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* The Sun-Times reports on yet another lawsuit against Bruce Rauner’s former company GTCR…
In a federal lawsuit filed against GTCR, Universal American says Rauner’s firm essentially sold it a $222.3 million lemon after APS and GTCR executives engaged in a “deliberate campaign to conceal the truth.”
But this choice little nugget was buried way down in the piece…
Without admitting wrongdoing, APS [which was owned by Rauner’s company from 2007 until 2012] agreed to pay $13 million to settle allegations from the federal government and the state of Georgia in 2011.
The feds said the firm “failed to provide the required services to a large portion of the Medicaid recipients and over-billed the Georgia Department of Community Health.” This allegedly occurred from 2007 until 2010.
“APS Healthcare took Medicaid’s money for itself and left some of our most vulnerable citizens without the aid they deserved,” Sally Quillian Yates, the U.S. attorney for Georgia’s northern district, said at the time the settlement was announced.
Ouch, ouch, ouch, ouch, ouch.
* And the Quinn campaign followed up early this morning with a press release containing “Additional examples of fraud”…
Lason
“If his (political) narrative is ‘I’m a hands-on manager,’ this is not a firm where you would want to say that,” said Peter J. Henning, an expert on securities fraud and white collar crime. “If he was hands-on, he certainly might have gotten his fingers dirty. Henning said Lason might be recalled as “one of the worst accounting frauds ever” had it not been upstaged by similar scandals at much bigger companies — Enron and WorldCom.” (Chicago Tribune, 1/20/14) In an August 1999 interview with The Wall Street Transcript, a subscription newsletter that features interviews with business leaders, Rauner hailed Lason as a “great company … doing quite well,” and went on to describe an ownership philosophy at GTCR steeped in the kind of hands-on involvement he now vows to bring to the governor’s office if elected. “We spend a lot of time living with our companies on a week-to-week basis, understanding what’s going on, and being in the flow of information, so we can be helpful and knowledgeable about the operation,” Rauner said. (Chicago Tribune, 1/20/14)
Acartha
In 2004, Mr. Rauner made a personal $4.5 million startup investment in fund manager Acartha Group LLC, a suburban St. Louis firm founded by Burton Douglas Morriss. Before Acartha, Mr. Morriss had already arranged one deal in which the duo made more than $75 million. Mr. Rauner, an avid outdoorsman, also owned a hunting camp with Mr. Morriss. But in 2012, the SEC seized control of Acartha, accusing Mr. Morriss of defrauding investors of $9.1 million. Mr. Rauner was a “passive investor” who was “misled and defrauded” by Mr. Morriss, like dozens of others, Mike Schrimpf, a spokesman for Mr. Rauner’s campaign, says in an email. “Bruce is angered and outraged by Morriss’ actions.” […](“Rauner backed firm later shut down for fraud,” Crain’s Chicago Business, 2/24/14) To acquire his stake in Acartha, Mr. Rauner traded his interests in Hela and another Morriss venture, for which he paid $2.5 million, and paid an additional $2 million in cash. The two men along with two others also owned a hunting lodge and farm in Canada. […](“Rauner backed firm later shut down for fraud,” Crain’s Chicago Business, 2/24/14)
In a 2005 interview with the St. Louis Business Journal, Morriss said that two of his partners in the Acartha Group included New York financier Nicolas Rohatyn and Bruce Rauner, who operates a Chicago-based private equity firm. They did not return phone calls Tuesday. Morriss served as chairman of the board…”Morriss lived a lavish lifestyle, living in a multi-million dollar home, driving luxury automobiles, leasing a private airplane and helicopter, and taking expensive vacations,” the SEC complaint states. (“SEC accuses Clayton-based financier of defrauding investors,” St. Louis Post-Dispatch, 1/18/12)
“Bust Out” Nursing Home scheme
According to a U.S. Bankruptcy Court judge in Florida on March 14, Rauner can’t walk away from being at the helm of an elaborate “bust out” plan to avoid culpability for purchases and practices of a string of nursing homes.
posted by Rich Miller
Wednesday, May 14, 14 @ 9:50 am
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You know what would be ironic? If Bruce goes to jail before taking office.
Comment by Cheryl44 Wednesday, May 14, 14 @ 9:56 am
Cue the “It’s baloney, all baloney, dirty politics…”
(Thoughtful pause, angry “face” begins)
Cue the “What should upset the citizens of Illinois are the Quinn Investigation..S!”
