Saturday, June 29, 2013

ILLINOIS' PENSION DEBACLE CONTINUES TO SIPHON MONIES FROM TEACHERS

David Wilhelm, former head of the Democratic National Committee and Rod Blagojevich's campaign manager, resides in Ohio and continues to earn over $3 Million in management fees from Illinois Teachers' Retirement System as a reward for mismanaging $10 Million in pension money funds

Wilhelm incorporated Hopewell Ventures LP in Delaware on 10/24/2003.

According to the Teachers' Retirement System of the State of Illinois Minutes from the Meeting of the Investment Committee on December 11, 2003


Under New Business "Hopewell Ventures, Limited Partnership Representatives from Woodland Venture Management, L.L.C. presented an investment opportunity in its new private equity fund, Hopewell Ventures, L.P. Their presentation booklet is on file.


Documentation is included in the due diligence book. A motion was made by Molly Phalen, seconded

by Stuart Levine, that the committee recommend to the Board to allocate up to $10 million to Hopewell Ventures, Limited Partnership. The source of funds will be cash flow. The motion passed by a unanimous voice vote." This the was a wired deal from inception and placed pension funds into hands of political cronies that resulted in personal gain at the expense of the fund.

 
Based upon the funding to be provided by TRS to Wilhelm, he received a $55 Million SBA matching loan on Sept. 30, 2004. This loan would not have been approved without leveraging funds from the TRS.
 
Funding was made to Hopewell in the fall of 2004.
 
In March, 2004 Levine, Cari & Steve Loren were indicted by the US Attorney for wiring deal at the TRS. Wilhelm slipped under the radar because the feds were looking to fry bigger fish.
 
Levine is now a convicted felon who negotiated a plea agreement in exchange for testimony against Rod Blagojevich. Joe Cari also accepted a plea agreement under the same terms. Under questioning by Assistant U.S. Attorney Christopher Niewoehner during the Blagojevich trial, Levine gave mostly monotone "yes" or "no" answers about malfeasance at the Illinois Teachers' Retirement System, or TRS, where he sat on the board of trustees.
 
Levine said he and Cellini worked to engineer a series of moves to ensure they continued to control a voting block on TRS. Among the moves was putting a friend of Cellini's on the board, Levine said.
 
One move that has not received much publicity is the approval of David Wilhelm's Hopewell Ventures receiving $10 Million and Joe Cari's Healthpoint Partners (coincidentally incorporated in Delaware on February 24, 2003!) receiving $35 Million as private placements. Healthpoint Partners also received pension funds from CalPers and New York.
 
 
 
As New York-based Healthpoint Partners LP lobbied the California Public Employees Retirement System in 2003 and 2004 to invest in their fund, two managing directors, including the one in Illinois, raised money for State Comptroller Steve Westly at events in New York and Chicago. One partner had run for governor of New York; the other had been a finance chairman for the Democratic National Committee.
 
 
 
According to a number of FOIAs issued to TRS by Corruption Busters, here are the management fees garnered by Wilhelm and the performance of the funds under his fiduciary management on behalf of Illinois teachers:
 
FY 2005 $280,986 and a return loss of -25.80%
FY 2006 $383,273 and a return loss of -61.40%
FY2007 $534,750 and a return loss of -27.00%
FY2008 $538.092 and a return loss of -17.90%
FY2009 $511,726 and a return loss of -66.20%
FY2010 $334,891 and a return loss of -27.60%
FY2011 $325,379 and a return loss of -65.80%
 
Total Management Fees garnered are $2,909.057 OF NON-RECOVERABLE PENSION MONIES FOR INVESTMENTS THAT NEVER MADE ANY GAINS UNDER HIS CONTROL!

The average teacher's pension in Illinois is $48,000.
 
The TRS was contacted and asked to terminate the contract with Wilhelm to prevent any further diminishing of pension funds. TRS refused and advised that they have no input or control in the investments made by private investors. This action constitutes a breach of fiduciary on the part of TRS management and failure to safeguard assets of the fund.
 
Immediately upon receiving TRS funds, Wilhelm directed payment to iTRACS, a firm controlled by his associate Thomas R. Reedy, formerly with Kemper Securities.
 
According to a Hopewell Press Release "Chicago, January 23, 2005 – Hopewell Ventures, a $100 million venture capital fund licensed by the U.S. Small Business Administration as a Small Business Investment Company (SBIC), announced today that it has made a $2million venture investment in iTRACS, a leading provider of intelligent physical layer network infrastructure management solutions. Hopewell was part of iTRACS $18 million second round of financing." Wilhelm currently serves on iTRACS' Board of Directors.
 
