Friday, June 27, 2008

Transportation jobs still in limbo

By Bethany Jaeger
The hype over moving an Illinois Department of Transportation building from Springfield to southern Illinois goes beyond the roughly 110 jobs at stake. It begs the question whether the administration will be sincere in following a statutory process for closing state facilities and whether politics will overshadow policy in the decision.

The governor announced this afternoon that he intends to move the department’s Division of Traffic Safety from Springfield to Harrisburg in Saline County. The press release says the move would save $12.8 million over the next decade, while allowing much-needed economic development in southern Illinois. Several local officials, on the other hand, argue that there are numerous options for cheaper office space in Springfield and no reason to move the workers, who travel throughout the state for their work, away from the centrally located city.

The governor made it sound as though the move was final, but there’s a process that must take place under state law before the state can close a facility. Skeptics don’t buy the logic and question the motivation. Whether politics or cost-savings are behind the move, it’s the process that deserves attention.

The public body in charge of overseeing that process is the bipartisan legislative Commission on Government Forecasting and Accountability. Dan Long, executive director of the oversight panel, says the State Facilities Closure Act is pretty clear: “No action may be taken to implement the recommendation for closure of a State facility until 50 days after the filing of any required recommendation.”

The administration has to file its recommendation to close the Springfield facility by July 1. That hadn’t happened by Friday morning, even though the governor officially announced Harrisburg would receive the IDOT Division of Traffic Safety shortly after. An IDOT spokesman said the intent is to file the necessary paperwork by the deadline. A public hearing has to be held, currently scheduled for July 31 in Springfield. Then the administration can’t actually close the Springfield facility for 50 days, which lands on September 11. The governor’s press release says the move would take six to nine months.

“If they’re acting already to move before the 50 days after the recommendation’s filed, I think it’s a violation of the act,” Long said. If that happens: “I suppose someone could go to court and challenge it.”

A legal challenge could come from anyone from the commission itself, to the legislators who serve on the panel, to the legislators who represent Springfield, to the public employee unions that represent the IDOT employees.

The American Federation of State, County and Municipal Employees Council 31 represents the 110 of the workers affected by the move, according to spokesman Anders Lindall. Management would remain in Springfield. Lindall said he won’t speculate about the administration’s intent but did say, “We’re troubled by the way this entire process has proceeded so far.”

He compared the move to previous attempts to close Stateville Correctional Center in Joliet and another correctional center in Pontiac. “What’s common to each of them is that it seems very clear that there’s no logic or planning or sound policy behind any of them. Whether it’s political or whether it’s meant as a threat, I don’t know. But I do know that we don’t think it’s appropriate for anyone to threaten people’s lives and livelihoods, to threaten their jobs. And that’s what’s happening here.”

One political undertone involves the ongoing negotiations between AFSCME and the administration. They have to agree on a contract that spells out the amount state employees make and the amount they have to pay for health care and retirement benefits for the next four years. Threatening any state employee jobs could be perceived as a threat to compromise — or else.

Another political undertone involves the legislators whose districts would lose the Springfield jobs. The move first was announced the day after Springfield Sen. Larry Bomke, a Republican, voted in support of a measure that would have allowed the public to decide whether to recall public officials, commonly seen as a swipe against Gov. Rod Blagojevich. Bomke said the motivation seems clear to him: Retribution for the recall vote.

“I don’t think [the governor] likes Springfield,” he said. “I don’t think Springfield cares much about him.”

But Bomke said he felt skeptical that the move will actually happen. “This governor has a tendency to make announcements and then not follow through. So I’m hopeful this will be another case of that.”

Rep. Rich Brauer, a Petersburg Republican, described the plan as an “ill-informed idea that should be dropped,” as it would move some data entry employees with disabilities away from their homes and potentially affect their health care options. But, he said, “Unfortunately, the process isn’t binding. It’s going to take public opinion to change the fact that he has a lot of leeway on where he wants [to station them] and the fact that state government is here in Springfield.”

The question is whether the process will work as intended. After the public hearing, the Commission on Government Forecasting and Accountability has to review the information gathered and issue a recommendation about whether to close the facility and move the jobs. The commission’s opinion, as Brauer pointed out, is not binding. The governor could still move the jobs. But in the past, the governor has followed the commission’s recommendations.

The governor’s press office did not return repeated phone calls or an e-mail.

Bomke said the governor has thumbed his nose at the law before (mainly in his push for health care expansions), and this time also would come with consequences. “If he does, then it gives us clear grounds to sue him,” Bomke said.

Would he do that? “Absolutely. In a heartbeat.”

Note: The State Journal-Register posted this article saying IDOT employees who don't want to move to Harrisburg would be offered same-level jobs within the agency.

Thursday, June 26, 2008

Campaign finance law ruled unconstitutional

By Patrick O’Brien
Candidates for federal office who are running against deep-pocketed opponents could face tougher odds after the U.S. Supreme Court struck down a key piece of campaign finance law today.

In north central Illinois, the race for Congress in the 14th District could be affected.

Jim Oberweis, the Republican candidate, already donated more than $1.7 million to his own campaign through the end of March. Oberweis previously self-funded his campaigns for elected office. The Sugar Grove resident runs a family-founded dairy company and an investment firm.

