Archive for Sunday, December 28, 2008

Illinois corruption crisis costs millions, leads to confusion

December 28, 2008

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— Embattled Illinois Gov. Rod Blagojevich has made a point of regularly going to work at his office in Chicago. He has signed legislation and issued pardons. He has sent out press releases about predatory lending and fighting poverty.

But his arrest on federal corruption charges has clearly complicated his work as the state’s chief executive and already cost the state some $20 million. The state is facing a potential $2.5 billion budget deficit and the governor doesn’t have the same horsepower — or clout — to address the problem that he had just a month ago.

No one in the state capital trusts Blagojevich enough to give him authority to trim the budget on his own, as he requested in November. Any other idea he advances would probably be rejected out of hand. Yet no other official can take the lead.

“Everything just comes to a halt. You have complete paralysis,” said House Republican Leader Tom Cross of Oswego.

Blagojevich, a second-term Democrat, was arrested Dec. 9 on charges accusing him of scheming to swap President-elect Barack Obama’s vacant Senate seat for profit, shaking down a hospital executive for campaign donations and other wrongdoing.

The governor has defiantly insisted he’s done nothing wrong and that he will not resign. His aides say he is going about business as usual.

His chief of staff, who was arrested along with Blagojevich, has resigned and been replaced by a deputy governor. Another deputy, one with a background in budget matters, has resigned and may not be replaced. Plus, a committee is expected to recommend in early January whether the state House should vote to impeach Blagojevich.

“I think it’s difficult for him to manage government in the way a governor normally would,” said state Rep. Gary Hannig, a Democrat from Litchfield. “This is a time when you need strong leadership from the governor’s office.”

The state must find a way to eliminate its deficit. If nothing is done, the most likely outcome is that it won’t pay its debts to hospitals, pharmacies and nursing homes that care for the poor, forcing more of them out of business.

The problem cropped up two weeks ago when an effort to borrow money to pay overdue bills — one social-service vendor was owed $8 million and garbage collection stopped for 10 days at a state prison last month — was sidelined because the state attorney general’s office refused to give immediate consent.

The delay — blamed on the governor’s legal woes — cost Illinois $20 million in extra interest, according to Treasurer Alexi Giannoulias. Because the short-term borrowing plan was put off for several days after Blagojevich’s arrest, the state ended up paying higher interest rates.

Standard & Poor’s recently put out a negative “credit watch” on the state’s AA bond rating, noting the budget deficit and the governor’s legal situation could hamper efforts to find a remedy.

The governor’s budget director declined an interview request. Blagojevich spokesman Lucio Guerrero said the governor is expected to soon get an update on the budget deficit — including potential solutions — from his staff.

“I think the governor has shown that he continues to govern the state and is performing his duties,” he said.

Critics acknowledge that government will grind on despite Blagojevich’s problems. State police will patrol. The Revenue Department will collect taxes. Snowplow crews will clear highways.

But when an emergency hits, Illinois will lack a real leader to solve the problem and smaller problems may pile up in the meantime.

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