When Wilhelm left the DNC he worked for two years with Reedy. In 1993, Reedy was an initial investor in Cablesoft, along with Cari. Wilhelm was to subsequently become an investor. An additional player was Robert Vanecko, Mayor Daley's nephew, who Reedy hired at Kemper in 1998 and then Cablesoft (later renamed iTRACS) in 2000.
 
Vanecko subsequently received $64 Million in City pension funds with Allison Davis. That investment money was also subsequently invested in nebulous investments despite hefty management funds that are not recoverable by the funds.
 
Wilhelm effectively continues to enjoy personal gain at the expense of Illinois teachers after fleeing the State and returning to Ohio when the FBI was conducting investigations related to the corruption by Blagojevich.
 
Wilhelm and the rest of the conspirators should be compelled to return taxpayer monies used for personal benefit.

Dick Ingram, Executive Director and Tom Gray, General Counsel were contacted in 2012 and made aware of the targeting of TRS dollars by Cari, Wilhelm and Levine. They advised that the TRS selects private investment managers and does not monitor their risk or investments. They also failed to terminate the contracts for both Hopewell and HeathPoint on the basis that they entities were specifically incorporated to target vulnerable pension funds specifically to garner management fees for personal gain.

Stan Rupnik is the Chief Investment Officer for the Teachers' Retirement System of the State of Illinois (TRS).  TRS is the largest public plan in the state of Illinois, with an investment portfolio in excess of $30 billion.  As CIO, Stan has direct oversight of all asset classes and manages an internal staff as well as the full roster of external investment managers. Stan joined TRS in April 2003 and is fully accountable to the 355,584 members and annuitants. Rupnik has breached his fiduciary responsibility to teachers by failing to terminate these contracts and recover management fees that should never have been granted to Wilhelm and Cari.
 
For a copy of the FOIA obtained regarding TRS pension funds managed by private investors totaling over $100 Million, please send an email to corruptionbusters24x7x365@gmail.com
 
If you have any further information to share, please contact us at corruptionbusters24x7x365@gmail.com
 
 
 
 


 
 




 
 
 
 
 

Corruption Busters Opinion

If Chicago Public Schools do not wish to uphold its charter with Chicago and Cook County taxpayers to manage the task
of educating Chicago children, it should get out of the way and allow Chicago taxpayers proper control of the school system!

Corruption Busters obtained FOIA information related to the levy of property taxes paid for the benefit of CPS. Here are the results of those collections for tax year 2011 for two months...$236,518,808! For tax year 2010, the total number is
$2,117,777,036...over 2 Billion Dollars!

CPS claims a student enrollment of 404,151 (FY2011-2012)



 
Monies are allocated to each school on a child per capita basis. Public monies and Private monies should not be co-mingled. Non-profits have the ability to raise funds via donations.  Here is a list of donations received by AUSL http://auslchicago.org/about/partners
 
They compensate their employees as they choose and spend their dollars without accountability to the public. The insidious practice of forming 501C3 non-profits strictly to feed from the public trough is egregious. AUSL SHOULD RECIEVE NO TAXPAYER FUNDING, BUT SHOULD OPERATE LIKE ANY OTHER ILLINOIS COMPANY; capitalize internally or obtain donations to further their corporate goals!
 
These non-profits continue to privatize public education and diminish the direct responsibility of education mandated by the State of Illinois to provide public education.
 
CPS should be barred from compensating non-profits to manage schools.
 
A per child per capita payment to schools originating from property taxes should only be legally made to bona fide public institutions. This would also be an incentive for CPS to actually directly manage education, as this task has been entrusted to it by the taxpayers.
 
If you have any information you would like to share please contact us at corruptionbusters24x7x365@gmail.com
 


One Year Later...what happened to the adult staff dismissed by Chicago Public Schools?

In June, 2012 CPS implemented turnaround for 10 schools and simply handed them over to non-profits who made application with CPS to obtain funding facilitated via Illinois State Board of Education formerly headed up by Jesse Ruiz (CPS Board Member).

What happened to the adult staff members, many tenured teachers, who were removed from their positions at these schools?

We welcome hearing your stories that will add a human touch to dedicated educators sacrificed so that CPS could obtain much needed funding for capital improvements and then simply turned over the buildings to politically connected non-profits not subject to public accountability or scrutiny (FOIA and OMA).

Please contact us at corruptionbusters24x7x365@gmail.com



Jesse Ruiz and David Vitale, current Chicago Public School board members conspired with Arne Duncan to obtain US Department of Education Turnaround Funds to privatize Herzl School and 9 other schools.

An ongoing investigation by Corruption Busters into abuse of taxpayer funds reveals a chronology of activities starting in the spring of 2011 to manipulate federal US Dept. of Education funding to Chicago Public Schools under the guise of school turnarounds to AUSL, controlled by David Vitale, now President of the Board of Education at CPS. Jesse Ruiz, former head of Illinois State Board of Education approved Lead Partners as of 4/28/2011. These entities included AUSL and Chicago Public Schools. They jointly made application for turnaround funding that required the firing of all adult staff members in schools targeted for this drastic measure.