His opponent, Democrat Bill Foster of Geneva, donated more than $122,000 to his own campaign. Foster is a scientist who worked at Fermilab, as well as a businessman who helps run a company that makes theater lighting equipment.

The federal law previously allowed opponents who faced self-funded candidates to exceed federal limits for the amount individuals could donate to their political campaigns.

The 5-4 majority, represented by Justice Antonin Scalia, said the law “impermissibly burdens the 1st Amendment rights” of candidates to use their own money as political speech. Previous campaign finance laws also have been ruled invalid based on 1st Amendment arguments.

Not everyone agrees that the ruling automatically gives self-funding candidates a big edge, however.

“Regardless of how substantially a candidate self-funds, the voters still have to like what they’re hearing,” said professor Ron Michaelson, former director of the Illinois State Board of Elections. He currently lectures on campaign finance at the University of Illinois at Springfield.

He said he believes the “millionaires amendment” — part of the 2002 reform package sponsored by U.S. Sen. John McCain, this year’s Republican presidential nominee — was designed to limit the amount of money spent on federal political campaigns. He said it was a step in the right direction.

“I think it’s unfortunate. The amendment was an attempt to try to level the playing field,” he said.

The ruling likely will affect races for Congress only, as the amount of money needed to self-finance presidential campaigns is now in the hundreds of millions of dollars.

Michaelson cautions that voter resentment of candidates who may appear to be trying to purchase higher office may backfire.

The ruling, coupled with U.S. Sen. Barack Obama’s decision not to take $85 million in federal funds to limit his campaign’s spending in the presidential election, will bring campaign finance reform to the forefront this year, Michaelson said.

Obama defended his decision by saying the finance system was broken. He has said little during his campaign about reforming the system.

“If Obama’s elected, we’ll see how serious he is about the issue,” Michaelson said.

In another race for Congress ...
By Bethany Jaeger
Comptroller Dan Hynes endorsed Colleen Callahan, a Democrat, for the 18th Congressional District today in Springfield. At a press conference in the AFL-CIO building, Hynes said he supports Callahan, who is a longtime farm reporter for radio and television, in her race against state Republican Rep. Aaron Schock of Peoria. The district has long been held by Republicans.

Both Schock and Callahan say they grew up on farms and formed a hard work ethic. Schock has served on his local school board and represented the 92nd House District for two years, proving to be a strong political fundraiser. Three months ago, his campaign finance report shows he raised more than $1 million and had about $188,000 cash on hand. (See the report by selecting his name in this pull-down menu.) See more about Schock and his race against Callahan in the April Illinois Issues magazine.

Callahan has less money and says she has never worked as a public official, but she recently was named as one of 20 “emerging races” by the Democratic Congressional Campaign Committee. That doesn’t guarantee, however, that the national party will flood her campaign with financial support. She expects her June 30 campaign finance report to show about $250,000 in contributions and about $130,000 and $140,000 cash on hand, although numbers could change between now and June 30. See her March report by selecting her as a candidate.

“I am a candidate who didn’t just dip my toe in the water here. I went right to the high dive in my efforts to serve our district and our country,” she said this morning. “This being a new process for me, I was told at the beginning and am learning that typically, the national party money from either party doesn’t typically come until later in the campaign.”

“Money begets money,” she added.

By Bethany Jaeger
While in Springfield, Hynes also addressed the state budget or lack thereof and sent a letter to legislative leaders and constitutional officers outlining what would happen if they failed to enact a state budget by July 10, more than a week after the new fiscal year begins.

The General Assembly approved a budget that Gov. Rod Blagojevich says is unbalanced by about $2 billion. He threatened to cut $1.5 billion if the House didn’t approve two revenue ideas that already passed the Senate. Expect to find out in the next couple of weeks whether the governor will go through with the cuts or call legislators back in a special session in an attempt to force them to vote on new revenue ideas to plug the hole.

If revenue ideas failed and the budget remains unbalanced and unsigned by July 10, Hynes says, first, about 4,900 state employees would be in jeopardy of not getting paid on time. Tens of thousands more would be at risk the longer the budget remains unresolved.

Second, the state couldn’t pay its other bills that reimburse health care providers and other social service providers. Most people focus on the payroll because they have a deadline and a more tangible effect, Hynes said, “but every day we don’t have a budget, tens of millions of dollars don’t go out the door and don’t go into businesses all over Illinois, which has a real impact.”

He called on the governor to lead and the legislative leaders, particularly House Speaker Michael Madigan, to do what they should have done months ago and sit down together to negotiate an agreed budget. (The leaders did meet, and Madigan did send his majority leader, Rep. Barbara Flynn Currie, in his place.)

“We are now in a game of chicken,” Hynes said. “We are now basically in a staring contest to see who blinks first. And the ones who are going to get hurt in this contest are tens of thousands, if not hundreds of thousands of vulnerable, innocent people.”

Wednesday, June 25, 2008

Illinois targets mortgage lender

By Patrick O’Brien
Illinois is the first state to sue Countrywide Financial, the nation’s largest mortgage lender, for its role in the current foreclosure crisis.

The lawsuit, filed by Illinois Attorney General Lisa Madigan in Cook County today, alleges that the company used “deceptive practices” to lure borrowers into risky subprime loans with high interest rates. It also says the company “loosened the standards for selling its products,” ignoring whether prospective borrowers could repay the loan.

