STUMP » Articles » The Undeniable Corruption of Chicago (and Illinois): Some Followup on Brian Hynes » 20 March 2019, 06:10

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The Undeniable Corruption of Chicago (and Illinois): Some Followup on Brian Hynes  

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20 March 2019, 06:10

So, last month, we had a bit of a kerfuffle over the corruption of aldermen in Chicago, and one named bubbled up: Brian Hynes.

The posts:

The Undeniable Corruption of Chicago and Illinois: part 4 – Unpaid Vendors Program

Chicago and Illinois Corruption Followup: Lawsuit Involving the Unpaid Vendors Program

There’s some new coverage from the Chicago Tribune:

The consummate political insider linked to the burgeoning City Hall corruption probe

Ali Ata had just been subpoenaed in the intensifying corruption probe of the Gov. Rod Blagojevich administration in 2005 when he got a call from a young, well-connected attorney who said he had a message from on high.

The caller was Brian Hynes, a close friend of businessman and political fixer Antoin “Tony” Rezko. With a federal noose tightening around Rezko’s neck, Hynes asked Ata, the head of the Illinois Finance Authority, to meet him at a restaurant in Greektown.

“(Hynes) told me that he was aware that I was served a subpoena, and I’ve been a good team player and should continue to do so,” Ata testified at Blagojevich’s first criminal trial in 2010.

When asked what he thought Hynes meant, Ata said it was clear: “That I should not cooperate,” he testified.

Now, nearly a decade and a half after that meeting, Hynes has surfaced in another potentially far-reaching federal investigation — the City Hall probe that has already ensnared two powerful Chicago aldermen, Daniel Solis and Edward Burke.

A longtime lawyer and lobbyist, Hynes, 48, is a consummate Chicago political insider who has associated with some of the state’s most powerful people over the years, including Illinois House Speaker Michael Madigan, Blagojevich and his wife, Patti, and the family of the Rev. Jesse Jackson, according to court records and other public information reviewed by the Tribune.

So there’s lots more details in the story.

The Tony Rezko connection is interesting.

TONY REZKO: A REFRESHER

Now, I notice I did not blog much about Tony Rezko in the past, mainly because my focus has been on pensions and not government corruption more generally.

Tony Rezko had been a real estate guy in Chicago, and evidently worked his connections with kickbacks, etc. He had his fingers in various pies til he got found out. From the Wiki article:

Public corruption charges
In October 2006, Rezko was indicted along with businessman Stuart Levine on charges of wire fraud, bribery, money laundering, and attempted extortion as a result of a federal investigation known as “Operation Board Games.”1112 Levine was once a top Republican fund-raiser who had switched loyalty in recent years.13 Rezko and Levine were charged with attempting to extort millions of dollars from businesses seeking to do business with the Illinois Teachers System Board and the Illinois Health Facilities Planning Board from 2002 to 2004. Levine pleaded guilty and agreed to testify against Rezko and others. While the charges carry a maximum sentence of life in prison, Levine expects to receive about a 5-1/2 year sentence in return for his testimony.14 The case was prosecuted by Patrick Fitzgerald.

Rezko pleaded not guilty, and the trial related to his charges from Operation Board Games began on March 6, 2008.15 He was jailed shortly before the trial began when he received a $3.5 million wire transfer from Lebanon. Rezko had told the court that he had no access to money from overseas. Ten weeks into the trial, on April 18, Judge Amy St. Eve released Rezko, after friends and relatives put up 30 properties valued at about $8.5 million to secure his bond. Prosecutors opposed the motion for release, saying that Rezko was a flight risk.16 On May 6, both the prosecution and the defense rested their cases. Government prosecutors spent 8 weeks presenting their case. Rezko’s lawyer, Joseph J. Duffy, chose not to present any witnesses, saying that he did not believe that the prosecution had proven the charges.17 Prosecutors contended that they had shown Rezko’s “corrupt use of his power and influence” to gain benefits for himself and his friends. Duffy argued that the prosecution had exaggerated Rezko’s influence in state government, and attacked Levine’s credibility as a witness.18

