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Despicable

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Illinois

Once again, more kudos to Alexi Giannoulias for ordering the audit that uncovered this craziness…

A Collinsville hotel built with millions in state loans apparently became a cash cow for the property’s owners and managers who all the while claimed they could never turn a profit, according to a new report in the foreclosure lawsuit.

Officials for years have wondered why the developers couldn’t make the Holiday Inn successful, and the unpaid loans have been a thorn for every state treasurer since they were issued in 1982. The state took control of the property in January, and new Treasurer Alexi Giannoulias ordered a review of the books.

After an accounting of the hotel’s records and interviews with employees, the report by the hotel’s new court-appointed management company cites instances of inflated salaries, ghost payrolling and what appears to be outright theft. Several relatives of one of the owners were paid tens of thousands but did no work, and the general manager received a $31,000 profitability bonus when the owners claimed poverty, according to the report, which was expected to be filed in Madison County court this week. […]

The balance owed for the Collinsville property has ballooned to more than $29 million. State officials see the latest allegations as confirmation of their suspicions that the owners never tried to pay anything back.

Go read the whole thing. It’s just despicable.

posted by Rich Miller
Tuesday, May 1, 07 @ 10:53 am

Comments

Once again, major kudos to Alexi.

Hopefully the guy is doing a full audit of every program and deal Topinka ever administered or had her grubby fingers in. This is just the beginning of the dirt that’s been swept under the rug for years.

I might look at that movie filming program next that her office ran.

Comment by Not Surprised Tuesday, May 1, 07 @ 11:21 am
Iâ€™ll admit that I was against him at first with all the allegations creeping out against him but so far he sure has done a phenomenal job. Unfortunately a lot of what he does goes unnoticed in the main stream media state wide. Thanks for reporting these happenings.

Comment by Solidarity? Tuesday, May 1, 07 @ 11:30 am
Not Surprised, you might want to read then entire article…This started before Topinka was in office…

But the project has been mired for years in debt and political wrangling. When the owners fell behind on payments, then-Gov. James Thompson, a Republican, and state Treasurer Jerome Cosentino, a Democrat, renegotiated in 1988 and again in 1990, coming out with what Giannoulias called “one of the worst deals the state has ever agreed to.”

Comment by Just commenting... Tuesday, May 1, 07 @ 11:38 am
“Just commenting”, I’m sure Cosentino dropped the ball too. I’m not disputing that. But Alexi is following, what, 12 yrs of Topinka?

It’s the house that she left that Alexi has to be concerned about.

Comment by Not Surprised Tuesday, May 1, 07 @ 12:14 pm
Many of us who knew and supported Treasurer Giannoulias from the start knew he would be one of the best Treasurers in Illinois history.
We will be seeing many more good things in the future from this hard working and bright young office holder.
Keep up the good work Alexi, I know you will.

Comment by (618) Democrat Tuesday, May 1, 07 @ 12:17 pm
Any bets that Jay Hoffman (Blago’s downstate guy)has something to do with this?

Comment by If It Walks Like a Duck... Tuesday, May 1, 07 @ 12:21 pm
If the fox does a good job of watching the henhouse, that doesn’t change the fact its a fox.

Comment by Le Renre Tuesday, May 1, 07 @ 1:17 pm
There were two parallel deals — the Thompson Republican Cellini Ramada Renaissance in Springfield and the Democrat boss (Costello — the name escapes me) in Collinsville, sponsored by Cosentino

Both were set up as no lose deals for the owners. Both were dogs. I am surprised that Bond Counsel and the other attorneys involved in each could do it with a straight face.

The objective was to get the properties free and clear and leave the state with the interest payments.

Judy B walked into this nest of snakes when she became Treasurer. Each of the influence peddlers needed to be taken off the hook but she refused to be their sucker. Many reasons to not like Judy B, but this was not one of them.

Another strike against the self righteous governer, Big Jim Thompson.

Comment by Truthful James Tuesday, May 1, 07 @ 1:35 pm
There are actually Republicans wishing for the good old days of Gov. “Big” Jim Thompson!!! The Democrats liked him because he was one of them.

Comment by Lee Tuesday, May 1, 07 @ 2:08 pm
Many of us have wondered how hotels with high occupancy rates have managed to consistently lose money over two decades. Zounds! It’s time to name names.

Comment by Keyser Soze Tuesday, May 1, 07 @ 2:10 pm
i won’t claim to have known that alexi would “would be one of the best Treasurers in Illinois history,” since i can’t pretend to know who any of the other treasurers were. but it was evident from the beginning that alexi was capable of doing this job and performing at a very high level. i’d assume that madigan knew this, too — and that’s why he went after alexi with a vengence. alexi does illinois proud every single day; i’m glad when people notice…

Comment by bored now Tuesday, May 1, 07 @ 2:36 pm
I can’t believe they buried this bit, although there was certainly enough in there to keep me reading…

“Already, in the roughly three months of management, the hotel has turned a profit of almost $166,000.