The suit says the company responded to signs that its mortgage business was unstable by making more risky loans and accelerating the practice of ignoring borrowers’ real financial situations.

The company’s practices were particularly harmful to Chicago and the surrounding counties, the suit says.

The Chicago area had the most subprime loans of any metropolitan area in the country, according to a 2006 study by the Chicago Reporter, an investigative magazine. And Countrywide held more of those loans than any other lender. The Chicago area also has one of the highest foreclosure rates in the country.

The attorney general also says her office has received more than 200 complaints about the company since 2005.

In early 2007, the company issued nearly $8 billion in risky subprime loans, which generally are given to borrowers with poorer credit histories and lower incomes than those given standard loans.

Countrywide’s promotional materials on its Web site tout the bank as a leading lender to those with “less than perfect credit.”

The company is currently the subject of lawsuits by former employees and customers, as well as a federal investigation.

Bank of America actually acquired the company in a $4 billion deal today, as approved by shareholders, and it has promised to tighten lending standards.

Countrywide did not return repeated phone calls.

State employee update
By Bethany Jaeger
The largest public employee union, the American Federation for State, County and Municipal Employees Council 31, is requesting a mediator to help bring closure to about 10 months of negotiations with Gov. Rod Blagojevich’s administration. The union represents about 35,000 state employees and held a massive rally in Springfield earlier this week, increasing attention that the union opposes a contract with the state if it were to increase the cost of employees’ health care and retirement benefits.

According to the union, the administration proposes a four-year contract that would do just that without a wage increase.

The existing AFSCME contract is set to expire June 30. The administration is not commenting on negotiations but confirmed AFSCME’s statement that the existing contract will remain active as a mediator steps into negotiations.

Anders Lindall, spokesman for the union, said the two sides first have to agree on the identity of the mediator, who would be an independent third party without a vested interest in either side. While mediators are common in other labor negotiations, Lindall said this is the first time in 10 contracts with the state that the union has had to request a mediator.

Tuesday, June 24, 2008

Tennis, anyone?

Gov. Rod Blagojevich wants legislators to come back to Springfield to fill an estimated $2 billion budget hole before he has to chop $1.5 billion from the version they approved before adjourning last month. Given that the new fiscal year starts July 1, the state needs an operating budget in place by July 11; otherwise, the first round of about 5,000 state employees would start missing their paychecks by about the 15th of the month, according to the state comptroller’s office.

But neither chamber wants to or plans to come back before the regularly scheduled fall session, according to spokespeople for the two Democratic leaders.

The governor announced this afternoon in Chicago that the ball is in the House’s court. You should be able to download the governor’s announcement here. Without action, he would be forced to reduce funding for major state functions, including higher education and social services. Employees would have to be laid off or not hired. (See a more detailed list below.)

Blagojevich said the General Assembly has never passed a budget this far out of balance. “Needless to say, I cannot sign this budget. For me to sign this budget would be lying to the people of Illinois. It would be like writing a check that I know would bounce.”

He added that he prefers not to veto the entire budget and require the legislators to start over. He would rather urge “shared sacrifice,” or ask state agencies to reserve spending about $500 million already approved. To avoid making $1.5 billion in cuts, he said he wants the House to OK the two revenue-generating ideas already passed by the Senate.

The Senate approved a $16 billion borrowing plan that would change the annual payments to the state’s five public employee pension systems and free up about $500 million. Senators also advanced a measure that would allow the governor to transfer about $500 million from dedicated funds to other state operations. Both measures stalled in the House.

Complicating the future of the pension bond deal is that it would require a three-fifths majority whether voted on now or in January. That requires at least some Republican support. Rep. Gary Hannig, a Litchfield Democrat and budget negotiator, says given that the House GOP rejected all budget bills this spring, they would be “hard pressed to get a majority.”

“I think that there’s a view that we really shouldn’t be selling bonds for the purposes of budget relief.”

In addition, the state’s contribution to all five public employee pension systems could start to back off in two years. For the fiscal year that starts July 1, the state was scheduled to pay about $2.7 billion. Next year’s payment would exceed $3 billion. But then the “ramp up” backs off. “I think most legislators sort of feel like, ‘We’re almost there, why don’t we just finish it?’” Hannig says.

House Democrats could have some more support for sweeping dedicated funds, although Hannig adds it might make more sense to vote on that idea in January. Not only would the legislation require fewer votes to pass, but also the economy by then could reveal a more accurate picture of state tax revenues. Until this fall, all revenue estimates are just that — a guess about what the economy will be doing a year from now, he says. It would be appropriate to consider fund sweeps as “kind of a mid-course correction.”

He puts the ball in the governor’s court. “Unless he calls special session, we simply aren’t going to come back. We don’t have a mechanism to come back that I’m aware of.”

For a special session to be convened, either the governor or both legislative leaders must call one, according to the state Constitution. That’s unlikely, given the questionable future of the revenue ideas in the House right now. And the Senate Democrats’ spokeswoman says it’s “absolutely not” the desire to call a special session.

Patty Schuh, Senate Republican spokeswoman, describes the governor’s announcement as a “non-event.” But the House’s response could be newsworthy. “We’re concerned that Democrats are setting it up for a tax increase in the fall,” she says.

