It would appear that William Cellini’s reign as a state powerbroker is over, especially since he’s probably headed for jail.
That’s in sharp contrast to a few years before his conviction last November in federal court of extortion conspiracy and soliciting a bribe. At that time, the real estate investment firm he ran was flush with tens of millions of dollars in fees provided by the Teachers Retirement System (TRS) of Illinois.
Cellini’s Commonwealth Realty Advisors received $30 million between 2001-2010, the Better Government Association found.
It was Cellini’s influence on the state’s largest public pension fund that helped lead to his downfall. Cellini was convicted of scheming to pressure a co-owner of investment firm Capri Capital in 2004 to make campaign contributions to then-Gov. Rod Blagojevich in return for Capri’s managing some TRS investments worth $220 million.
Federal authorities have alleged in court documents that Blagojevich insiders Tony Rezko and Christopher Kelly were also part of the scheme to force Capri to make payments to the ex-governor’s campaign fund.
The plot backfired when Capri co-owner Tom Rosenberg, a Hollywood producer whose films include “Million Dollar Baby,” refused to give money to Blagojevich, according to court documents.
Rosenberg threatened to go to the authorities.
To try to prevent that from happening, Cellini, Rezko, Kelly and TRS board member Stuart Levine decided Capri should get the $220 million investment stake anyway. But they vowed to use their influence to block Capri from receiving future state business, federal authorities alleged in court documents.
In October 2008, a federal grand jury indicted Cellini on charges of conspiracy to commit mail fraud, extortion conspiracy, attempted extortion and soliciting a bribe.
Cellini was subsequently convicted in federal court, where Rosenberg was a key government witness.
Cellini’s family still has property and business interests in Springfield and downstate, so a comeback for the resilient political powerhouse is always a possibility.
But that’s a long shot: Cellini faces up to 30 years in prison and his firm, Commonwealth Realty, has closed. His sentencing is scheduled for June 15.
This blog entry was reported and written by BGA Investigator Andrew Schroedter, who can be reached at (312) 821-9035, or at aschroedter@bettergov.org.
Expert: Fed Rescue of Insolvent States Will Include Illinois
If the federal government bails out the nation’s debt-ridden states, Illinois will be among the first to grab a lifeline, according to one financial expert.
“If there’s even a hint of a bailout, you’re gonna have Illinois, New York, several other states right behind California,” said Christopher Whalen, bank analyst and managing director of Institutional Risk Analytics.
Whalen told the Business Insiders website that California, which is running a $25 billion deficit, is close to defaulting on its bills. Should that occur, the federal government would be compelled to come to California’s aid by crafting some type of financial restructuring plan or rescue effort.
Whalen notes that California has a number of governance problems that are adding to its crush of financial woes. They include: A huge deficit, an inability to quickly pass a state budget and massive public pension obligations.
If that litany of woes sounds familiar it’s because Illinois has similar difficulties: A budget deficit of $15 billion; a woefully under-funded state budget; and staggering public employee pension obligations of around $80 billion or more.
Some lawmakers are suggesting the federal government refrain from bailing out any state that goes broke.
However, the feds may not have a choice because any sovereign state default, especially a biggie like California or Illinois, would inevitably damage the U.S credit rating, cripple investor demand for its bonds and deeply hinder the economy.
State defaults are rare and Arkansas was the last to go bust during the Great Depression.
Nevertheless, Whalen is one of a small but growing chorus of financial experts who are openly concerned about the states’ debt loads and potential impact on the economy.
Respected financial analyst Meredith Whitney is also sounding the alarm about the dire fiscal condition of the nation’s 15 largest states. She says Illinois ranks as the second worse, right behind California.
By Robert Reed, director of investigations. Do you have concerns or information about the State’s deficit or finances? Contact the BGA at 312.427.8330.
2 Comments
Filed under Commentary, Fiscal Issues
Tagged as christopher whalen, federal bailout of states, illinois bailout, institutional risk analytics, Meredith Whitney, states bailout