School Districts, Residents Bear Some Responsibility for Lyons Township Troubles

So who’s to blame for the problems at the Lyons Township School Treasurer’s Office?

We have a few thoughts, but first, here’s a primer for those unfamiliar with the situation:

The treasurer’s office is a small but important government agency that manages more than $200 million in taxpayer money on behalf of more than a dozen school districts in the west suburbs. Recently it came to light that the treasurer for the past two decades, a politically connected appointee named Robert G. Healy, who reports to an elected three-person board, improperly cashed out unused sick, vacation and personal days to the tune of more than $500,000. Not only is Healy accused of doing this without informing the board, it wasn’t clear how many off-days he was entitled to because he’d ordered his staff to stop keeping track of his comings and goings.

In addition, the BGA found Healy’s investment strategy severely lacking. He hired cronies to invest and monitor taxpayer money, and they in turn donated money to a campaign fund he runs.

The BGA also raised questions about whether investment advisors were charging higher-than-normal fees, and putting taxpayer money in investments that violated the agency’s own policies – as well as state law. (One investment in an international bond fund – which apparently was not allowed – lost about $200,000.)

Healy ended up resigning, as did one of the three elected trustees, and now the board pledges to crack down and get a handle on the finances, among other things verifying that no money is missing. The affiliated school districts, including Lyons Township High School District 204, are getting nervous. This is, after all, their money, and there’s a lot of it in the hands of the treasurer’s office.

So we ask again, who’s to blame for things getting this far afield?

Healy is an obvious target. He’s a political animal, with little formal training in the financial sector, and it seems mistakes were made on his watch, though he insists he acted appropriately.

But who was watching him? Not the board elected to manage the agency and follow the money. Members had little or no financial experience either, and they gave Healy virtual free rein.

Outside consultants – some still on the payroll – apparently didn’t notice any serious problems.

In some ways the participating school districts (and by extension the residents of those districts) are just as culpable as everyone else, if not more. It’s their money, and they haven’t been watching over it – except in District 101, an elementary system in Western Springs, where board member Marty Brown spotted irregularities and raised alarm bells with the BGA and others.

Getting back to District 204, the big dog in the western suburbs.

After the BGA and CBS2 published a story about the treasurer’s office troubles, Huffington Post republished it with a photo of Lyons Township High School. We then fielded a snippy voicemail from a district official who was apparently irked about the connection of possible scandal to the school.

Too bad, there already is a connection: District 204, like the treasurer’s office board and most of the other school systems, was asleep at the switch and didn’t do enough to keep tabs on taxpayer money.

Perhaps school districts should worry more about preventing future troubles and – God forbid, once in a while show up at the treasurer’s office board meetings – rather than worry about their perceived image.

Let’s hope there’s not any money missing, that bad accounting and questionable investment decisions are fixed and not repeated. And let’s hope the public officials and residents in Lyons Township learn something from this situation – that paying attention can pay dividends, in every sense of the word.

This blog post was written and reported by the BGA’s Robert Herguth. He can be reached at rherguth@bettergov.org, or (312) 821-9030.

Advertisements

Leave a comment

Filed under Townships

Bloomberg News: Feds Falling Down on FOIA

Bloomberg News, an international finance and political information service, found that major U.S. federal government agencies are too slow or are outright failing to comply with Freedom of Information Act requests.

Here’s the story.

 

Leave a comment

Filed under Around the Web

Next in Line: Illinois Targets Tollway Abuse

The Illinois Tollway Authority is following the lead of some other big states.

In finding a new way to crack down on drivers who repeatedly fail to pay their tolls, the Tollway Authority recently announced plans to start filing lawsuits against the worst tollway offenders.

Illinois hopes to recoup a large chunk of nearly $300 million in overdue fines and unpaid tolls owed by scofflaws.

Other states are on the same road.

Texas, for instance, which began suing the biggest deadbeats in July. Since then, the Lone Star State has had over 1,200 people enter repayment plans.

In May, Washington state created a tollway court that handles 250 cases a week and, so far, 1,300 people have paid off their back tolls.

The city of Denver is now threatening to withhold vehicle re-registration unless scofflaws make good on their outstanding tolls.

Illinois says more than one million violation notices are outstanding, and over 500,000 drivers have unpaid violations.

That sounds huge but it actually represents less than 2 percent of the tollway’s daily drivers.

This post originally aired as a Weekend Watchdog report on WBBM Newsradio 780 and 105.9 FM WBBM.

Leave a comment

Filed under Word on the Street

Mayor’s Office Employee Arrested Twice For Allegedly Soliciting Sex

When Chicago Mayor Rahm Emanuel holds a news conference, Gene Mc Neil is the city employee who makes sure the sound system runs smoothly.

But the veteran city employee was a little too smooth with the ladies, police reports indicate.

Mc Neil was arrested twice since 2005 for allegedly soliciting undercover cops who were posing as prostitutes. One of those arrests came while he was on the clock for taxpayers, he acknowledged.

Mc Neil, 55, was not convicted in either case; the arresting officers didn’t show up for some reason, so the cases were thrown out, court records show.