That door is open. If the governor made budget cuts, Hannig says: “More likely we’ll come back to November and try to renegotiate some of those things. But we have to figure out, ‘What are our priorities?’ Because I don’t know that there’s enough money in sweeps that we can restore everything. So maybe we say we restore education. Or maybe we override him in education and say, ‘Now we’ll find the money.’”

Where they would find the money is the looming question.

Potential budget cuts
By Patrick O’Brien
Here’s a partial list of where the governor said he would have to cut without major revenue tactics approved by the House by mid-July:

Health care would be hardest hit, with a $530 million reduction in payments to Medicare providers, increasing the average wait for payment to 90 days. Nursing homes also would lose $55 million in funding for home care providers. And $260 million for social services, including funding for autism, people with all types disabilities and domestic violence victims, also would be cut.

Another $106 million in funding for veterans would include eliminating a 40 bed, $6 million expansion at the LaSalle Veterans Home. See more here.

Mass transit would lose $255 million, causing the state to end discounted fares for students and people with disabilities in the Chicago region and to eliminate state support for Amtrak.

School construction projects would be slashed $150 million. Education program cuts of $110 million, which are limited almost exclusively to higher education for financial aid programs for the neediest college students and education for nurses and pharmacists.

The anti-violence CeaseFire program again would lose $6.25 million. See more here.

Monday, June 23, 2008

Seven days

By Bethany Jaeger
Illinois starts a new fiscal year in seven days. That means some new state laws take effect July 1. But also, for the first time in history, many public employees could have to work without a contract in place with the administration. Four years ago, the state’s largest public employee union, the American Federation of State, County and Municipal Employees Council 31, negotiated a contract with the administration that spells out how much employees make and how much they pay for such benefits as health care and retirement.

This year’s negotiations between union officials and Gov. Rod Blagojevich’s administration have stretched about seven months, potentially creating the first time that Illinois’ AFSCME Council 31 won’t have an agreement in place before the existing contract expires. “That alone shows the level of contentiousness and the distance between the parties is unprecedented,” says Anders Lindall, union spokesman.

The lion’s share of the disagreement is health care, he says, but it’s complicated by the sagging economy. “It’s higher health care costs, higher pension costs, coupled with pay increases that don’t even keep pace. And at a time when people are being socked at the gas pump, they’re being soaked at the grocery checkout and everywhere else for higher cost of living, to have health care and to have pension funds going through the roof, it’s not acceptable. It’s not [the making] of a fair contract agreement.”

Negotiations continue this week after a few thousand union supporters rallied at the Capitol today. Neither the administration nor union officials would comment on what happens if the contract expires before they reach an agreement. They would only say they’re continuing “good faith negotiations” and are mindful of each other’s concerns.

Local union leaders and members gathered at the Capitol wearing green T-shirts and waving signs that said, “Governor, don’t cut our health care.” Marion Murphy, caseworker for the Illinois Department of Human Services, AFSCME Local 2806, is on the bargaining committee and spoke during the rally. She cited Blagojevich’s priority to ensure all residents can access quality and affordable health care. “But I guess he forgot about us,” she said. “Why should we be left out in the cold? He’s got the All Kids program, but what about our kids?”

The number of vacancies also repeatedly came up, including the speech by Louis Volpi, president of AFSCME Local 1591 and employee of Tinley Park Mental Health Center and Howe Developmental Center. He said during the rally that the administration refuses to fill vacancies even though workers are forced to work overtime, as required by their contracts. His statements reflect a situation I wrote about in Illinois Issues magazine this month. We're waiting to get the actual number of vacancies from the Illinois Department of Human Services.

The state budget approved by the General Assembly May 31 hasn’t made it to the governor’s desk for review yet, preventing the governor from acting on solutions to what his office says is a $2 billion gap between spending and revenues. The legislature has until June 30 to send it over. Steve Brown, spokesman for House Speaker Michael Madigan, said it’s normal for such a huge bill to take the full 30 days allotted by law to process the legislation.

By Patrick O’Brien
Also on July 1, some new state laws go into effect. A few examples follow. The full text of the laws and other information can be found at

Minimum wage
SB 1268 (of the 94th General Assembly) The state’s minimum wage rises to $7.75 an hour beginning July 1. About 650,000 Illinoisans will see an increase, according to the governor’s office. The raise is part of a gradual increase of the minimum wage to $8.25 an hour by 2010.

Teen driving
SB 172 (Starts in third paragraph.) Student drivers will have to complete at least six hours of actual, on-the-street driving with a certified instructor when a new law goes into effect next week. It’s part of a reform package enacted last year to address accident rates among teen drivers. This portion of law eliminates the provision that allows students in high-school driver’s education classes to take a written exam after completing three hours of practice driving. It also removes current exemptions that allow the use of driving simulators and driving ranges as a substitute for street driving.

Home care pay increases
HB 4144 State home health care workers who provide housekeeping services will earn $1.70 an hour more beginning July 1, and the law also provides an additional $1.33 per hour for health care insurance for the workers. The total cost to the state is $64 million.

Truth in towing
SB 435 Any towing service that tows or removes a vehicle with the permission of the owner or person in control of the auto has to provide an estimated cost of towing. The document must be signed by both the tow truck driver and the driver of the vehicle.

