Skip to comments.Gov. Blagojevich's donations and deals raise eyebrows (In 2005? The rookie Hussein had no idea...)
Posted on 12/13/2008 9:01:37 PM PST by Libloather
Gov. Blagojevich's Donations and deals raise eyebrows
Analysis of political contributions and state contracts spurs questions from critics who recall pledge to end 'business as usual' in government
January 30, 2005
BY CHRIS FUSCO Staff Reporter
Contractor Robert C. Blum gave Gov. Blagojevich's campaign $124,000 in cash and a $100,000 loan.
Now he's on the receiving end.
Two construction firms owned by Blum, a friend and business associate of Blagojevich's fund-raising chief, Christopher G. Kelly, have been awarded nearly $25 million in state contracts since July. They include a $24.4 million deal to build a Chicago State University convocation center named in honor of state Senate President Emil Jones (D-Chicago), a top Blagojevich ally.
There's nothing illegal about the contributions or the contracts for Blum's companies, Castle Construction Corp. and MBB Construction Group. Castle underbid seven companies for the Chicago State job, beating out its closest competitor by a $185,000 margin.
Both Blum and the governor's office say his friendship and business ties to Kelly in no way could have influenced the bidding. Kelly's commercial roofing company leases part of Blum's construction yard in Markham and, until January, was involved in a joint roofing venture with Blum at O'Hare Airport.
The state's Capital Development Board "awards contracts without discretion based solely on the lowest filed bid," Blagojevich spokeswoman Cheryle Jackson said. All bids "are sealed and then they look at the lowest bid."
Still, disclosure of the Castle-MBB contracts, part of a Chicago Sun-Times analysis of political contributions and state contracts under the Democratic governor's reign, is raising new questions from good government advocates and Blagojevich critics who recall his pledge to end "business as usual" in state government.
'Cause for real concern'
They also could draw attention from Attorney General Lisa Madigan and Cook County State's Attorney Richard Devine, who are probing whether Blagojevich's fund-raising operation traded contributions for appointments to state boards and commissions ï¿¯ï¾¿ï¾½ an allegation leveled but then recanted by Blagojevich's father-in-law, Chicago Ald. Richard Mell (33rd), under threat of a defamation suit from Kelly.
"These instances are cause for real concern," said Jason Gerwig, spokesman for the Illinois Republican Party. The Castle contract "should send a red flag up to [Madigan and Devine] as they're looking at this."
At the very least, the governor's prolific fund-raising reinforces a pay-to-play perception that has dogged Illinois politics for years, said Cindi Canary, executive director of the Illinois Campaign for Political Reform. Donations of more than $2,000 by individuals and $5,000 by political action committees per election cycle are prohibited under federal campaign law, but no such contribution limits exist for campaigns for state office.
"You've got an administration that came in with an announcement of 'no more business as usual,' " Canary said. "The public will look and say, 'How is this different?'
"The only way I can see this is different is in its scale, which is larger."
The Sun-Times looked at 20 firms that have given a combined $925,500 to the governor's main political fund, Friends of Blagojevich. The money, which has helped the governor build up a $10.2 million war chest, came mostly from the companies themselves, but some of it also came from executives and employees.
All told, the 20 companies have been paid or are under contract for more than $365 million in state work under Blagojevich, according to the state comptroller's records.
The firm that did the most state business, about $138 million, was Wexford Health Sources of Pittsburgh, which provides health care services at state prisons. It gave $28,000 to the governor through itself and an affiliated firm, Bantry Group Corp.
In one case, a firm that has given $20,000 to the governor and is owned by a member of one of his transition-team committees did no state work until after Blagojevich took office, records show. During the last two years, Electronic Knowledge Interchange has won $6 million in technology consulting and software development contracts.
Dan Shomon, a spokesman for EKI, said the company never was pressured to give to the governor.
"EKI has been a strong supporter of Gov. Blagojevich, who has taken a progressive view of state government when it comes to doing business with minority-owned firms," he said. EKI is owned by Robert Blackwell Jr., who is black, and Diego Ferrer, who is Hispanic.
Kelly denies link
Castle and MBB also stand out. Not only did they contribute the most to Blagojevich, but they're closely linked to Kelly who was adamant that his fund-raising work for Blagojevich includes no pay-to play incentives.
"People support the governor because they believe in what he is doing," Kelly said in a statement. "They support his efforts not to raise taxes, to improve our education system, to lower the cost of health care, and to streamline government. And above all, I believe they appreciate his willingness to fight for things he believes in."
"There's no relationship at all" between Blum's contributions and contracts, he said. State work "has been an avenue that Castle pursued prior to any Blagojevich administration. It just happens we were the successful bidder on this project that we would have bid on anyway regardless of what governor was in place."
