Illinois in financial trouble. Too many old people.

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The Civic Federation’s Larry Msall

Every time the Illinois General Assembly assembles, which isn’t all that often, there will likely be a story about how Larry Msall of the Civic Federation says that the state’s financial collapse is near.

And that retirees are the reason.

Larry Msall will inevitably be described as head of a tax watchdog group. First of all, beware of groups claiming to be watchdogs.

I have a watchdog. His name is Ulysses and if a stranger comes to our house uninvited he will bite ’em in the ass.

Exactly who is the uninvited stranger that Larry Msall and the Civic Federation are on the watch for?

Apparently it is poor, working people and retirees. The uninvited strangers are us.

The Civic Federation is just one more lobby group looking out for the state’s corporate interests.

Msall is always invited to appear on WTTW’s Chicago Tonight as an impartial observer. Along with the Republican stink tank, the Illinois Policy Institute’s John Tillman

Msall is not impartial.  He’s the former VP of the Civic Committee. A corporate mouthpiece.

Let me ask you this: Is there a retired teacher, cop or state healthcare worker on the board of the Civic Federation?

Greg Hinz today reports on CAFR.

The state’s Comprehensive Annual Financial Report.

Illinois is not doing well.

Well, of course not. We’re taxing the rich too little. Corporations are given tax loopholes the size of a Florida sinkhole. And they’re cutting promised benefits to retired public employees. That takes millions out of the state’s economy.

But that is not the analysis of the Civic Federation’s Larry Msall.

The disclosure clearly represents bad news, said Laurence Msall, president of the Civic Federation, a tax watchdog group. “There’s no other position a reasonable person can hold other than that the state’s financial position continues to decline, despite the income-tax increase.” The rising deficit is being driven by increased retirement costs, both for pensions and retiree health care, Mr. Msall said.

The problem is old people.

Just too many old people.

Illinois is not too broke to give Exelon a handout.

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Illinois is broke cry the corporate Civic Committee CEO’s when they dine over their three martini lunches.

Illinois is broke explains Ty Fahner as he secretly meets with the bond rating agencies that then go and lower that state and city ratings, putting pressure on the legislature to cut promised public employee pensions.

Which is what the legislature does, as in Senate Bill 1.

But when a giant billion dollar company runs into trouble with their profit margins, they eagerly run to the state for a handout.

And Senate President John Cullerton and House Speaker Madigan eagerly meet over three martini lunches to map out the plans to give them the handout.

Exelon is the state’s largest power company.

Exelon Corp. is laying the groundwork with state leaders for legislation next year that the company says may be necessary to keep half its Illinois nuclear fleet from closing.

Company executives and lobbyists have told lawmakers and other interested parties that three of the six nukes Exelon operates in Illinois are at risk of shutting down because they’re unprofitable or struggling to make money. Exelon representatives say the current market environment doesn’t reward the facilities for the environmental and reliability benefits they provide.

Exelon officials have met with Senate President John Cullerton. And CEO Chris Crane met in recent weeks with Illinois House Speaker Michael Madigan to brief him on the problems.

“It was about market conditions and the impact on the nuclear fleet,” Madigan spokesman Steve Brown says. “There was no request made.”

Right.

Ford CEO Alan Mulally. Stealing gold fillings from the mouths of pensioners.

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Ford CEO, Alan Mulally.

Every time an Illinois Ford employee receives their paycheck and looks at the state income tax deduction, they probably don’t know that those dollars are going into the pocket (figuratively) of FORD CEO Alan Mulally.

Because of tax credits by the pension busting Illinois General Assembly Ford is one of nine giant corporations that gets to keep the state income tax they collect from employees.

And you ask why is Illinois broke.

Mulally is one of the top ten paid CEO’s in the United States.

On a recent appearance on Steven Colbert’s show:

An exuberant Colbert described Mulally as “an icon of American capitalism.”

The CEO played straight man to Colbert’s quips about the power of a Mustang to attract the opposite sex and his labeling of General Motors and Chrysler as Bolsheviks for taking government assistance in 2009 when they filed for bankruptcy.

Mulally’s attempts to take the high road included an explanation that the best way to help now-bankrupt Detroit is by hiring people and bringing work back to America.

Colbert’s solution: pulling out the gold fillings of pensioners.

You’re too late Colbert.

He already does.

Nine Illinois corporations get to collect employee income taxes and keep what they collect.

