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
 
 
 
 


 
 




 
 
 
 
 

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