing-the-war/

Comment by Dooley Dudright Friday, Jul 8, 11 @ 2:13 pm
CSARL: give credit to the bright bulb that thought this issue through step by step and figured out a way to make it work. Right or wrong is not the issue.

Governor’s staff: Maybe you should get some consultation time with CSARL on how to think a detailed project through to a conclusion that works.

Comment by zatoichi Friday, Jul 8, 11 @ 2:20 pm
It occurs to me that someday, maybe someday soon, people in Illinois will use Blago as the ultimate example of evil government leadership breaking the over 50 year run of German uber achiever Hitler.

Comment by Hawkeye Friday, Jul 8, 11 @ 2:24 pm
…how much more revenue are the fine upstanding corporate marauders keeping from the State?
I guess we’ll never know for sure…meanwhile, my husband and I keep paying our 33%…no wonder the country is on the verge of default…

Comment by Loop Lady Friday, Jul 8, 11 @ 2:25 pm
zatoichi - the employee is alleging that the practice is not legal. Fraudently is not legal.

Comment by Anon Friday, Jul 8, 11 @ 2:35 pm
LL, if you guys are paying 33% to the state, you need to get help with your return

Comment by steve schnorf Friday, Jul 8, 11 @ 2:41 pm
Historically, Caterpillar management has been a right-wing group. Perhaps, we should broaden the definition of criminal tax evasion and lock-up a couple hundred Fortune 500 CEOs/CFOs, including the forfeiture of their corporate benefits. All too often the corporate veil of limited liability shields this self-serving thievery.

Comment by Louis Howe Friday, Jul 8, 11 @ 3:11 pm
Schnorf — I think it is nice that Loop Lady is giving more than her fair share. Substantially more… If there were more like her, our state’s fiscal problems would be solved.

Comment by soccermom Friday, Jul 8, 11 @ 3:22 pm
At the risk of brining in outsiders to Rich’s outstanding commenting community here… I think everyone should take a minute to vote for CapFax as the best State Based political blog (for Illinois), so Rich gets the credit he deserves.

Here is the link to the Washington Post which is compiling the list:
http://www.washingtonpost.com/blogs/the-fix/post/the-best-state-based-political-blogs-2011-edition/2011/07/07/gIQAejSB2H_blog.html#comments

I doubt our humble founder is one to self-promote, so I figure we take it into our own hands and take a few seconds to vote.

Comment by Jimmy CrackCorn Friday, Jul 8, 11 @ 3:23 pm
So Quinn took action without properly thinking the entire thing through? Shocking! Absolutely shocking!

Comment by Not a Newcomer Friday, Jul 8, 11 @ 4:11 pm
Sorry Rich, but I staffed a vetoed bill during Quinn’s first year and it eliminated paragraphs of current law. Just on a technical basis that has to be the stupidest veto ever. This one is bad though, at some point you just have to laugh. He is his own worst enemy.

Comment by Anonymous Friday, Jul 8, 11 @ 4:49 pm