Thursday, June 19, 2008

More people on the move and Medicaid

Abby Ottenhoff, Gov. Rod Blagojevich’s communications director based in Chicago, is resigning. She’s the third high-level employee in the governor’s office to step down within a month.

Deputy Gov. Sheila Nix resigned this month and was replaced by Bob Greenlee, a former chief of staff and deputy director of the governor’s budget office. Springfield-based spokeswoman Rebecca Rausch stepped down to join a St. Louis-based public relations firm and is replaced by Brian Williamsen, a former TV reporter in Springfield and in South Carolina.

Ottenhoff said in an e-mail that she plans to take some time off to travel and visit family and friends before returning to the professional world. She’s spent five years as the governor’s spokeswoman and previously was an aide to House Speaker Michael Madigan.

She’s replaced by Lucio Guerrero, deputy assessor at the Cook County assessor’s office since 2006. He also was a reporter, writing for the Chicago Sun-Times and its affiliate, the Post-Tribune in Indiana. He also worked for newspapers in Delaware and Florida, according to the governor’s office.

Transparency troubles
By Patrick O’Brien and Bethany Jaeger
The state auditor general’s office had a hard time getting timely and accurate fiscal information about a $1.2 billion Medicaid program overseen by the Illinois Department of Healthcare and Family Services, according to an audit released this week.

Meanwhile, the state is pursuing federal approval to implement a similar but larger Medicaid program that reimburses hospitals caring for the most needy patients.

The audit notes “untimely and inaccurate submission” of records regarding the program, referred to as a hospital assessment because hospitals pay a tax and then get back $3.6 billion from the federal government over three years. Those reimbursements were delayed last year as part of political infighting, but state officials agreed to borrow money to secure federal matching funds and pay hospitals last fall (see more here by scrolling down).

The problem, according to the audit, was a discrepancy over the appropriate way to record the complex transactions of the hospital assessment program. The audit also notes that the department delayed the reporting process by hiring private consultants, which eventually agreed with the auditor’s findings.

Annie Thompson, spokeswoman for the department, said hiring external consultants on such a complicated, $1.2 billion program is routine. Director Barry Maram also wrote in a letter to the auditor general: “Our overall concern is that a misinterpretation could be made that the assessment liability is a strain on state resources, when in fact there was no strain but instead a net gain to the state.” The department agreed with many of the auditor’s other findings.

The department previously has been criticized for “deficient” accounting practices, as noted by previous audits (here and here) and by Comptroller Dan Hynes. Regarding the most recent audit, Hynes said in an e-mail Thursday: “Accuracy and timeliness of fiscal information from state agencies is a critical concern affecting the state’s ability to produce official financial statements that portray the state’s fiscal profile and creditworthiness. That process is potentially jeopardized by the conditions noted by the auditor general.”

As for the future hospital assessment program, which is pending federal approval, the plan’s structure is more important than some bookkeeping concerns, said Sen. Dale Righter, a Mattoon Republican. “We don’t want to give the federal government excuses to deny the assessment. It is troubling.”

Wednesday, June 11, 2008

Summer heats up

Consider the context of a memo sent to Illinois Democratic candidates and incumbents that talks about beginning impeachment proceedings against Gov. Rod Blagojevich:

  1. The Illinois General Assembly adjourned on the constitutional deadline of May 31 with an approved but unbalanced budget.
  2. The operating budget is not set in stone, meaning state employees could be strung along this summer, as they were during last summer’s stalemate between leaders that resulted in 30-day budgets to keep the state operating.
  3. As lawmakers officially adjourned the spring session and left Springfield, they entered campaign mode to gear up for the November elections.

That campaign mode produced this memo, distributed by House Speaker Michael Madigan, who also is head of the Illinois Democratic Party. Madigan sent it to political candidates as “talking points” to give them background about impeachment-related questions that they can expect to hear from voters and reporters.

The 14-page memo reads as if the speaker has been marking every wrong step the governor has made since Day 1. And it advises candidates and incumbents to blame the governor for all of the state’s problems, although all four legislative leaders and the governor play a role in the political standoffs that affect state business.

The governor's office obviously wasn't pleased. It released this statement: "This is another example of the pettiness, silliness and backroom games that Speaker Madigan has been playing for months to prevent progress. We wish he would drop his behind-the-scenes maneuvering and come to the leaders' meetings. It is time for Speaker Madigan to join the rest of the legislative leaders who have been working with the governor to pass a capital bill that will put thousands of people to work."

The memo also advises candidates to say the speaker had nothing to do with their statements about impeachment. Steve Brown, Madigan’s spokesman, said that the memo intended to make it clear that the speaker is not going to take a position on impeachment. “He expects that he might be called on to be presiding officer if something proceeds, ” Brown said, but the memo also is intended to specify that neither Madigan nor his daughter, Illinois Attorney General Lisa Madigan, is involved.

House Minority Leader Tom Cross described that directive as a “scheme” for candidates and incumbents to lie to the press and to the public. “It’s funny how — and ironic that — trust is an issue. People keep throwing that word around; yet, this very document sets up a scheme to lie to all of us,” Cross said before a leaders’ meeting in the governor’s Chicago office this morning. (Because I’m based in Springfield, I listened to the Chicago audio available from Capitol Fax Blog.) While Cross said the memo wouldn’t necessarily distract from the ongoing negotiations for a state construction plan, he did say, “It’s just another part of the ping pong battle that is ignoring true needs of the state.”

