WurfWhile

I’m guessing most people in DuPage think we should pay once, and pay competitively. It appears to be a difference between me and the DuPage County Board.

From the Chicago Sun-Times July 26, 2004

Probe looks at consultant’s pay

Republican businessman John E. Glennon has made a lot of money off DuPage County, but taxpayers don’t know the half of it.

His company, North American Capital Opportunities, has been paid $288,000 for county lobbying and financial consulting work since 2000, records show. On top of that, Glennon has raked in at least $105,000 in previously unknown payments - cash that came out of pots of money he helped the county borrow for road projects and new election equipment, among other things. The payments, made directly out of bond proceeds with virtually no accounting to taxpayers, are now part of a larger inquiry by the county’s auditor. They raise questions…about whether Glennon was being paid twice to do the same job.

In the county’s most recent bond deal, for example, Glennon made $20,000 as a financial adviser, or “F.A.” - a position that a former county official said was unnecessary, especially given that Glennon already was being paid under his county contract.

“Did we need an F.A.? Like I need a third leg,” said the official, who spoke on condition of anonymity….

An attorney for Glennon declined to comment, standing by DuPage County Board Chairman Robert Schillerstrom’s statement that Glennon deserved everything he got because he put in extra work to close out borrowing deals.

At the same time, Schillerstrom acknowledges DuPage needs to bring Glennon’s payments under one umbrella.

“I’m not absolutely sure how he got paid, to be quite frank,” Schillerstrom said. “In the future, what we’re going to be doing is having a straight-up contract approved by the county board. I agree that’s a better way of doing it.”

The $105,000 paid to Glennon has been a secret because county officials didn’t release records showing how much was made by him and other players involved in borrowing deals. The county provided that information - the kind of detailed cost breakdowns routinely disclosed by the State of Illinois and the City of Chicago - only after repeated inquiries by the Chicago Sun-Times. Records for two bond sales remain missing.

“It’s taxpayer money. And it’s buried, quite honestly,” said county auditor Jim Rasins, who has begun an examination of the payouts from all borrowing deals authorized by the county board since 2001. “Because of the amount of money involved with these bond issuances, we want to determine where the proceeds went.”

Glennon, 52, of Lake Forest, once chaired former Gov. George Ryan’s campaign fund and is a lobbyist for companies run by Chicago Blackhawks owner Bill Wirtz. He headed a task force that oversaw Ryan’s multibillion-dollar Illinois FIRST program for road and other construction improvements….

Link to hospital scandal

In one of the DuPage borrowing deals in which Glennon got cash that previously was unknown, the lead underwriter was Bear Stearns & Co. The investment banking firm is a player in an evolving state hospital construction scandal under investigation by federal authorities.

Records of possible payments to Glennon for two other Bear Stearns bond deals in DuPage remain missing, county officials said.

Glennon recently was fired as a real estate consultant by Rosalind Franklin University of Medicine & Science, the former Finch University of Health Sciences/Chicago Medical School, which was told by the feds it might be a victim of fraud. He has not been accused of wrongdoing.

Glennon has ties to two people who recently resigned from the North Chicago medical school’s board: Stuart Levine and Jacob Kiferbaum. They’re both defendants in a whistleblower lawsuit filed in May by executives with Edward Hospital in Naperville. The suit accuses them of being involved in a state hospital construction “kickback” scheme.

Last year, Glennon arranged meetings between Levine, Kiferbaum and officials with the DuPage Technology Park, for which Glennon also has been a consultant.

While Schillerstrom said he’s concerned about Glennon’s dismissal from the medical school, he has no plans to cancel Glennon’s two contracts with the county this year worth $145,000 for lobbying and financial consulting.

Services needed

Schillerstrom said the county brought in Glennon as a consultant because its infrastructure needed upgrading. Borrowing money, the chairman said, was the best way to tackle big-ticket projects without raising property taxes.
….
“We brought in John to be our agent to make sure the underwriters, the lawyers and the people who would do the work for us, that the costs stay in line.”

In the first round of major borrowing deals, Glennon tapped Bear Stearns and the head of its Chicago public finance team, Nicholas Hurtgen…. Hurtgen resigned from Bear Stearns this month in the wake of the whistleblower lawsuit alleging the hospital construction “kickback” scheme. Like Levine and Kiferbaum, Hurtgen has been named a defendant in that case.

Glennon and Hurtgen were among the financial minds hammering out plans for a $131 million bond sale for DuPage road construction projects in April 2001. Glennon already had been paid $13,400 by the county as a consultant, but he got $25,000 out of the bond proceeds “for professional advisory services.” That started a trend of Glennon drawing paychecks from both bond proceeds and his county contracts.

“My understanding is that in all the payouts that were made on all of this stuff, all kinds of lawyers were involved, and everything was appropriately handled,” Schillerstrom said.

Some of Schillerstrom’s critics question that.

“I think the DuPage County Board members ought to start to ask some questions and perhaps even be talking to the DuPage County state’s attorney,” said Woodridge Mayor William Murphy, a member of the DuPage Water Commission, which once rebuffed an effort by Schillerstrom to make Glennon its borrowing adviser.

Other DuPage business

The county board chairman has been more successful in helping Glennon land other government consulting work in DuPage.

At the DuPage Airport, Glennon came on the scene in late 2002 as the airport authority was in the midst of refinancing about $23 million in debt.

“Mr. Glennon just showed up and said he was going to be involved with us as a broker [on the deal],” recalled Duane Gengler, who was chairman of the airport board at the time. “I mentioned it to Mr. Schillerstrom during a private meeting and told him it would cost us a lot more to use Mr. Glennon as a broker. Mr. Schillerstrom said, ‘Use him as a consultant because it’s not as expensive.’”

Schillerstrom denies forcing Glennon on any government authority.
“Especially my dealings with the airport authority,” he said. “I want them to run the very best airport they can, and I want them off the tax rolls in two or three years.”

This isn’t the first time Glennon’s contracts have been called into question.

In 2001, Illinois gambling regulators fined Empress Casino Joliet Corp. $95,000 for entering into a contract that would give Glennon a $1.5 million success fee if the Empress was sold. The contract wasn’t reported to regulators and didn’t specify Glennon needed to do anything to get the fee - a violation of Illinois Gaming Board rules.

Glennon never has been accused of any criminal wrongdoing stemming from that contract.

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DUPAGE COUNTY’S $440,000 MAN

At the same time John Glennon had contracts with DuPage County for financial consulting work, he also was getting paid out of pots of money he helped the county borrow.

[Below] is a breakdown of the $282,415 that Glennon’s company, North American Capital Opportunities, has taken in for lobbying and financial consulting work through July 16.

The county provided this information after a Freedom of Information Act request by the Chicago Sun-Times, but it took repeated inquiries before DuPage disclosed “separate payments” Glennon “may have” gotten for bond work.

Records for two other deals where Glennon might have been paid still can’t be found. Below are the previously undisclosed payments that the county did find:

Borrowing deal: Payment to Glennon

$131 million for road construction (2001): $25,000
$55 million for courthouse construction (2001): $20,000
$26 million for drainage work (2001): $15,000
$29 million for refinancing (2001): $25,000
$18.5 million for county jail (2002): Records not found
$27 million for drainage work (2002): Records not found
$9 million for refinancing (2003): $20,000
Total: $105,000

Besides his work for the county board, Glennon since 2001 also has done consulting for other agencies affiliated with DuPage County government:

DuPage Technology Park: $27,559
DuPage Airport Authority: $25,000
Known payments to Glennon since 2000: $439,974

SOURCE: DuPage County records