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Crain’s graphic.

Hyde Park Democrat Barbara Flynn Currie blames retirees for the pension crisis. We agreed to a benefit and then when she and her House colleagues didn’t pay the bill, we didn’t vote her out of office.

Maybe she has a point.

Here’s another reason to throw her out of the House.

Nine Illinois Corporations get to collect – through payroll deduction – employee income taxes.

And they get to keep what they collect.

Motorola, Sears, Chrysler, Navistar, Mitsubishi, Continental Tire, Ecolab, Champion Labs and Ford.

The tax loop hole has cost the state nearly half a billion dollars over the past decade.

Chicago BOT chief, Patrick Arbor. “My word is my bond.”

Thirty-year tax cheat and former head of the Chicago Board of Trade, Patrick Arbor (2:49 on the video).

“My word is my bond,” says former Chicago Board of Trade President Patrick Arbor.

We will get back to Patrick Arbor and his words in just a few minutes.

But first a quick mention of Archer Daniel Midlands, the industrial food giant that is trying to heist millions of dollars in tax breaks from Illinois taxpayers by threatening to move out of state from their Decatur headquarters. This is a bold move on the best of days, since ADM doesn’t pay any taxes now. But they want to pocket, seriously, the payroll deduction that their employees would ordinarily pay to the state in income taxes.

“Why not,” asks ADM? “Illinois has done it for other giant corporations for years.”

And ADM has a point.

“We certainly are aware of the incentives that have been offered to other companies. We’ve done our research,” said ADM spokeswoman Victoria Podesta. “I think it creates precedent. I think precedent is important.”

Tate & Lyle moved its headquarters to Hoffman Estates after receiving a deal for $15 million in incentives. The Sears deal included about $100 million for that company and the corporation that runs the Chicago Mercantile Exchange and the Chicago Board of Trade after it, too, threatened to leave Illinois.

Ah, yes. the Chicago Board of Trade.

And its former president, Patrick Arbor.

Pat is involved in a nasty divorce case. As a result of court testimony, Arbor has admitted to being a monster tax cheat for over 30 years.

His Board of Trade cheated legally.

But not its president, Patrick Arbor.

Arbor has fled the country and is living in Italy. He is threatened with arrest if he steps foot in the U.S. again.

The Sun-Times’ Mark Brown:

A Cook County judge issued a new bench warrant on Tuesday for Arbor, 76, a pal of many politicians including former Mayor Richard M. Daley, as well as a business and civic fixture still listed as a trustee at Loyola University.

Crain’s Shia Kapos:

In the court papers, Mr. Arbor disclosed that he has $13 million in a structured account that’s held in a foundation in Lichtenstein but with assets in the Bank of Frey & Co. in Switzerland. (The two countries border each other.)

He also says, in the document, that a safe he had in his Water Tower Place home had $400,000 in gold, worth about $1,700 a piece, as well as $80,000 in Euros and $90,000 in U.S. dollars. He accuses his ex-wife of taking the contents of the safe.

Ms. Vigilante testified that “the marriage was dependent on him giving me access to his e-mails and phones because I suffered from a significant amount of infidelity with him.”

During testimony, Mr. Arbor acknowledges using his grandparents’ last name of Mazzoni on his Swiss accounts. Her lawyers questioned him about his intent to buy a home outside of the U.S., and he acknowledged looking at properties all over the world, including Italy, Moldova, Kiev, Switzerland, the Ukraine and Panama. He denied he intended to buy.

Mr. Arbor says when he worked at London Investment Trusts earlier in his career, he put $8.5 million in a London bank.

Asked by his lawyer whether he reported that to the federal or state government for income tax purposes, Mr. Arbor said, “I did not, sir, because, as you know, major corporations in the United States like Apple and Google do not report on monies made offshore.”

Mr. Arbor details having to spend extraordinary amounts of money on jewelry for his ex-wife. “She was obsessed,” he said during testimony.

He didn’t reveal to her that he had any offshore accounts until he agreed to pay 17,000 euros ($23,000) for a necklace in 2009. They saw it while at a jewelry store in Capri.

Illinois may be broke. But one percent of its people sure aren’t.

Illinois is broke? Cut teacher pensions and give millions to Archer Daniels Midland.

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Remember the phony front group that Civic Committee president Ty Fahner set up called Illinois is Broke?

He wanted you to think the state was broke because of huge pensions to teachers, firemen and cops.

