Procurement, ethics, employee reforms sail to Senate

By Bethany Jaeger
The House overwhelmingly approved three measures to shield state contracts from political influence, to shine a light on the secretive process of investigating ethical violations and to “fumigate” the state of political appointees of former Govs. George Ryan and Rod Blagojevich.

The measures, all sponsored by House Speaker Michael Madigan, now head to the Senate, where more government reforms are expected to be debated tomorrow.



Madigan focused on procurement, employee ethics and political appointees. They received near-unanimous support. Republican Rep. Bill Black of Danville said, “These bills are some of the most important bills we’ve discussed in a long, long time.”

Procurement, SB 51
The speaker’s proposal would not go as far as preferred by Gov. Pat Quinn’s Illinois Reform Commission when changing the way the state purchases products and services. But Madigan’s goal mirrors that of the commission’s. “This was designed to shut the door on misuse of procurement and to isolate the procurement process and the procurement people from undue influence, especially from the office of the governor,” Madigan said on the House floor.

Rather than create one “procurement czar” in a new state procurement agency, as the commission wanted, Madigan proposed hiring a series of independent procurement officials in a "six-level system" of oversight:

• Chief procurement officers would oversee procurement for the Capital Development Board, the Illinois Department of Transportation and higher education. The rest would be placed with the state’s main purchasing arm, Central Management Services.
• Procurement compliance monitors would oversee the procurement process in real time and be able to recommend changes or expose abuses.
• Independent internal auditors would be placed in their respective agencies, reversing a Blagojevich decision to consolidate them all into Central Management Services.
• One executive procurement officer in the governor’s office would advise the governor and the procurement officers. The position would end in January 2011, either when Quinn started his first full term as governor or when a new governor took office.
• The Procurement Policy Board would be strengthened so it could review contracts or bidder information and make recommendations for the chief procurement officers regarding conflicts of interest.

Each procurement officer, compliance monitor and internal auditor would serve a five-year term, pending Senate confirmation. And they couldn’t be fired without a public hearing that determined cause for removal.

The use of sub-contractors would have to be disclosed, CORRECTION: but a provision that would have strengthened the so-called pay-to-play ban so that businesses holding state contracts of $25,000 (instead of the current $50,000) would be banned from donating to the officeholders' political campaign didn't make it into the final version. The $50,000 threshold remains.

“The bill is laced with transparency requirements,” Madigan said. “Our whole intent was two-fold: open up the process — make it more transparent — and insulate the process from undue influence, especially coming out of the governor’s office.”

Employee ethics, SB 54
Blagojevich enacted a law in 2003 that created inspectors to root out corruption or improper political donations from state contractors. But the process of investigating allegations lacked teeth and was cloaked in secrecy, with no way for the general public or legislators to know whether a corruption allegation was investigated or addressed.

“In the past, a lot of this work has been done in the dark,” Madigan said.

So his measure would allow reports of the inspectors to be public record if they found wrongdoing and either suspended or terminated an employee. Some of the information could be blacked out if it would jeopardize an ongoing investigation. And it would change the law so the inspectors could start an investigation based on anonymous tips.

It also would strengthen the so-called revolving door ban to prevent high-ranking officials from accepting jobs with private companies that received significant state contracts from the agency where the official worked. Agencies would have to list all of the employees who would be affected by the ban.

Stricter lobbying regulations would require people who lobby state boards, commissions or retirement boards to register as lobbyists, and all lobbyists would have to abide by stricter disclosure requirements. They’d also pay a higher fee of $1,000, as opposed to the current $350, which is how the state would pay for two inspectors to oversee lobbying activities. Madigan said he would consider reducing the fees for smaller nonprofit lobbying groups down the road.

Employee “fumigation,” SB 1333
At the request of the governor, Madigan reduced his original attempt to force Quinn to fire up to 3,000 employees or commissioners appointed by Ryan or Blagojevich. His measure now would apply to about 750 agency directors and their assistants, who can be hired or fired based on their political affiliations. He also would give the governor 90 days instead of 60 to review each of those employees before they would automatically be terminated.

Also at Quinn’s request “on a very personal level,” Madigan removed a provision that would have fired one of the governor’s longtime friends, John Filan. But that’s with the understanding the Filan would resign as the executive director of the Illinois Finance Authority July 1. “I took the governor at his word,” Madigan said. Filan was Blagojevich’s first-term budget director and former chief operating officer who played an integral role in several of Blagojevich’s controversial budget proposals, including floating $10 billion in pension obligation bonds and skipping $2.3 billion in state contributions in fiscal years ’06 and ’07.