That’s a drastic difference from the losses posted in the previous two years â€” almost $900,000 in the red for 2006 and $1.3 million for 2005. According to the report, the hotel is expected to net $1 million this year, not including about $300,000 in needed maintenance, to help pay off the loans.”

Yowza!

Comment by Just Saying Tuesday, May 1, 07 @ 3:31 pm
Actually, the taxpayers would already be rid of this mess had people listened to Topinka long ago. At least the state would have received something. At the end of the day, I suspect the investors will declare bankruptcy and the taxpayers will end up holding the bag.

Comment by Lincoln Lounger Tuesday, May 1, 07 @ 3:38 pm
I disagree Lounger. The hotel investors were wealthy to begin with. Why should Illinois taxpayers take a hit just because some buddies of Topinka and Big Jim wanted to weasel out of their obligations, especially when they are making even more money?!?

Comment by finally Tuesday, May 1, 07 @ 3:49 pm
I have supported Alexi all along and it is great to see others coming around. Alexi rocks!

Comment by Way Northsider Tuesday, May 1, 07 @ 4:43 pm
And to think that one of the major players in this stinking pile of crap also has been given the right to invest state employees pension money.

This just scares me to death!!!

Comment by Disgusted Tuesday, May 1, 07 @ 5:13 pm
Bored now makes a point. Is it possible that the Speaker opposed Alexi because he fears that Alexi will be Lisa’s toughest opponent in a possible 2010 governor race? I like him and I would vote for him — as long as Blagojevich isnt running again. While I like Alexi, I’m for Rod.

Comment by In my room Tuesday, May 1, 07 @ 6:47 pm
What is despicable is that the state loaned the money in the first place.

As long as utilizing public money to be a “banker” for your buddies is allowed, this stuff will happen.

Comment by Anonymous Tuesday, May 1, 07 @ 7:18 pm
Jim Thompson was just taking lessons from the Cellinis so he could qualify to sit on the board for Conrad Black.

Comment by Truthful James Tuesday, May 1, 07 @ 7:30 pm
Giannoulias has unbelievable instincts. He campaigned on investing the state’s money better, and although his opponents mocked his call for audits, he carried through and exposed corruption and lousy stewardship over state assets.

And for all of those that challenged his financial acumen and private sector experience, I hope the crow tastes good right about now. How great is it when someone who is extremely successful in the private sphere dedicates himself to public service, rather than the dregs who just can’t find a better job?

Comment by The Truth Tuesday, May 1, 07 @ 9:02 pm
Obama should have quit endorsing after he backed Giannoulias. Man, Giannoulias is making Obama look great!

Comment by John 3:16 Tuesday, May 1, 07 @ 9:13 pm
Wonder why no one has mentioned Gary Fears’ name. He was a rest stop inspector for Dan Walker.

Comment by Cal Skinner Tuesday, May 1, 07 @ 9:16 pm
So the Springfield hotel deal wasn’t the only one like this? This is the first I knew that the state made a bunch of these hotel loans… but these were the only two that never paid them back. Sheesh, what a mess.

Comment by 'Lainer Tuesday, May 1, 07 @ 9:16 pm
Don’t ya just love this. Here’s a politician who really means “no more business as usual.”

Comment by Little Egypt Tuesday, May 1, 07 @ 9:42 pm
I think there were three originally, the third being the Ramada in Mt Vernon (I think it’s a Holiday Inn now). By the way, I suspect that if anyone thinks the ownwers personal wealth is on the line here they are going to be sadly disappointed.

Comment by steve schnorf Wednesday, May 2, 07 @ 12:00 am
I was doubtful that Alexi would be anything but another Democrat Party puppet who would simply do what his Party leaders told him to do. As a Republican, I am starting to change my mind. We will see what the outcome of Alexi’s actions are and then I will decide if he should have gotten my vote. Otherwise, all of this “education” by Alexi of events long past without acting upon it is simply “entertainment”. Let’s see if his actions can get any of the bad guys thrown into prison for corruption and committing fraud upon the state of Illinois and it’s taxpayers and then I will be an Alexi fan.

Meanwhile, perhaps Alexi could ask Big Jim Thompson to serve on a Board to determine if a conspiracy to defraud the state of Illinois and it’s taxpayers took place back then. Big Jim comes highly recommended by Lord Black as being competent and an excellent person to serve as a Director on a corporate board.

Comment by Beowulf Wednesday, May 2, 07 @ 7:00 am
Right. Steve, as I pointed out in my mention of ‘no lose’ deals.

Comment by Truthful James Wednesday, May 2, 07 @ 7:33 am
What took you so long to come to the defense of the mob this time steve?

Comment by uncle timmy Wednesday, May 2, 07 @ 8:01 am