Y’know. That $43,000 a year average teacher pension is a real budget buster.

Meanwhile Archer Daniels Midland, the giant food processing corporation is leaving job-starved Decatur, Illinois. But not before asking for millions of dollars in tax breaks from Illinois.

House Bill 380 has been scheduled for a hearing in Chicago Tuesday and could wind up on the agenda for the state Legislature’s six-day fall session that begins Oct. 22.

The measure sponsored by Rep. John Bradley (D-Marion) would retool the state’s EDGE tax credit, giving ADM a 15-year credit to be applied against payroll withholdings involving up to 200 employees.

The legislation also would grant the company a 10-percent break on its utility taxes for a 30-year period.

Sun-Times:

The state shouldn’t fast-track “unprecedented” legislation to give Archer Daniels Midland tax breaks possibly worth “tens of millions” of dollars to locate a new global headquarters in Chicago, a lawmaker representing the firm’s Downstate base said Monday.

In the first sign of legislative turbulence for the ADM package, state Sen. Andy Manar (D-Bunker Hill), whose district covers Decatur, said he has had “countless conversations” with constituents “angered” by ADM’s recent announcement to move as many as 200 jobs out of Decatur.

“Now, only eight days later, there is legislation moving in the House of Representatives to give ADM tens of millions [of dollars] to potentially stay in Illinois and move to Chicago. Not so fast. Illinois is facing tough times. Decatur is facing tougher times with the highest unemployment rate in the state,” Manar said in a prepared statement.

Says the Herald-Review:

At the same time Illinois lawmakers are expected to debate a plan to strip retirement benefits from teachers, prison guards and university employees, they also may take up a proposal to deliver tax breaks to one of the state’s biggest corporations.

The in box. Honoring contracts. Avoiding litigation.

The Chicago Tribune published my last letter to the editor on June 19, 2013—-I am going to try again.  I sent the copy below to the Chicago Tribune
Metra negotiated a separation agreement for CEO Alex Clifford that carries a potential price tag of $740,000.  Clifford’s three-year contract was due to expire in February 2014 (eight months from now).  The term that interests me is CONTRACT.  The Metra board has chosen to honor Clifford’s contract with a sum of money nearly three-times Clifford’s annual salary.  The action was taken “so that Metra can move forward with a clean slate and avoid wasting time and money on attorneys.”  There has been no suggestion of “contract reform.”  Take heed legislators in Illinois, public servants in the state of Illinois are in the same position as Clifford.  Honor our contracts (pensions) make any “pension reforms” to future servants.  Follow the Constitution of the state of Illinois and Metra’s lead, and save time and money that will be wasted on attorneys’ fees. Our pensions need to be honored NOT reformed.
– Cathleen Bylina, Retired Teacher

Congresswoman Schakowsky “is not going to talk on the record” about public employee pensions.

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I have been puzzled of late by the silence of Chicago north side and north suburban Congresswoman Jan Schakowsky on the issue of the state’s public employee pensions, including teacher pensions. Many of these employees live in her congressional district, of course.

Democrat Schakowsky has made much of her defense of Social Security and Medicare in Congress.

How ironic it is then that the Democratic Party organization in her district, of which she is the de facto head, is leading the charge against public employee pensions in Springfield.

These pension bombers would include Senator Dan Biss and Representatives Elaine Nekritz and Robyn Gabel.

So I called Congresswoman Schakowsky’s legislative office here in Chicago (773 506 8342) and spoke with her assistant, Leslie Combs.

I explained that I wanted to write a post about Congresswoman Schakowsky’s views on the current pension fight. I had heard that she had concerns about the direction the issue was headed. But I had not seen or heard anything directly from the Congresswoman.

Ms Combs said she would get back to me.

That was on Friday.

On Saturday, this message was left on my voice mail by Ms Combs:

“Given she’s not an expert on the topic in the state, she not going to talk on the record on this issue. She going to look at your blog – she’s very eager to do that.”

I’m glad to get another reader, of course. But that was not the intention of my call.

She’s not an expert of public employee pensions in the state?

Really?

I tried getting back to Ms Combs and left a message on her voice mail earlier today.

Was that really what the Congresswoman wanted me to go with?

Because Congresswoman Schakowsky did go on the record. 

Her office said that she was not an expert on public employee pensions in Illinois and that she would not go on the record.

She went on record that she would not go on the record about an important public policy issue for her constituents.

