by Dan Proft
Responding to the news that the Securities and Exchange Commission (SEC) had confirmed what Illinois residents know to be true which is that their state government is organized as a conspiracy to defraud them, House Speaker Mike Madigan said, the SEC won’t let me be or let me be me so let me see…it’s Blagojevich’s fault.
The original Slim Shady actually said, “There are no victims here. Nobody’s lost any money.”
$2.2 billion worth of municipal bonds sold under false pretenses between the years 2005-2009, according to the SEC, but, according to the most powerful man in Illinois politics, there’s nothing to see here.
Others disagree.
George S. Canellos, Acting Director of the SEC’s Division of Enforcement, said, “Time after time, Illinois failed to inform its bond investors about the risk to its financial condition posed by the structural underfunding of its pension system.”
Elaine Greenberg, Chief of the SEC’s Municipal Securities and Public Pensions Unit, added, “Regardless of the funding methodology they choose, municipal issuers must provide accurate and complete pension disclosures including the effects of material changes to their pension plans.”
Rich Miller, publisher of the Capitol Fax newsletter, correctly observed, “Fraud is fraud, and bond buyers could’ve received a higher interest rate had it not been for that fraud. So, yes, there were some victims.”
One does not need a Series 7 license to recognize that when a private sector operator commits securities fraud it is quite a serious matter. There are a number of corporate executives playing catch with Red in the prison yard who wish they could live in Mike Madigan’s world without consequences when it comes to obeying the law and stewarding other people’s money.
Anyone surprised by Mike Madigan’s care-free attitude should not be. What, is his Attorney General daughter going to investigate and pursue enforcement of state securities laws?
Expect Lisa Madigan to exercise precisely the same vigor in this specific instance as she has offered in pursuing public corruption generally during her whisper-quiet decade as Illinois’ chief law enforcement official.
Mike Madigan figured out long ago that command control of state government means never having to say you’re sorry.
And so his offense pile up.
A 2011 Crain’s investigation found that Madigan “cost taxpayers nearly half-a-billion dollars by blocking repeated efforts to restructure McCormick Place bonds and finance a much-needed second hotel at the convention center.”
From 2005-2010, as the state was defrauding municipal bond investors with false information, Mike Madigan stopped five McCormick Place refinancing bills in Springfield, ignoring declining interest rates that would have saved Illinois taxpayers hundreds of millions of dollars in interest payments.
Illinois announced on April 2 it will return to the municipal bond market to sell $800 million of tax-exempt and taxable general interest bonds.
Caveat emptor.