The case went to the jury on May 13 and after three weeks of deliberation, the jury found Rezko guilty of six counts of wire fraud, six counts of mail fraud, two counts of corrupt solicitation, and two counts of money laundering, but found him not guilty on three counts of wire and mail fraud, one count of attempted extortion, and four counts of corrupt solicitation.19 According to CBS News the “high-profile federal trial provided an unusually detailed glimpse of the pay-to-play politics that has made Illinois infamous.”20

2006 was before I had started pension blogging anywhere, and Rezko evidently got out of prison in 2015. Hmmm.

Unsurprisingly, Rezko had loads of connections to a variety of Chicago and Illinois politicians, including Obama.

From one of my earlier posts:

Oh, and do you remember Tony Rezko?

‘Alderman Burke’s power is such that he can ignore the rules in the City Council. For example, Barack Obama’s friend, neighbor and financial supporter, “Tony” Rezko, knew to go to Burke for results. In October 2007 the Chicago Sun-Times asked,

‘“Why did Ald. Edward M. Burke vote to approve Tony Rezko’s plans to develop the South Loop’s biggest piece of vacant land even as he [through his law firm] was working for Rezko on that same deal?

“‘Burke says: I forgot to abstain.”
….
‘So let’s see if we have this straight: Burke forgot to invoke a rule against himself based on a clear conflict of interest between his role as a voting alderman on a project while also providing legal services to a bidder. The project involved $140,000,000 in city money.’

That reminds me of a Steve Martin routine. [the “I forgot” excuse when not paying taxes]

But my point isn’t so much that Burke has an iffy past (hey, maybe it’s just that Chicago color), but that there’s no way anybody could have gotten very far in Chicago politics without knowing Madigan, Solis, and Burke… not to mention the Daleys. They all know each other.

Nobody got anywhere in Chicago politics without being sent.

So, duh, Hynes knew Rezko and had dealings with him. Same for Solis and Burke.

VENDOR PROGRAM

I want to come back to the vendor program:

In 2010, Hynes formed what’s become by far his most lucrative venture — Vendor Assistance Program LLC — with Solis’ sister, Patti Solis Doyle, a top Democratic operative who was a senior adviser on Barack Obama’s 2008 presidential campaign, records show. Doyle is no longer affiliated with the company.

When it was started, VAP had its office at the same address as Ald. Solis’ 25th Ward headquarters, records show. The firm has since made millions of dollars by fronting money to state vendors and later collecting interest owed by the state — profits that have accelerated since the state’s budget impasse was resolved in 2017.

Over the last nine months of 2018, the comptroller’s office issued more than $133 million in late-payment interest penalties to VAP, according to state records and testimony at a recent state hearing.

So…if the budget impasse was solved, shouldn’t that mean Illinois vendors get paid on time? Why would there be all these late payment interest penalties to pay, hmmm?

Why exactly are these guys having even higher profits?

So… the vendor “assistance” people know they’ll get paid in a reasonable time (at those guaranteed high rates)… but the vendors aren’t? Do I have that correctly?

Oh, I know, vendors need the cash now, but if the budget impasse was solved, shouldn’t the state be paying its bills in a timely manner?

Of course, I know that just because they got a budget doesn’t mean they really budgeted enough, and they’re still promising payments to vendors (especially for services) that have to be delayed because they actually don’t have enough money. But because of Dems owning everything now in Illinois government, those who ha,ve the luxury of waiting for cash flows can rest secure that they have a fairly high guaranteed rate of return.

CHICAGO AND ILLINOIS STORIES

Thought I’d drop some stuff of interest – about Chicago and Illinois in general (not necessarily corruption.)

And a tweet to leave on:


Heh.


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