Back in the fall of 1998 I was a young (okay, young-ish) associate at Mayer, Brown & Platt (now Mayer Brown LLP), the Chicago-based law giant. One day a big partner invites me to that night’s Bull’s game to help entertain some clients in the firm’s skybox at the United Center.
I of course jumped at the chance since this meant a rare opportunity – and more importantly a valid excuse – for not doing what I normally would have been doing that year, working late on the mountain of paper required to consummate huge and enormously complex asset securitization deals. Fun stuff.
For the record, you simply can’t pass up a chance to watch any event in a skybox. In fact it’s difficult to go back and sit with the masses once you know about the dessert cart and other amenities.
That night I specifically remember someone asking me about George Ryan. This person, also a lawyer, knew I was a die-hard Republican and gung-ho for George who was facing off against Democrat Glenn Poshard that November.
“What about that licenses-for-bribes story?” that other lawyer asked me.
The gentleman was of course referring to a scandal which eventually would be known as Operation Safe Road. In 1998 the scandal was just starting to percolate, but that other lawyer was doing his homework. I was not.
I remember I said something like, “Oh that’s no big deal, don’t worry about it.”
I don’t recall adding Bruce Rauner’s now routine “that’s baloney” phrase – but I was in the same neighborhood.
How wrong I was.
Operation Safe Road turned into an eight year investigation and resulted in over 75 convictions, including the conviction of Ryan on 18 felony corruption counts in April of 2006.
Voters like me who didn’t do their homework and promoted a corrupt politician did a tremendous disservice to the state. And the Illinois GOP still hasn’t recovered from its decimation under George Ryan.
Well I learned my lesson. I’m saying never again.
I’ve done my homework this time. I may have read more court filings and related documents involving Rauner and his private equity firm GTCR than possibly all of the “real” reporters in this state combined.
Based on my due diligence on both men (in Ryan’s case, belatedly), I confidently say that George Ryan was a Sunday School teacher compared to Bruce Rauner.
Rauner is a walking conflict of interest and another scandal plagued administration waiting to happen. One need not be a lawyer to see it. All it takes is for someone to go beyond simply reading what he or she desperately wants to see in Rauner. Voters instead need to listen to the blaring alarm bells.
For whatever reason, much of the Illinois press decided not to seriously report on this race. One Chicago Sun-Times reporter who did, Dave McKinney, was punished by his boss, a chum and supporter of Bruce Rauner.
Chicago justifiably bills itself as a world financial capital. That makes it all the more disappointing that no one locally has ever provided serious analysis of Rauner’s pension fund activities. It took a private equity and pension expert from Forbes, an attorney and writer who lives in Florida, to finally give Illinois voters crucial information about the private equity business – and Rauner’s role specifically with worker pension funds.
That Forbes writer, Edward “Ted” Siedle, now has a series of three articles which are a must read in this race (here, here and here ). Unfortunately all were published just last week. But better late than never.
If you haven’t yet read that three part series in Forbes, you owe it to yourself to do so now.
My sense is that few reporters, and even fewer voters, are aware that Bruce Rauner is still a principal of GTCR. He gave up his chairmanship of GTCR to run for governor, but he remains one of just a few owners of the firm.
GTCR is where a big part of Rauner’s wealth is housed, and he’s given no indication that would change if he wins on Tuesday. In any case, his large equity interest in the firm is illiquid to say the least.
Rauner has declared he’ll have a “blind trust” – but such promises are meaningless to those of us who didn’t just fall off the turnip truck. Rauner knows exactly where GTCR’s money is now – and even if we believe he won’t be talking to his GTCR partners as governor – he has an excellent idea where his money will be four years from now as well.
Siedle’s Forbes trilogy identifies the unbelievable self-dealing and conflicts of interest that are rife in Rauner’s private equity business. We would of course know a lot more specifics if Rauner would release the schedules to his tax returns – but he refuses to do so and the press has barely pressured him.
But we already have one glaring example. Last week we reported that Rauner personally signed-off on using worker retirement savings entrusted to his control as part of an attempt to escape liability in his nursing home mess.
I see a lot of good people voting for Rauner because they think he’s “successful.” But these folks aren’t giving themselves enough credit. Anyone can make Rauner bucks. It’s actually quite easy IF you have access to huge pools of retirement savings belonging to others, AND IF you are willing to self-deal and have no problem exploiting conflicts of interest on a level and of a kind that most people with any sense of shame would not.
Rauner is accustomed to operating exclusively in the murky world of private equity where making heaps of money leveraging incredible conflicts of interest is routine. Through his private firm he’s largely avoided the kind of disclosure public companies are regularly required to provide to the U.S. Securities and Exchange Commission and other regulatory agencies. Rauner simply has no appreciation or preparation for the legal framework and restrictions he would be subject to as governor.
But anyone who has read any of my writing this year knows that I didn’t wait for the Forbes alarm. I knew Rauner was unfit for office back in January when we first broke the nursing home story.
Everything we’ve uncovered and reported on since then has only cemented my view. More…