As for being an expert?

Become an expert.

I had to.

The public employees in her district had to.

I haven’t heard back from Ms Combs.

Just another day in Bizarro Word.

Illinois is broke. No money promised to teacher retirees. But $35 million more for those connected to the Chicago Democratic Machine and their patronage charters.

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Rahm and UNO Boss, Juan Rangel.

UNO’s Juan Rangel and Alderman Danny Solis’ patronage army get millions from their charter school scams.

Their latest multi-million dollar “soccer academy” skimmed millions from the state with millions more to come.

If Illinois is broke, here is why.

Reports the Sun-Times:

UNO’s insider contract deals go beyond the Soccer Elementary Academy. Records show the companies that benefitted from the 2009 state grant to UNO have included:

 ◆ D’Escoto Inc., owned by Federico “Fred” d’Escoto, whose brother Miguel d’Escoto holds the second-ranking post with UNO and was the city of Chicago’s transportation commissioner under former Mayor Richard M. Daley. D’Escoto Inc. has been paid more than $1.5 million so far, mainly for overseeing construction management on all of UNO’s state-funded projects. Miguel d’Escoto’s son, Miguel T. d’Escoto, works for d’Escoto Inc.

UNO hired d’Escoto Inc. without seeking other bids, Rangel says, because the firm provided the sort of services that government agencies often contract for based on merit rather than price alone. “I trust that they are looking out for our interests,” he says. “I’ve known the d’Escotos for decades. Fred’s reputation is impeccable.”

 ◆ Reflection Window Co., owned by Rodrigo d’Escoto — another brother of Miguel d’Escoto. It stands to make nearly $10 million for work on all of the UNO schools built with the grant money. Reflection was paid about $6.7 million for work on the Soccer Academy Elementary and Galewood schools, and it has a contract for about $3.1 million for work on the high school that’s under construction.

 ◆ Aguila Security, which was run by Manuel Acevedo and Joe Acevedo — brothers of state lawmaker and longtime UNO ally Edward Acevedo — during the time the company provided “site security” for UNO on the Soccer Academy Elementary project.

 ◆ Toltec Plumbing, owned by Virginia Reyes, whose brother Victor Reyes was a top mayoral aide during the Daley administration and also headed the now-defunct Hispanic Democratic Organization. Victor Reyes was UNO’s lobbyist when it landed the 2009 grant, and his law firm is doing zoning work for UNO that will be paid for out of the state grant money, according to Rangel.

◆ Windy City Electric, which has ties to Ald. Edward Burke (14th) and was banned from working on City Hall contracts after city officials determined that brothers Anthony and John McMahon operated the company in their wives’ names to obtain millions of dollars from city contracts set aside for businesses owned and operated by women. Windy City was paid $1.67 million for work on the Soccer Academy Elementary’s construction.

Anthony McMahon is a top precinct captain for Burke, a longtime UNO backer whose Southwest Side ward is home to five of the charter network’s schools. Burke’s daughter-in-law has worked for UNO since 2009.

In 2010, Rangel endorsed Burke’s brother, state Rep. Daniel Burke (D-Chicago), when he narrowly won a Democratic primary fight against a Hispanic challenger.

 ◆ The law firm of Chico & Nunes, headed by attorney Gery Chico, who has done zoning work for UNO and been paid with money from the state grant.

 ◆ UNO JaMS, a not-for-profit “social enterprise” initiative of UNO that provides janitorial services at its charter schools.

 Democratic and Republican lawmakers alike voted to approve the grant for UNO almost four years ago. Rangel says he was surprised at how much money UNO got from Springfield.

“Did we think we could get $98 million? No,” he says. “But we shoot for the moon. We asked for $100 million.”

Rangel says UNO — which also is getting about $67 million from Chicago Public Schools this year to run its schools — will seek more state money to build new schools.

Though the city is weighing whether to close underused public schools, he notes that UNO’s schools are in neighborhoods on the Southwest Side and Northwest Side where public schools are increasingly crowded because of the fast-growing number of Latino students.

 “What people don’t understand is we’re talking about different communities,” he says. “In our community, there are too many kids and not enough schools. Our parents won’t agree to busing their kids to where [underused] school buildings are.”

 After the new Soccer Academy High School is complete, Rangel says UNO will have $15 million left from the 2009 grant — not enough to build another new school. So UNO is asking Springfield for another $35 million.