Even without the provision to fire Filan, the bill drew concerns about the separation of powers because the legislature would fire people appointed by the executive branch. “We are, if not blurring those lines, we may actually be crossing those lines,” Black said.

Rep. Will Davis, a Chicago Democrat who voted present on the measure, said: “If [Quinn] wants to fire employees, he should do that and not come to the General Assembly to ask us to do that for him. … It certainly appears like maybe they’re doing him a favor.”

Madigan said the legislature has changed boards and commissions that were appointed by the executive branch before, including when the legislature twice revamped the Illinois State Board of Education and the Health Facilities Planning Board. Madigan added that Quinn “agreed to the bill.”

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Forty days and 40 nights

That cliché of the day indicates the number of days state legislators have to negotiate major spending and revenue proposals before they’re scheduled to adjourn their spring session May 31. With ethics reforms, health care negotiations and construction projects in the mix today, alone, lawmakers have a ton of work to do in the next five and a half weeks.




Government reforms
By Bethany Jaeger
Today marked the first time that Gov. Pat Quinn’s Illinois Reform Commission directly interacted with the joint legislative committee on government reform, both of which are working separately on some of the very same topics.

Today, however, the commission was asked to narrow its testimony to state procurement and contracting practices. The focus conveniently skipped over one of the commission’s most controversial proposals: limiting campaign contributions. So-called contribution limits topped the commission’s first set of recommendations late last month.

It’s hard to avoid the link between campaign contributions and state procurement decisions, said Commissioner David Hoffman, inspector general for the City of Chicago, particularly when repeated investigations reveal that public funds flow through contracts to the same companies that shovel large amounts of money into candidates' political campaigns. “You’ve got to get to both sides of the equation, the pay side and the play side,” he said.

But the commission abided by the committee’s request and focused on ideas for state procurement reforms. The commission’s recommendations are intended to improve transparency and insulate the process from political influence, preventing such alleged scandals as requiring state contractors to go through political fundraiser Bill Cellini. Commissioner Patrick Collins, a former assistant U.S. attorney, said Cellini was not a state employee, but prosecutors allege that he exercised significant influence over which firms received state business.

“We are entering a critical period in the next 40 days,” Collins said. “The state will learn much about itself. This is a gut-check time. … The nation is watching.”

The Illinois Reform Commission suggests creating a new department to house all state procurement officers, making them independent from the state agencies and from the governor’s office. A new procurement monitor also would oversee and review contracts.

The state already has a Procurement Policy Board to oversee contracts; yet, Hoffman said because members are appointed by the governor and the legislative leaders, they’re powerless to resist political pressure. Hoffman said the goal is not to change the procurement rules but to change whom the procurement officials report to.

Legislators and some state officials aren’t fully on board with the commission’s idea to consolidate procurement officers into a new department because needs are so different when hiring companies for road construction, power supply or higher education material.

Auditor General Bill Holland added that consolidation efforts under Blagojevich resulted in members of the governor’s inner circle playing key roles in selecting the companies that received state contracts. In one instance, a state contract was granted to an agency that did not yet exist. (See Holland’s 2005 audit for background.)

The commission plans to release its second set of recommendations next week, marking 100 days since the panel started holding public hearings throughout the state.

Senate President John Cullerton said the committee will consider all of the commission’s recommendations, but he also intends to speak with Quinn to find out what he wants to pursue. House Speaker Michael Madigan indicated the legislative committee and the governor’s commission would work closely together to draft legislation.

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Search for a common ground

By Bethany Jaeger, with Jamey Dunn contributing
House Speaker Michael Madigan and Senate President John Cullerton advanced their first joint measure to reform state government, focusing on the management of the public employee pension systems and targeting board members appointed by former Gov. Rod Blagojevich. At the same time, the independent reform commission created by Gov. Pat Quinn issued its first set of recommendations for beefing up state ethics laws and improving transparency of government operations.



How the legislative reform committee and the governor’s reform commission will work together, however, is yet to be seen. So far, they’ve operated in similar hemispheres but in separate quarters. They’ve heard hours of testimony from a lot of the same witnesses, they’ve debated some of the same proposals and they’ve used the same language to define their missions. To date, they have not yet testified to each other's public hearings. And the governor’s reform commission is different in that it “has a voice but not a vote,” to borrow the words of Patrick Collins, former federal prosecutor and chair of the governor’s commission. What is realistic by the end of the spring legislative session depends on the level of support the proposals can gain from the legislative leaders and their members, although Quinn has indicated he's willing to use his executive powers to institute some of changes.