Reached just before a mayoral news conference a few weeks ago, Mc Neil said the arrests were misunderstandings. He said he was simply in the wrong place at the wrong time.

In 2005, Mc Neil was arrested for allegedly soliciting oral sex for $10, court records show. In 2007 he allegedly offered $25 for sex, records show. In the second instance, Mc Neil relayed to us that he was on the clock and en route to buy a newspaper when a woman approached him on the street and starting walking with him.

Referring to the Chicago Police Department, he said, “I understand they’re trying to get their numbers up. . . . I didn’t make any overtures.”

Whatever the truth, it’s interesting to consider Mc Neil’s proximity to a politician known for such a carefully crafted image.

When asked about Mc Neil, an Emanuel press aide said this was the first she heard of his troubles. But within an hour, word came down that Mc Neil was being transferred to other duties, at least for the time being.

Mc Neil, who’s been on the government payroll for 25 years and worked for Richard M. Daley as well, has a salary of about $84,000 a year.

This blog post was written and reported by BGA Senior Investigator Patrick Rehkamp. He can be reached at prehkamp@bettergov.org or (312) 386-9201.

Leave a comment

Filed under Investigations, News

Lansing’s Last-Day Largess for Retirees

Taxpayers are left holding the bag as Lansing leaders give pay hikes to cops and firefighters as they retire – prompting pensions to soar. Read more…

Leave a comment

Filed under Pensions

Stepping down, then stepping up in Stickney

Cody Mares quit his position as trustee with the Village of Stickney earlier this week just before a board meeting. He then was appointed head of public works at the meeting. This isn’t sitting well with several other trustees who suspect politics and friendship are trumping experience.

“Nobody in their right mind would place him there,” Trustee Fred Schimel told the Better Government Association, referring to Mares. The appointment – which came with little advance notice from Village President Dan O’Reilly, a political ally of Mares – “blew my a– away.”

Schimel walked out of the May 15 public meeting in frustration because of the situation.

O’Reilly, whom the BGA and FOX Chicago News previously reported was using village funds to buy flowers from the flower shop he owns, appointed Mares, then cast the tie-breaking vote to make it official.

“He’s a journeyman carpenter, he’s well qualified to lead maintenance workers,” O’Reilly said in defense of his pick. “He’s one of the best trustees I had.”

O’Reilly said the salary for Mares’ new position hasn’t been set but the previous guy made about $70,000. Trustees are paid roughly $7,000 a year.

Mares wouldn’t say why he was leaving the village board, but indicated he was “tired of politics.”

Stickney might be best known as home to a vast waste-water treatment plant.

Turns out the facility, located near Stickney’s Village Hall, is not the only thing making folks hold their nose in town.

This blog entry was written and reported by BGA Senior Investigator Patrick Rehkamp. He can be reached at prehkamp@bettergov.org or (312) 386-9201.

Leave a comment

Filed under Suburbs, Transparency

Before the Fall, Cellini Firm Feasted on Fees

It would appear that William Cellini’s reign as a state powerbroker is over, especially since he’s probably headed for jail.

That’s in sharp contrast to a few years before his conviction last November in federal court of extortion conspiracy and soliciting a bribe. At that time, the real estate investment firm he ran was flush with tens of millions of dollars in fees provided by the Teachers Retirement System (TRS) of Illinois.

Cellini’s Commonwealth Realty Advisors received $30 million between 2001-2010, the Better Government Association found.

It was Cellini’s influence on the state’s largest public pension fund that helped lead to his downfall. Cellini was convicted of scheming to pressure a co-owner of investment firm Capri Capital in 2004 to make campaign contributions to then-Gov. Rod Blagojevich in return for Capri’s managing some TRS investments worth $220 million.

Federal authorities have alleged in court documents that Blagojevich insiders Tony Rezko and Christopher Kelly were also part of the scheme to force Capri to make payments to the ex-governor’s campaign fund.

The plot backfired when Capri co-owner Tom Rosenberg, a Hollywood producer whose films include “Million Dollar Baby,” refused to give money to Blagojevich, according to court documents.

Rosenberg threatened to go to the authorities.

To try to prevent that from happening, Cellini, Rezko, Kelly and TRS board member Stuart Levine decided Capri should get the $220 million investment stake anyway. But they vowed to use their influence to block Capri from receiving future state business, federal authorities alleged in court documents.

In October 2008, a federal grand jury indicted Cellini on charges of conspiracy to commit mail fraud, extortion conspiracy, attempted extortion and soliciting a bribe.

Cellini was subsequently convicted in federal court, where Rosenberg was a key government witness.

Cellini’s family still has property and business interests in Springfield and downstate, so a comeback for the resilient political powerhouse is always a possibility.

But that’s a long shot: Cellini faces up to 30 years in prison and his firm, Commonwealth Realty, has closed. His sentencing is scheduled for June 15.

This blog entry was reported and written by BGA Investigator Andrew Schroedter, who can be reached at (312) 821-9035, or at aschroedter@bettergov.org.

Leave a comment

Filed under Fiscal Issues, Investigations