Senate President Emil Jones Jr. also said it was a distraction from the need to enact a statewide construction plan.

Senate Minority Leader Frank Watson’s comments, however, sounded a bit more in tune with the intent of the memo. “We get a lot of questions from people throughout the state about the impeachment, so I don’t know if it was improper to send that out to candidates who are running for office,” he said, as heard through the Web. “They get a lot of questions, too. ‘What do you think about it?’ This just gave some answers. It might be something that we want to do because we do get a lot of questions, more and more all the time.”

Some points in the memo raise serious questions about whether the governor’s actions have negative consequences for the state, particularly the questions about federal investigations into his administration and about his intent to bypass the legislative process to advance an agenda. It also is useful for candidates, lawmakers, members of the public and reporters to understand the process of impeachment before legislators determine whether that’s the course to take.

So far, though, the impeachment memo only is framed as a political cheat sheet for candidates who wish to distance themselves from the governor. It does not mean the House will initiate proceedings to actually impeach the governor. At the same time, the speaker did say on the last night of the spring session that his legal counsel has done his own research to be “prepared.”

Wednesday, June 04, 2008

Rezko's guilty verdict affects many

Tony Rezko is immediately headed to jail after a jury found him guilty on 16 of 24 counts of federal corruption charges, including mail fraud, wire fraud and money laundering. He will serve time until his sentencing, scheduled for September 3.

The Wilmette businessman was a top fundraiser and unofficial adviser to Gov. Rod Blagojevich, who was mentioned in the 13-week trial as “Public Official A” but who has not been charged with any wrongdoing.

This will be the gift that keeps on giving for those who oppose Blagojevich, and it will have widespread implications for the governor, the state legislature and federal prosecutors.

For starters, Rezko’s guilty verdict damages the governor’s credibility when he says he wants to “improve” recently approved ethics legislation, says Kent Redfield, political science professor at the University of Illinois at Springfield and director of the Sunshine database for campaign contributions. He says the verdict heightens the chance that legislators would override any changes the governor makes to the ethics reform. (See more here.)

The verdict also makes it more likely that legislators will continue to talk about impeaching the governor. The state Constitution gives the Illinois House the power to investigate impeachment, which already has started behind the scenes to “be prepared,” said House Speaker Michael Madigan last week during a Statehouse news conference. “We’ve already done research on impeachment. Our attorney, Mr. [David] Ellis, is chock-full of conclusions.” The Senate would have to approve an impeachment by a two-thirds majority.

Even if no impeachment trial unfolds, Redfield says the Rezko verdict damages the governor’s credibility and makes him weaker politically, as more people could be willing to take him on or ignore him.

It also could get worse legally. The guilty verdict gives federal prosecutors, led by U.S. Attorney Patrick Fitzgerald, leverage when trying to negotiate with Rezko to see if he’ll cooperate with ongoing investigations involving the governor’s administration and political campaign. “They really weren’t going to convict or decide whether or not to indict the governor based on these specific convictions,” Redfield says. “This gives them leverage along with the other charges that Rezko hasn’t even been tried on yet to try and see if he’s willing to make a deal.”

Rezko received two different indictments on the same day in October 2006. The first, which led to today’s verdict, linked him to an intricate scheme of so-called pay-to-play politics between 2001 and 2004. He was found guilty on some of the charges that he collaborated with at least five other people to use political clout to influence two high-powered state boards, allowing him to collect illegal fees and force political campaign donations. But the jury found Rezko not guilty on one of the most serious charges of attempted extortion, or illegally acquiring extra money from a company seeking to do business with the state.

The second indictment made allegations of business fraud involving a pizza franchise. Redfield says prosecutors could use those allegations to pressure Rezko to cooperate before the trial of Chistopher Kelly airs some more dirty laundry this fall. Kelly, a close Blagojevich friend and former campaign manager, was indicted in December 2007 for tax fraud by allegedly hiding more than $1 million of income over five years.

Prosecutors’ case against Rezko relied on one of the governor’s appointees, Stuart Levine, as the star witness. Levine pleaded guilty to mail fraud and money laundering in October 2006, but his testimony during Rezko’s trial revealed long-term drug abuse and an unreliable memory. Fitzgerald said in a Chicago news conference, seen from media coverage available on the Web, that he would not comment on Levine, as he could be a witness in other proceedings.

Rezko’s attorneys intend to appeal, according to news accounts.

The governor held a Chicago news conference later this evening. Here's the statement we received from the governor's office and the statement Blagojevich read during the news conference:
Tony Rezko is a friend and was a supporter. On a personal level, I am deeply sad for what has happened to Tony. I am profoundly sad for his children and his wife Rita. My heart goes out to all of them. The jury’s decision is yet another reminder that ours is a system of government that is ruled by laws, and not by men. I respect the decision made by the jury. As for me, I will continue to get up every single day to work as hard as I possibly can for the people. Tomorrow I will meet with the legislative leaders so that we can balance the budget in a way that is fair and helps people. And I am working on passing a capital bill that will stimulate our economy and create more than 500,000 jobs.

