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Obscure Board Spawns Illinois’ Biggest Scandal PDF Print E-mail
Commentary/Politics - Illinois Politics
Tuesday, 13 July 2004 18:00
The scandal of the year is not about Jack Ryan’s sex life. It’s about an obscure little state board that appears to have gotten completely out of hand. You’ve probably never heard of the Illinois Health Facilities Planning Board, at least until recently. It was formed a few decades ago to keep health-care costs low by preventing hospitals from providing the same costly services and treatments as nearby rivals.

For years, rumors of corruption have circled around the board. If you wanted to get your hospital built or expanded, you had to hire a specific lobbyist, a particular construction company, and a certain bond house.

Turns out, those rumors might have been true.

The scandal broke after Edward Hospital got tired of the shakedowns. The hospital was attempting to expand and was told in no uncertain terms that it had to hire financial giant Bear Stearns and Kiferbaum Construction or it would be a no-go. When the hospital did as it was told, its applications were approved. When it didn’t, the board turned thumbs-down.

Eventually, hospital officials agreed to wear a wire for the FBI, and they allegedly caught some influential Illinois insiders saying some really stupid things.

There was some hope last year that the board would be cleaned up. Governor Rod Blagojevich asked for, and received, permission from the General Assembly to appoint all new members, ostensibly to stop the corruption left over from George Ryan’s tenure.

Instead, Blagojevich re-appointed people such as Stuart Levine as vice chairperson. Levine, a major Republican donor, was allegedly caught participating in at least one shakedown scheme with Bear Stearns honcho Nicholas Hurtgen and Kiferbaum owner Jacob Kiferbaum. (Blagojevich also appointed Levine to the Illinois Retired Teachers’ Pension Board.)

Blagojevich also re-appointed Bernard Weiner, a close George Ryan friend who, with his son, made more than a million dollars in commissions from selling insurance to the hospitals he regulated.

The governor appointed Thomas Beck as the board’s chairperson. Beck’s son works for Bear Stearns, and Beck himself has received “finder’s fees” from the same firm, but Beck didn’t abstain from voting on projects involving Bear Stearns.

Last August, Blagojevich appointed Dr. Michael Malek to the board, just two weeks after Malek forked over a $25,000 contribution to the governor’s campaign fund.

One of the governor’s top campaign fundraisers, Chicago businessman Tony Rezko, recommended the appointments of several of the board members, according to the governor’s spokesperson. Rezko has placed lots of top people in the Blagojevich administration, including the director of the Illinois Department of Commerce & Economic Opportunity.

According to a federal whistleblower lawsuit filed by Edward Hospital, Nicholas Hurtgen of Bear Stearns told hospital officials in January that “he was politically connected to the Illinois state government administration and can ‘get things done.’ [Hurtgen] stated he was ‘responsible’ for Bear Stearns being awarded the state of Illinois’ ... $10-billion pension-underwriting deal.” The lawsuit also alleges that a kickback scheme was connected to the pension-bond deal, which Governor Blagojevich pushed through the General Assembly in 2003.

Last year, when the governor’s $10-billion pension-bond bill passed, Tony Rezko was listed as a lobbyist in a firm with National Republican Committeeman Bob Kjellander, who reaped an eye-popping $800,000 fee from Bear Stearns after the deal was closed. Kjellander subsequently removed Rezko from the lobbyist list, explaining that he had long ago ceased to do business with him. Kjellander, however, has never explained what he did to earn that fee.

Neither Rezko nor Kjellander has ever been accused of wrongdoing. I’m not even sure who the real insider was in all this. Most of George Ryan’s old pals (those who aren’t in jail, at least) have shown an astounding ability to adapt to the changing times, hiring the new governor’s friends as their lobbyists and consultants, and worming their way into Blagojevich’s good graces.

For instance, mega Blagojevich fundraiser Chris Kelly worked to pass the pension-bond bill with former Bear Stearns managing partner and Republican insider Peter Fox, who employs longtime Blagojevich pal Paul Rosenfeld as his lobbyist and who brought the allegedly corrupt Nicholas Hurtgen to Bear Stearns and owns a company with Hurtgen’s wife that is now doing a ton of state construction business. Get all that? There’s lots more, but I’m running out of room.

The governor needs to clean up his own house, or somebody is going to the Big House.

Rich Miller also publishes Capitol Fax, a daily political newsletter. He can be reached at (http://www.capitolfax.com).
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