Comment by Oswego Willy Wednesday, May 14, 14 @ 9:58 am
I guess we know how he plans to “reform” Medicaid now.
“I’ll run state government like a business, just not like one of my businesses.”
Comment by 47th Ward Wednesday, May 14, 14 @ 9:59 am
Rich:
You were right yesterday. I must have been too hard on Bruce Rauner by putting up links of his wife’s past. I apologize. It appears Bruce Rauner is a misunderstood idealist.
Comment by Steve Wednesday, May 14, 14 @ 10:00 am
Rauner is clearly the guy to go after all that alleged Illinois Medicaid fraud GOPers are always talking about.
Set a thief to catch a thief.
Comment by wordslinger Wednesday, May 14, 14 @ 10:01 am
“Bruce is not involved with this, and it is best to let GTCR’s motions speak for themselves,” —-Rauner spokesman Mike Schrimpf said Tuesday. “Bruce was never on the board at APS, did not put together the deal and played no role in the management of the company.”–
How do you continue to run as a “hands-on businessman” while claiming you had absolutely no responsibility or accountability for your companies?
Comment by wordslinger Wednesday, May 14, 14 @ 10:09 am
Wordslinger made me chuckle. Then again, Rauner does seem to have an amoral character similar to past governors that dress in stripes.
Comment by archimedes Wednesday, May 14, 14 @ 10:10 am
“failed to provide the required services to a large portion of the Medicaid recipients and over-billed”
Say what you will about Bruce Rauner, he knows a thing or two about Waste, Fraud and Abuse.
– MrJM
Comment by MrJM Wednesday, May 14, 14 @ 10:14 am
Honesty. Integrity. Ethics. Morals .
Those words are haunting when I think about all this and Bruce Rauner , and how he has lived his life, and how “Bruce Rauner” wants to be seen, irregardless if it glued in the face of a Carhartt and a watch.
Comment by Oswego Willy Wednesday, May 14, 14 @ 10:14 am
==You know what would be ironic? If Bruce goes to jail before taking office.==
That would be ironic, especially since he’s not named or charged with anything
Comment by Anonymous Wednesday, May 14, 14 @ 10:14 am
“Flies”
Comment by Oswego Willy Wednesday, May 14, 14 @ 10:15 am
I’m convinced Common Core math being promoted by Bruce and Diana Rauner will clear up all the mistakes that were made.
Comment by Steve Wednesday, May 14, 14 @ 10:17 am
Rich I love the back to back posts of our gubernatorial candidates both being investigated. Only in Illinois
Comment by Almost the Weekend Wednesday, May 14, 14 @ 10:22 am
So let me get this right, you buy a company for $222 million and there are issues so you are suing?
That’s some great due diligence dude… I get the nursing home stuff, but this? If you are spending $222 million for something, you kind of fall under the sophisticated investor argument and it is buyer beware…
Also the Bankrupcy Court can go after the seller in situations like this and has from what I understand. If it is that bad of shape, why not do that?
Sorry not convinced on this one…
Comment by OneMan Wednesday, May 14, 14 @ 10:24 am
Reminds me of a Dick Jauron (former Chicago Bears head coach)regarding a comment that was made on his coaches radio program , with his name attached…”it’s not my show but I’m on that show:” !! HUH?
Comment by railrat Wednesday, May 14, 14 @ 10:25 am
Correction: Sorry, Rick Scott’s company was guilty of very substantial Medicare (not Medicaid) fraud, and paid a giant fine.
Interesting the big money routes to high office.
Comment by Walker Wednesday, May 14, 14 @ 10:31 am
Walter Mitty, Arizona Bob hope to hear your thoughts on this soon…
Comment by PublicServant Wednesday, May 14, 14 @ 11:01 am
So, who to vote for? The hack reformer or the sleazy operator? Decisions, decisions……
I would support the “Re-Boot Illinois Party”. I just wish it existed.
Comment by dupage dan Wednesday, May 14, 14 @ 11:10 am
I’m not normally for third party candidates, but with these two in the news for scandals and investigations it’s not an easy choice. ugh.
Comment by PoolGuy Wednesday, May 14, 14 @ 11:16 am
I guess the Rauner Borg are inactive receiving new instructions from the hive mind.
Comment by PublicServant Wednesday, May 14, 14 @ 11:17 am
Best case for Rauner:
“I was surrounded by some real slimy characters, whom I chose as partners, fellow board members, and CEOs in my investments, but I was angered by their actions when they first came to light in court.”