Perspective piece

First, Illinois Issues magazine has a new Web site! It's exciting because we're able to post audio, video, slide shows and discussion boards. We're continuing to improve it, but we hope the new site serves as a portal to the resources citizens need to make their own decisions.

Second, take a break from Illinois politics and consider this. Today marks the 19th anniversary of a historic student movement in China, where a communist government cracked down on student protesters in what's called the Tiananmen Square massacre. The country has been gradually changing ever since, and one of our own former reporters offers perspective on the evolving political culture from the Chinese point of view and from the American point of view.

Wen Huang is from China and participated in the 1989 student movement, but he now lives in Chicago as a journalist and author. It's also interesting that he started his journalism training the United States as a Public Affairs Reporting graduate student at the University of Illinois at Springfield, and he interned for Illinois Issues magazine in 1990-1991. We feature him in the June magazine (the article is in print only).

Shortly after we sent the magazine to the printer, devastating earthquakes struck China. Huang wrote a personal essay about the China earthquake published in the Chicago Tribune in mid-May. He shares thoughts about how the country's response to the devastation completely differed from its response to a 1970's earthquake. According to Huang, China's communist leadership back then tried to cover up news about the damage to avoid foreign aid — they feared western interference within the country. The leadership's response this time around demonstrates a much more liberated and open form of government. “As much as I feel saddened by the earthquake, I take great comfort in the realization that China is no longer what it was in 1976,” Huang writes.

His words relate to the book he recently translated, The Corpse Walker, which is a collection of interviews that reveal how China's political transitions affected ordinary citizens. It was written by Liao Yiwu, who was at the epicenter of China's earthquake last month.

Huang pulled together some notes about Liao and e-mailed them to us. He included some of Liao's own diary entries about the earthquake, which we share here:

By Wen Huang
Writer Liao Yiwu lives outside the city of Chengdu near the epicenter of the earthquake in Sichuan province. His home is about 17 miles from Dujiangyan, the hardest hit area where hundreds of children were trapped in a school. When the earthquake hit, he managed to run out of his apartment. Fortunately, his building didn't collapse though there are several giant cracks in the concrete stairway. For three days, as his area was threatened with aftershocks, Liao says he stays in an empty building without power and plays flute to pass the time.

Since most of the people he has interviewed for the book live in the epicenter, Liao has tried to contact them and he has not been successful. LIao said he feels guilty that he survived the earthquake but thousands of others have been killed. He wished he were there to help or at least to record the stories of survivors and rescuers. On Saturday, May 18, Liao managed to travel to the very epicenter, trying to see if he could help. He said the area has been cordoned off. But Liao managed to interview some survivors...He hopes to interview more survivors and have their stories published.

According to Liao, the government has done a good job in their rescue efforts. The fact that the government TV is now broadcasting news of the earthquake 24 hours non-stop has been reassuring. Liao is keeping a journal about the effects of the earthquake on his life and the lives of others. Here are some short excerpts:

Monday, May 12
I had just stepped into the residential compound, leisurely walking to my building. Suddenly, the earth under my feet began to shake, like a person suffering from epilepsy. The trees looked like a party of young people shaking their heads under the influence of herbal ecstasy. Because I was undernournished when I was a child, my brain is somewhat damaged - I am slow in responding to my surroundings. Initially, I didn't realize it was an earthquake until I saw that every building in my compound was vibrating.

I felt like a helpless child who has been suddenly tossed onto a swing. Then the speed of the swing accelerated to the point I couldn't stand still. I knelt on one leg and found myself sandwiched between two tall buildings. I struggled to get up, turned around mechanically, and ran away from the building as fast as my legs could carry me. Soon, I was followed by a crowd who had dashed out from different buildings … everyone was dazed and scared.

The epilepsy outburst lasted from two to three minutes. Then it stopped and things calmed down. I found myself surrounded by people, including my girl friend, who had run out of our 5th floor apartment.

About ten hours later, I contacted my sister Xiao Fei. She was trapped inside a seven-story office building in downtown Chengdu. The picture frames and artworks in her office were strewn on the floor, shattered. She said she felt like she had been tossed around inside a violently shaking colander. My writer friend Ran Yunfei was taking a nap at his 8th floor apartment. He was thrown off his bed. Then he ran out without any clothes on, dragging his quilt along behind him … Thank heavens, my family and my friends have made it through …

I feel guilty that I survived. As I watch those babies and students being pulled out from the debris, I want to cry. I wish I could be there helping, or at least recording their desperate cries and hear the stories from the brave rescue workers…

May 14, 2008
Most residents are still sleeping in tents outside the building. The aftershocks have been non-stop. I decide to take the risk and stay in because I'm afraid of the cold pouring rain, I hate the aimless wanderings and the possible prospect of an epidemic.

Power has been restored. I've been glued to the 24 hour news broadcast from the local TV station. A report about the situation in Qingcheng reminded me of Master Dengkuan, an abbot that I interviewed in 2003. His temple is only seven or eight miles away from Qingcheng. The TV reported that nearly all the residential houses in that region have been leveled. There is no mention of the thousand-year-old temple, which is built next to a mountain? The abbot suffered so much throughout his life. Before his passing in 2005, he had spent a decade restoring the temple. I hope the temple remains intact.

