Byy Benjamin Yount | Illinois watchdog
SPRINGFIELD — Illinois Senate Republicans are doing a victory lap — eight years late, mind you, but a victory lap nonetheless.
The Senate GOP is telling anyone in the Illinois Capitol who will listen that it alerted the Securities and Exchange Commission back in 2005 to what Republican Leader Christine Radogno, R-Lemont, called misleading information about the state’s financial condition.
“We are saying, ‘I told you so’,” Radogno said one day after the SEC announced a settlement with Illinois over the state’s financial disclosures between 2005 and 2009.
“Clearly it hurts our reputation,” Radogno said. “We already have a bad reputation, a lot of problems. And this just adds to it. It’s a pile-on.”
But Democrats in Springfield say the settlement marks the end of an old problem.
“This is something, to me, that is a lot of discussion about nothing,” said state Rep. Elaine Nekrtiz, D-Northbrooke. “This is a problem that occurred eight years ago that we stopped four years ago.”
Abdon Pallasch, Gov. Pat Quinn’s budget spokesman, said in a statement that Illinois hired outside lawyers in 2010 to review the state’s pension reporting information.
The SEC took the state to task for “not adequately describing the impact of the 50 year ramp,” which has helped create Illinois’ $130 billion pension deficit.
Nekrtiz says the SEC settlement is one more black mark on the tarnished legacy of Rod Blagojevich.
“It looks to me like that,” Nekrtiz added.
Blagojevich was the second consecutive Illinois governor to be convicted and sent to prison. The two-term Democrat is serving a 14-year federal prison term for corruption.
But Radogno says Blagojevich can’t be blamed for everything.
“It’s hard not to connect the dots,” Radogno said. “The speaker is the same speaker who passed the budget that had the pension holiday in it that is the basis for this misrepresentation. Any Democrat that was here at the time absolutely bears some blame in this.”
Illinois’ pension mess was not a secret in 2005, but the state had not yet gained a reputation as the worst in the nation, and the SEC said Illinois was not honest with investors who bought the state’s pension bonds.
Ted Dabrowksi, vice president of Policy for the Illinois Policy Institute, said Illinois taxpayers should be wary of any promises of pension reform.
“Bondholders and taxpayers alike are being misinformed,” Dabrowksi said in a statement. “Politicians have proven they can’t manage retirement … . Any new plan needs to get politicians out of the pension business.”
Illinois will not pay any fines or penalties as part of the settlement with the SEC.
But Radogno said the state will pay for its pension misrepresentation. Eventually.
“We’re intending to sell more bonds, probably in April,” Radogno said. “Whether we’ll have to pay a higher interest rate remains to be seen.”
Contact Benjamin Yount at Ben@ILWatchdog.org