Of course Rauner cashed all the checks they made together, and tried to avoid all accountability, or paying for the settlements and losses when they went bad.
Best case.
Bain Capital and Romney were saints by comparison.
Comment by Walker Wednesday, May 14, 14 @ 11:19 am
Claims by consumers against companies like APS are filed by plaintiffs’ lawyers. Plaintiffs’ lawyers are some of the most robust campaign contributors to liberal democrats. Pat Quinn is a liberal Democrat and as received his fair share of campaign contributions from plaintiffs’ lawyers.
Connect the dots.
Comment by Conservative Republican Wednesday, May 14, 14 @ 11:20 am
Why aren’t we talking about the VA Hospital system scandal?
Oh yeah, that’s right, that’s a “federal” issue, not an “Illinois” issue.
My point really is that nursing home and geriatric care negligence have been endemic in this country for decades. You can’t lay the problem at Rauner’s feet. I think most voters will figure that out come November.
Comment by Conservative Republican Wednesday, May 14, 14 @ 11:23 am
‘We spend a lot of time living with our companies,..understanding what’s going on, and being in the flow of information, so we can be helpful and knowledgeable about the operation,” Rauner said. (Chicago Tribune, 1/20/14)
‘Mr. Rauner was a “passive investor” who was “misled and defrauded”.’
Is consistency or convenience the best way to run a business like a business?
Comment by zatoichi Wednesday, May 14, 14 @ 11:27 am
@Conservative Republican - So Rauner’s just a local practitioner of the much larger problem of “geriatric care negligence” then, right? Rauner, the hands-on manager, who is running for Illinois governor on the Republican ticket, and denies having any knowledge of what was happening, right?
Why single him out, huh?
Comment by PublicServant Wednesday, May 14, 14 @ 11:31 am
====Rauner lawsuit oppo dump continues====
It is what it is. Expect more of it as we go along. As it’s not “unfair” to closely inspect every public official’s records, votes, policies, it’s not “unfair” to look at every business transaction conducted over a lifetime either. Two guys this age will have lengthy lists to compare and contrast. All the additional ‘interpretation’ will be provided, don’t you worry about that at all.
Comment by A guy... Wednesday, May 14, 14 @ 11:34 am
Plaintiffs’ lawyers are some of the most robust campaign contributors to liberal democrats. Pat —-Quinn is a liberal Democrat and as received his fair share of campaign contributions from plaintiffs’ lawyers.
Connect the dots.–
I connected the dots and got ” Behghazi.” Is that the right conspiracy?
Comment by wordslinger Wednesday, May 14, 14 @ 11:36 am
Conservative Republican -
“Claims by consumers against companies like APS are filed by plaintiffs’ lawyers.”
Seriously? From the Sun-Times article: “’APS Healthcare took Medicaid’s money for itself and left some of our most vulnerable citizens without the aid they deserved,’ Sally Quillian Yates, the U.S. attorney for Georgia’s northern district, said at the time the settlement was announced.”
So in this case the “plaintiff” was the U.S. Department of Justice, and Rauner’s company paid $13 million to settle claims of Medicaid fraud. And here I thought conservative Republicans were all about going after things like Medicaid fraud. It looks like you need to call up the campaign and ask for a new talking point.
Comment by OldSmoky2 Wednesday, May 14, 14 @ 11:49 am
As someone asked in a previous post, “who is the green candidate for governor?”
Comment by independent Wednesday, May 14, 14 @ 11:52 am
O.K. That makes it 5 for 5 on Shakey Mitt Rauner outfits that are kinky.
Perhaps Mr. Shrimp could give us a quick list of any of the 400 outfits Shakey likes to boast about that have been found clean by the own oppo research. At this rate we will need to report about 3 a day to get a full understanding of Shakey’s biz prowess.
BTW there is still time for someone to hop a flight to Duluth to chat with Stu about how well he and Shakey know each other.
Comment by CircularFiringSquad Wednesday, May 14, 14 @ 11:53 am
Maybe we need to pay closer attention to the Lt. Gov. candidates. I’m not sure either of these guys will make it the full four years.
Comment by girllawyer Wednesday, May 14, 14 @ 11:55 am
December 2014: Bruce Rauner has been convicted of fraud by a Florida supreme court and sentenced to 10 years in prizon.
January 2014: Rick Scott pardons Bruce Rauner and anounces he will be bruces running mate as vice-president of the united states.