One item to note is that the House speaker and the Senate president have been meeting about once a week for breakfast with Quinn to talk about a broad range of issues facing the state, including everything from a potential $12.4 billion budget deficit to possible ethics reforms. Madigan told Illinois Issues this morning said he finds those meetings to be “very productive.” He added: “They’re not 100 percent harmonious. … There’s differences, but you’ve got people who are committed to working through differences and coming to a result.”

In terms of ethics, some of the proposals of the governor's reform commission already are being considered by the legislature. In addition to pension reforms advanced by Madigan and Cullerton, the governor’s reform commission offered two more starting points: The “pay” side (or campaign finance) and the “play” side (or state procurement), to borrow another Collins phrase. The governor’s Illinois Reform Commission will issue many more recommendations in its final report by the end of April.

Pension board reforms
Madigan and Cullerton started with pensions. Their measure, SB 364, would remove all members of the existing pension oversight boards, and Quinn would have 30 days to nominate new members. The governor would be able to nominate current members to stay, but they would have to get Senate approval. Board members currently are reimbursed for expenses but are not paid for their work, and that would remain.

While Madigan said he did not intend to accuse current members of corruption, he said it was important to start over with a “clean slate.” The measure also would require all board members to follow the same ethics standards currently applied to legislators and executive branch employees. The standards are meant to prevent conflicts of interest and so-called pay-to-play politics from influencing the investment decisions made by the pension boards, investment managers and consultants.

Similar pension reforms passed the House twice before but stalled in the Senate under then-President Emil Jones Jr.

Madigan said this morning that the pension reforms illustrate the good that can come out of cooperation between presiding officers. “The people of Illinois feel that they deserve better, and they’re right. And with myself and Sen. Cullerton working together — not trying to one-up anybody, not trying to play gotcha-politics — I think that we can accomplish a lot.”

Campaign contribution limits (The “pay” side of pay-to-play)
The Illinois Reform Commission recommends campaign contribution limits of $2,400 for individuals and $5,000 for political committees and would completely ban contributions from lobbyists and trusts. The legislature is split on the idea of campaign contributions, with opponents saying that there are too many loopholes and that it wouldn't reduce the cost of political campaigns. All four legislative leaders have said they could consider campaign finance reform, but contribution limits are not considered the priority. The legislature already is considering some measures that would limit contributions, including:

• HB 24: Rep. Harry Osterman’s bill resembles the commission’s recommendations. He’s a Chicago Democrat.
• SB 1768: Sen. Heather Steans’ bill would enforce similar limits for individuals and political committees that are not controlled by the candidates, but it also would cap the amount political committees for the Democratic and Republican caucuses could transfer to candidates at $30,000, among other things. She’s a Chicago Democrat.
• SB 1548: Senate Minority Leader Christine Radogno’s bill would limit donations for all individuals, political parties, corporations, unions, etc., at $10,000. She’s a Lemont Republican.
• SB 2257: Sen. Kwame Raoul’s bill would, among other things, limit individual donations at $7,500 and corporate and labor group donations at $20,000. He’s another Chicago Democrat.

Two measures would establish a voluntary public financing system for judges and set various limits on the amount candidates could raise from individuals, political committees, corporations, labor groups, etc. They include:

• SB 2144, sponsored by Raoul.
• HB 1390, sponsored by freshman Rep. Will Burns, a Chicago Democrat.

Here are more highlights from the Illinois Reform Commission's recommendations for campaign finance, including extending last year’s pay-to-play ban to prevent state contractors from donating to legislators, as well as executive officers.

Procurement (The “play” side of pay-to-play)
The Illinois Reform Commission recommends the following:

• Make the procurement officials part of an independent arm of government to shield them from political pressure.
• Establish an independent contract monitor to review contracts and expose problematic deals.
• Scale back exemptions to the procurement code.
• Apply the procurement code to legislative, judicial and such quasi-governmental bodies as the Illinois Finance Authority.
• Subject no-bid and emergency contracts to tighter scrutiny and limitations.
• Disclose subcontractors, lobbyists and agents representing clients.
• Document any contact between vendors or their agents and procurement staff.
• Post all procurement information online.

Auditor General Bill Holland echoed some of the recommendations today during a special legislative hearing about state government reforms. But he added that the procurement code currently does not prevent agencies from accepting services before the terms of a contract are settled or before the contract is officially filed. He said that was “unacceptable” and said that all documents related to the contracting process, including losing proposals, should be made public.

Sen. Jeff Schoenberg, an Evanston Democrat, said the state also should tighten provisions on informal advisers, something noted during the corruption trial and conviction of former Blagojevich adviser Tony Rezko.

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