This policy was successful implemented to turnaround 10 schools by June, 2012. Rigged hearings staffed by former judges allowed residents 2 minutes to speak. A review of those hearings indicate that they were held simply as a formality mandated by Illinois State law; the outcomes were already predetermined as funding had already been awarded by Duncan.

AUSL's only partnership is with Chicago Public Schools http://auslchicago.org/schools and was formed specifically to garner funding via taxpayer dollars diverted to privatize education in Chicago.
Policy of Neglect

Chicago Public School Buildings violate environmental safety for students and staff until a miraculous infusion of Federal Dollars manipulated in a conspiracy by Arne Duncan, David Vitale and Jesse Ruiz for turnarounds.

Corruption Busters ongoing investigation into corruption related to the management of Chicago Public Schools reveals a pattern of failed maintenance in violation of the Chicago building and public safety code. As an illustration Herzl School was constructed in 1908.

According to information obtained by Corruption Busters from City of Chicago , no major repairs were undertaken in the years leading up to the turnaround in June, 2012. Only after $5 Million was manipulated via the Illinois State Board of Education headed up by Jesse Ruiz and requested in a joint application by Chicago Public Schools and AUSL, headed up by David Vitale were capital improvements made to the property. The caveat was the removal of all adult staff members from the school building and a handover of the property to AUSL, a non-profit not subject to FOIA and OMA by taxpayers despite AUSL receiving direct funding from CPS.

....more to come on this investigation




 
 
If you have information to share contact us at corruptionbusters24x7x365@gmail.com

 
 

Chicago Building Inspectors fail to cite
Chicago Public Schools for environmental,
sanitary and electrical violations

Corruption Busters ongoing investigation into
corruption at CPS reveals a cover up of building
violations that threaten the health and well being
of students and staff. These photos indicate numerous
violations that would not be tolerated by inspectors
in other public or private buildings in the City.












 
 
Please report other violations to corruptionbusters24x7x365@gmail.com
 



The reason there are no monies available to educate children in Chicago.....

Chicago Public Schools waste $20 Million of taxpayer dollars on outside legal fees breaching taxpayer trust and exercising fiduciary responsibility to provide quality public education

Corruption Busters ongoing investigation of waste, fraud, corruption and conspiracy to syphon taxpayers monies from education to politically connected law firms reveals a pattern of
awarding sole source, no cap contracts.



Excessive fees improperly awarded at the discretion of the General Counsel of CPS should be returned to the taxpayers.

If you have information to share contact corruptionbusters24x7x365@gmail.com
Corruption Busters ongoing investigation of Chicago Public Schools paying Millions to politically connected law firms while schools are forced to cut back on essential services budgets for student educational programs

$3.6 Million spent from January, 2012 to September, 2012

Contact us if you have information to share corruptionbusters24x7x365@gmail.com




Chicago Public Schools spends millions of dollars on outside legal fees to politically connected law firms while laying off nearly 850 employees after closing 28 schools last week with more to follow...

According to FOIAs issued by Corruption Busters to CPS,
over $2 Million was spent in just 8 months from October 2012 to May 2013.
 
 
 
 
 
Here is an illustration of the typical sole source award of monies without scope, definition or disclosure of how many attorneys will be working on the engagement. Not mentioned in this engagement is the typical hourly rate for outside counsel at $295 per hour. But the rub is, there are usually 2 or 3 attorneys assigned to the work so the effective hourly rate is $900! If CPS used in-house counsel, the hourly rate would be $40.
 
This is certainly continue abuse of taxpayer funds. Mayor Rahm Emanuel is now proposing a property tax increase to cover the deficit created by patronage workers awarding monies to Friends and Family.
 
If you have information to share contact us at corruptionbusters24x7x365@gmail.com
 
 
 
Corruption Busters
Specializing in investigations of WIRED DEAL SOLE SOURCE CONTRACTS
Gifted to Friends & Family by Governmental Officials and Employees
 
Our mission is different from typical TV and newspaper investigations that report events of corruption and then go on to the next new story with out actually bringing the perpetrators to
justice.
 
Taxpayers expect public officials and municipal employees to be honest and trustworthy. They entrust
millions of dollars and rely upon these people to safeguard assets and wisely spent taxpayer dollars for the public good.
 
Corruption Busters has a unique creed..
When there is breach of the public trust it is not enough to report on corruption and improprieties; the bad guys need to be prosecuted and monies improperly spent need to be recovered and returned to the taxpayers.
 
Check out our latest investigations here.
 
If you have a tip, please contact corruptionbusters24x7x365@gmail.com