Comment by Throwing Stones Wednesday, May 14, 14 @ 12:06 pm
“Claims by consumers against companies like APS are filed by plaintiffs’ lawyers.”
Yes. And fires are put out by firemen, and policemen police for crime.
And now that we’ve met the people in the neighborhood, do you have anything resembling a point?
– MrJM
Comment by MrJM Wednesday, May 14, 14 @ 12:14 pm
Looks like whoever did the oppo on Bruce for “Bruce” neglected to think of responses to these … issues … that make reasonable sense.
Or, they are indefensible, so the Sgt. Schultz routine is all ya got?
The Mob-Style “Bust-Out” makes more and more sense to me.
Anyone who says…
===“I want to get to know every legislator on a first name basis. I want to get to know them, their families, their hopes, their dreams, their fears, their weaknesses, their vulnerabilities. I want to get to know them well.”===
Tom Hagen; busts out business, wants to know how to bust a 1/3 of Illinois government too.
Comment by Oswego Willy Wednesday, May 14, 14 @ 12:24 pm
===Maybe we need to pay closer attention to the Lt. Gov. candidates. I’m not sure either of these guys will make it the full four years.===
“Slip and Sue”?
Unless it’s a Personal Injury settlement, she seems to lack just about every possible skill set.
When your Bio is this…
“Evelyn’s father legally immigrated to the United States from Ecuador, and her mother entered the country as a Cuban refugee.”
…and you can’t get Podium Time to talk about immigration, what really do you bring to the table?
When you claim “seeing corruption”, but not really seeing it, and never reporting it, how can you clean up government?
When you are a new Councilman, never re- elected…a Coucilman, how can you run the 5th largest state in America?
“Slip and Sue” is barely qualified to be interim Wheaton Mayor.
There seems to be a pattern in Bruce Rauner choices?
Bad choices, ignoring reality, everything is either “baloney” or not his fault or without his knowledge?
And now, his insurance policy is “S&S”?
Yikes.
Comment by Oswego Willy Wednesday, May 14, 14 @ 12:35 pm
Super impressed at what Rauner has been able to accomplish. He’s converting name brand democrats into believers! Sounds like UNO’s former patronage boss- Juan Rangel is now joining the Chicago Young Republicans. That is great news! Well done.
Comment by Statesman Wednesday, May 14, 14 @ 12:35 pm
===I guess the Rauner Borg are inactive receiving new instructions from the hive mind.===
A scary thought, PublicServant!
Comment by Mighty M. Mouse Wednesday, May 14, 14 @ 1:00 pm
And lets continue to blame Pat Quinn for all the state’s ills. Since PQ hs not held a private sector job in years, should be fun.
Disturbing these allegations and revelations are.
Comment by Wumpus Wednesday, May 14, 14 @ 1:03 pm
Gee Mr. Willy, I take it you are not voting for Rauner.
Comment by DuPage Rep Wednesday, May 14, 14 @ 1:13 pm
- DuPage Rep -,
If I’m not an “undecided”, then I need to work on my people skills to express that better…
Comment by Oswego Willy Wednesday, May 14, 14 @ 1:21 pm
Public… I am no Raunerite I hate to break it to you… In fears of your head exploding, I will say this. When you buy and sell companies you being hands on that part of the process and have no real idea other than the asset and making the right deal… That was his business. I know you don’t like it. I don’t even. But to cheer as if he was walking around these places counting nickels and withholding meds… Our current Governor has plenty to answer for with public money… These will come out again about Rauner… It’s almost already “background noise” …. The more they trickle…The less a 30 second spot to explain it… The more meaningless they will become… 30 seconds about the current Governor and scandals…easy peasy…
Comment by Walter Mitty Wednesday, May 14, 14 @ 1:22 pm
Public… By the way…As CEO of Illinois let’s hear about all of the DCFS cuts that lead to child abuse? Any state prisons have issues? It’s not as comfortable when you look at both sides…But I at least always try…
Comment by Walter Mitty Wednesday, May 14, 14 @ 1:27 pm
==Bain Capital and Romney were saints by comparison.==
One might not like the business decisions of Romney-directed BC and one might not like the profit above people values present at BC when it was directed by Romney, but one point in their favor is that at least they were operating legally, not leaving a massive string of out and out fraud in their wake.
==As someone asked in a previous post, “who is the green candidate for governor?”==
Scott K. Summers. He was their nominee for treasurer in 2010.