I also thought of the professional mourner. I interviewed him over ten years ago. He didn't even leave me his contact information because he never had a permanent home. If he were still alive, he would be in his 80s. If he is alive, I wonder if he has survived this disaster? His band used to travel between Beichuan and Jiangyou counties, where thousands of people have been killed during the past week. He spent his whole life crying and playing suona at other people's funerals. What's going to happen to him now?

Sunday, June 01, 2008

We have a budget, but no construction plan

By Bethany Jaeger and Patrick O’Brien
The state will continue to operate with some funding increases for education and human services, but schools and transportation districts across the state will continue to wait for state funding for badly needed construction projects. The Illinois General Assembly wrapped up business for the spring session and isn’t scheduled to return until November, but all are waiting to find out whether the governor will call them back to Springfield to address a capital program.

The last day of regularly scheduled session had some surprises, some predictable outcomes. But it leaves a lot of questions. Here are a few examples of what the legislature did, what it did not do and where we go from here:

What the legislature did:
The House and Senate approved a $59 billion operating budget that could spend about $1 billion more than the state could collect in revenue next fiscal year, which starts July 1. Legislators will leave it up to Gov. Rod Blagojevich to cut programs and projects to get closer to a balanced budget.

The GOP in both chambers rejected the budget for being out-of-balance crafted solely by Democrats. “The ironic thing is you’re going to have the governor be the adult in the situation,” said House Minority Leader Tom Cross during floor debate.

The budget as approved also would increase funding for higher education and human services, including pay for home care workers. It does not improve the Medicaid payment cycle, meaning many doctors could continue to experience cash flow problems as they wait an average of 70 days for state reimbursements.

Both chambers also approved free mass transit rides for some individuals with disabilities, a follow-up to the governor’s initiative to add free rides for seniors as part of a deal to save Chicago-area mass transit from cutting services. And downstate mass transit districts finally are expected to receive the increase in state funding that helps them pay operating costs, which also was promised but never delivered as part of the Chicago-area mass transit deal.

Also, as we mentioned this morning, both chambers sent an ethics reform package to the governor that would ban state contractors from donating to officeholders who let the contracts.

What the legislature did not do:
While House Democrats agreed to let the governor decide how to carve out the budget, they rejected a long-awaited capital program because many of them don’t trust the governor to divvy out the money as promised.

House Speaker Michael Madigan, who held a rare 35 minute news conference after the House was about to finish business, said the governor’s leadership style is one “which brings on conflict and confrontation rather than conciliation.” He said the operating budget limits the way the governor can spend money, but the capital plan wouldn't guarantee the governor would release the funds promised.

What’s next for the capital plan?
The capital plan ballooned to a $34 billion proposal by the Senate, and the longer it’s delayed, the more likely it is to keep increasing in cost. It has expanded and retracted countless times in the past few years. This time, negotiators, led by former U.S. House Speaker Dennis Hastert and Southern Illinois University President Glenn Poshard, did a lot of homework to select the funding sources and the projects that were most agreeable to all parties, but the scope of the plan required a lot more revenue than previously discussed. So the revenue ideas multiplied from creating one new land-based casino in Chicago and expanding positions at the nine existing riverboats to creating three new gaming facilities, expanding gaming at existing riverboats and allowing slot machines at horse tracks. The plan also would bank on a fourth new riverboat when the state’s long-dormant 10th gaming license is cleared of legal troubles. The plan is massive. And it’s controversial.

Now that the House Democrats shot down the opportunity, most legislators look to the November session. Delaying the capital plan does four things:

First, it allows legislators to wait until after the November elections to take a tough vote on a controversial funding source, such as gaming or, gulp, taxes. The speaker said, in general, one of the first places he’d look for more state revenue is an increase in the state income tax. “It’s the fairest tax. If you make money, you pay the tax. If you don’t, you don’t pay the tax.”

And in fact, the speaker said the biggest problem with recent attempts to approve a capital plan is that legislators don’t want to accept the tough choices. “My position is there should be a construction program, but it’s going to require some people to do something which is going to carry some pain. They’re not going to be applauded when they vote for a fee increase or a tax increase.”

He wouldn’t offer any alternative revenue sources tonight, “but we’re open,” he said.

Second, a delayed capital plan waits to find out the results of the federal corruption trial against Tony Rezko, a former insider to the Blagojevich Administration. The longer legislators delay a capital plan, the closer it gets to the end of Blagojevich’s term.

Sen. Dale Risinger, a Peoria Republican, described why he thinks those who want to wait contribute to the ballooning of the next capital program: “We get near the end of the Blagojevich Administration, so there will be some people who say, ‘Well let’s just wait until we have a new administration and see which direction we want to go.’ Unfortunately, with the inflation, the cost of construction goes up. And a couple more years of deterioration of our infrastructure means the program has to be that much larger the next time, which makes it even harder to do.”

Third, it risks losing future federal matching funds. The feds already earmarked about $9 billion for the state, but Illinois hasn’t committed its share. The longer the state waits to put forward the match, the less competitive it gets in securing highway funds in the next federal transportation bill.

Where do we go from here?
We wait to find out whether the governor will call legislators back before November to address a capital plan.