Castle and MBB hadn't done any state work since 2001-2002, records show, but Blum said that's a function of state budget constraints.
"I don't think we bid more than two or three [state] jobs in 2003," he said, adding that he has been bidding on state work for 15 years. "This is not an easy business. Our success rate is less than 5 percent, especially in a public agency where the number of bidders is high."
Besides the convocation center, the two other contracts MBB recently won are for $103,891 to inspect bridges being reconstructed along the Tri-State Tollway and for $250,000 to inspect Chicago area construction projects for the Transportation Department.
Those contracts were not competitively bid but were awarded according to standards set by the federal government, which is common for contracts involving architecture, engineering and other professional services.
Blum's companies aren't the only construction-related firms to donate heavily to Blagojevich's campaign and get state contracts.
Other architecture, engineering and construction companies have gotten millions of dollars in business, including: Teng & Associates ($51,000 to Blagojevich); Knight Engineers & Architects ($61,200, including $30,000 in free flights to the governor); Environmental Design International ($52,500); HNTB Corp. ($26,000); Burns & McDonnell Engineering ($26,500), and Bowman, Barrett & Associates ($22,400).
Transportation Department spokesman Matt Vanover said those contributions don't play a role. "I doubt our guys know who's giving what," he said. "There's a federal law . . . and we follow those guidelines."
THE GOVERNOR, CONTRIBUTIONS AND CONTRACTS
The following deals raise questions about whether political contributions to Gov. Blagojevich and the awarding of state contracts could be linked. Blagojevich says there's no quid pro quo.
CASTLE CONSTRUCTION CORP./MBB CONSTRUCTION GROUP
What they gave: $224,000
What they got: $24.7 million in state contracts, including a $24.4 million deal to build the Emil and Patricia Jones Convocation Center at Chicago State University.
How they got it: Castle underbid seven other companies for Chicago State deal; MBB's two transportation-related contracts were awarded based on qualifications and price.
The Kelly connection: Castle-MBB President Robert C. Blum has been a business associate and friend of Christopher G. Kelly, the governor's fund-raising chief. Castle and Kelly's company, BCI, operated a joint roof-repair venture at O'Hare Airport. BCI took over that deal exclusively in January and will be paid up to $3.8 million by Chicago's Aviation Department.
ELECTRONIC KNOWLEDGE INTERCHANGE
What they gave: $20,000
What they got: $6 million in state technology consulting and software development contracts
In transition: EKI founder and CEO Robert Blackwell Jr. was on Blagojevich transition team committee.
What they gave: $28,000
What they got: $8.6 million in government consulting contracts, including one to help streamline government computer and telecommunications services
Question: Did a $25,000 donation from Atlanta-based firm on June 9, 2004, fuel a boost in biz?
By George: Bearingpoint did about $700,000 worth of state work under Gov. Ryan
What they gave: $101,000 from CDW founder and former CEO Michael Krazny.
What they got: $2.6 million in state computer equipment purchases.
Continuing a trend: CDW also did well under Gov. Ryan, averaging about $1.5 million a year in sales.
Where have I heard that before?
Did Al Capone really die ???
For the uninitiated, this is how this little scam works.
"Sealed" bids arrive at the State office. They're opened. The low number is then telephoned to the political contributor who says "undercut it by....."
Or if it's a 'public' opening the person reading them outloud is a political appointee who simply saves the favored vendors bid for last. Then he reads whatever figure is required, regardless of what's actually written.
Then during the project there are the inevitable "cost over runs" which are, of course, approved by the State.
Move over Meyer Lansky.
And he still endorsed him in 2006 ping.
Lisa Madigan is Illinois’ Attorney General. She was re-elected Nov. 7, 2006 for her second four-year term. During her tenure, Madigan has advocated protections for women and the elderly. She was instrumental in implementing laws to stop the creation and distribution of methamphetamine. The adopted daughter of longstanding powerhouse House Speaker Michael Madigan (D-Chicago), Madigan was dogged by accusations that she was riding on her father’s coattails during her first bid for the office. With 50 percent of the vote, Madigan narrowly beat Republican Joe Birkett, 47 percent, in 2002; in her re-election bid in 2006, Madigan captured 72 percent of the vote. Madigan has frequently butted heads...Madigan was an Illinois Senator from 1998 through 2002, during which time she worked down the hall from her friend Barack Obama. In 2002 she ran for Attorney General of Illinois and narrowly defeated Joe Birkett with 50.4% of the vote. In 2006 she was re-elected with 72.4% of the vote against Tazewell County State’s Attorney Stewart “Stu” Umholtz.