Comment by Precinct Captain Wednesday, May 14, 14 @ 2:00 pm
#BustOutBruce
Comment by too obvious Wednesday, May 14, 14 @ 2:03 pm
What exactly did Rauner do at GTCR to earn all of that money? Just wondering because whenever he gets a question about something that happened while he was chairman of the firm he seems to have been out sick that day or something.
Comment by too obvious Wednesday, May 14, 14 @ 2:06 pm
@too obvious:
Here’s the conundrum. Rauner was a salesman, a dealmaker, not an analyst like Romney.
It is likely why he has earned so much praise for his campaigning ability. Stick to the sales pitch, smile, be likable.
Unfortunately, although Rauner has been the private sector equivalent of a career politician his entire life, some folks — editorial boards mostly — think that a candidate for governor ought to actually be able to run the state.
So, Rauner did what most salesmen sometimes do: he oversold it a teensy bit. Okay, a lot. I’ll bet Rauner had no clue what 99% of the businesses in their portfolio were doing on any given day, which is exactly what his lawyer would tell him to say.
Comment by Yellow Dog Democrat Wednesday, May 14, 14 @ 2:55 pm
If we just jail both Quinn and Rauner, neither will be able to vote for themselves this November!
Comment by VanillaMan Wednesday, May 14, 14 @ 3:33 pm
No one has been indicted.
Bad “Optics” to say the least, but for both campaigns’ sake, and to keep the hyperbole to a dull roar…
…It really bothers me getting ahead of investigations. There is a grand jury, the US Attorney has a report, even Rauner has some questionable legal outcomes to hammer, but the speculation, that is a road others can travel…
Comment by Oswego Willy Wednesday, May 14, 14 @ 3:40 pm
–I’ll bet Rauner had no clue what 99% of the businesses in their portfolio were doing on any given day,–
If that’s the case, then the whole foundation of his campaign falls apart.
You can’t campaign on “running it like a business” on one hand, and then claim “I have no idea what’s going on in my businesses” on the other.
Comment by wordslinger Wednesday, May 14, 14 @ 3:51 pm
It’s just another day in nuclear campaigning. Have to wait for the smoke to clear to see who’s house is left standing. It is important to keep an eye on who is investigating who here. One is a response saying Don’t look at me, look at what this guy did”. Might focus on him for a while.
Comment by A guy... Wednesday, May 14, 14 @ 3:53 pm
“I was surrounded by some real slimy characters, whom I chose as partners, fellow board members, and CEOs in my investments, but I was angered by their actions when they first came to light in court.”
If Rauner says he erred by being surrounded by slimeballs after he accuses politicians and others of being slimeballs or surrounded by them, he is unfit to lead.
Comment by Grandson of Man Wednesday, May 14, 14 @ 3:54 pm
===You can’t campaign on “running it like a business” on one hand, and then claim “I have no idea what’s going on in my businesses” on the other.===
That sums it up best. Well said.
You can’t run a campaign based on the premise of what makes you the best choice, looks like a bad reason to have you as any choice.
Comment by Oswego Willy Wednesday, May 14, 14 @ 4:04 pm
Now THAT $222 Million “Lemon”–if you could squeeze it–is probably big enough to fill Lake Michigan…! OUCH indeed!!!
Comment by Just The Way It Is One Wednesday, May 14, 14 @ 7:20 pm
Mitty - You’re wrong. GTCR tried to use the passive investor defense, the judge is saying no way. As noted by others, Rauner’s style is hands on, by his own admission.
Reap the whirlwind Bruce.
Comment by Anonymous Wednesday, May 14, 14 @ 9:07 pm
You do quite well stating the Rauner can’t make a case that he is hands-on, but not hands-on regarding this situation, but you are so unbelievably blind when Quinn claims he is a reformer, yet acts shocked that $54,000,000 he granted to the South Side is mishandled, or when Pat doesn’t seem to have found the ability of reforming the governor’s office of so many Blagojevich people. Then Mr. Reformer is failing to handle IDOT hirings according to the law…but he still claims to be a reformer!
Open your eyes and see both candidates in their horrible richness of their bloviating magnificence! Stop sparing Quinn of what you are serving up on Rauner. They both deserve the same.
Comment by VanillaMan Wednesday, May 14, 14 @ 9:31 pm
Vanilla… My point made better by you…. It’s the failure to look at both sides…
Comment by Walter Mitty Wednesday, May 14, 14 @ 9:40 pm