The list reads like a menu of prizes on a glitzy game show: Trips to Germany and Mexico. Super Bowl tickets in Miami. Hotel accommodations at swanky resorts. Porterhouse steaks, lobsters and cash awards of $1,000.
But the lavish gifts are what government prosecutors allege were bribes to a handful of state employees from a state contractor they were supposed to be supervising.
These and other tales of gift-giving by Management Services of Illinois Inc., a private firm hired by the state to trim Medicaid costs, are coming to light as the federal government enters its third week of prosecuting bribery charges against the company, its well-heeled owners and a state employee who went to work for them.
The stories of MSI’s alleged brazenness have shocked even political old-timers in a capital that is hard to shock.
Although MSI’s penchant for wining and dining the politically powerful would seem to be part of an entrenched tradition in Springfield–as defense attorneys asserted in opening arguments–there is a line between gift-giving and bribery, as prosecutors have contended in this case.
But in Illinois, the line can often seem blurred because the state has virtually no legal limits on what someone can contribute to a public official to curry favor.
Stories about legal attempts to buy influence in government are legion and about as subtle as a fistful of cash.
Consider the era of former Gov. James Thompson, when his official gift book read like an antique auction catalog and his office was stuffed with pricey trinkets courtesy of those currying his favor.
Or the lobbyist who once stood outside the doors of the Illinois House chamber handing out money in envelopes to lawmakers. And the nightly dinner circuit during the legislative session in the Capitol, in which the state lawmaker who picks up his own tab is the one who dines alone in his hotel room.
It’s one of the accepted rules in the unwritten guide to being a lobbyist: The way to get a lawmaker’s ear is to get him a drink first.
But what had been unquestioned rules of operation are coming under intense scrutiny this summer as a result of the corruption trial that features some prominent names in Illinois government.
Prosecutors allege MSI used an old-fashioned concoction of campaign contributions, gifts, trips and nights on the town to buy influence and subvert Department of Public Aid workers so that the firm could renegotiate its contract. The conspiracy, the U.S. attorney says, bilked taxpayers out of more than $7 million.
To be sure, the jury won’t be asked to judge the ethics of how business is routinely done in Springfield, but rather whether MSI committed bribery.
Nonetheless, the explanation defense lawyers offer for MSI officials’ general practice of giving opulent gifts to those in positions of power over them acknowledges a mode of operation ingrained in the culture of Illinois government. In the words of one defense attorney during opening arguments, “Here in state government, here in Springfield, that’s the way you get your foot in the door.”
The contention has stirred what had been a moribund debate about the ethics of gift-giving in Illinois.
“Illinois is not even on the chart with its ethics laws,” said Craig Holman, project director for the Center for Governmental Studies in Los Angeles, which monitors how different states regard gift-giving. “The state has no legal restrictions whatsoever. Meanwhile, other states have seen that restrictions radically change the political culture for the better.
“It’s somewhat humorous. First, you hear these lobbyists going around complaining, `Oh, what can I do? What can I do?’ Pretty soon, they figure out they can talk to legislators without any exchange of material value.”
Quid pro quo
A gift becomes a bribe, according to legal experts, when both giver and receiver agree that some kind of official duty will result.
“If it’s purely a social courtesy and there’s no expectation on either side that there will be action forthcoming, it’s just a gift,” said John Heinz, a law professor at Northwestern University and author of a book on Washington lobbyists, “The Hollow Core: Private Interests in National Policy Making.”
Things aren’t so clear-cut if just one side thinks one good turn deserves another.
“There may be the hope that, if I give you something, you’ll do something nice for me,” said Heinz. “But if it’s merely a hope, as far as criminal law is concerned that wouldn’t be sufficient. There has to be a clearer quid pro quo.”
Of course, things have changed to some degree in the last few years, since the legislature, pressured by Secretary of State George Ryan, passed a law requiring lobbyists to file twice-yearly reports detailing gifts and dinners they bought public officials. Those reports suggest behavior much more modest than the tales of yore, and some lawmakers report that the law has made it a little easier to say no to a pushy lobbyist.
But political watchers smirk at the idea that the law has changed the way of life in the capital, suggesting that it may have simply driven it underground. Finding out who was wining and dining with whom used to be as simple as walking around the dining room at Baur’s Restaurant or Alexander’s Steakhouse in Springfield.
“Now, you can look at those annual reports,” said Jim Howard, executive director of the political watchdog group Common Cause. “It gives us a much better look at what is going on, sure. But I don’t know that we had a good baseline of comparison. And, of course, we can’t see what’s not being reported.”
And there are loopholes, as plentiful as the potholes that pit state highways.
For example, if the beer distributors, who tried and failed to defeat new drunken-driving legislation last session, want to hold a giant Springfield party with free drinks for all comers, they only have to report what they spent on the entire shindig–not the cost of entertaining each official or who attended.
Neither does Ameritech have to report as individual contributions the yearly private reception at the Art Institute of Chicago, a cultural affair a little less in line with many lawmakers’ way of life.
Furthermore, state law does not unilaterally ban gifts to state workers, leaving the decisions instead up to individual agencies. Public Aid, ironically, has one of the stricter rules: no gifts for any reason.
But as the MSI case underscores, apparently no one at Public Aid was policing whether employees were following that rule.
On the other hand, Central Management Services, the agency in charge of procuring goods and services for the state, forbids employees to accept discounts, gifts or honorariums from a vendor if they are “an inducement for, or a condition of, the state purchasing from the vendor.”
“That sounds real tough, but it’s not,” said ethics projects director Holman, comparing the agency rule to those in many other states. “Who is going to admit, `Sure, I am giving this gift specifically to influence this person’? No one. So, anyone can give what they want.”
Gifts to governors
Cynics remember the most flagrant stories of Illinois political history. In the 1960s, then-Gov. Otto Kerner received secretly issued horse racetrack stock at major discount and, in return, provided favorable racing dates and friendly Racing Board appointments. Kerner was convicted of that in a federal court trial–prosecuted by Jim Thompson.
Fifteen years later, then-Gov. Thompson came under fire for accepting South African Krugerrands worth $2,700 from a couple whose firm did more than $1 million a year in work for the state, as well as a $500 cash Christmas gift from a Teamsters official.
Gov. Jim Edgar has also had his turn at criticism for accepting gifts, including a $9,000 stay at the Pritikin Longevity Institute as a guest of Chicago-based Quaker Oats Co. Edgar defended the gift, saying Quaker didn’t have any state contracts. And, he said, a healthy governor is good for the state.
But many public officials contend the heyday ended around the time Edgar took office.
“The climate is very different,” said state Rep. Barbara Flynn Currie (D-Chicago), a longtime House member. “I think that’s much less likely to happen today than 10 or 15 years ago.”
Yet no one denies that the old custom of eating, drinking and making merry among policymakers and those who wish to hold sway with them is still alive.
“I’ve been an insurance agent, so I have been on the other end. It’s the way business is done in this country,” said state Rep. Terry Parke (R-Hoffman Estates.) “I can’t possibly focus when we’re in my office and phones are ringing and people are coming in the door. If they want to talk to me over dinner and explain their issue to me in that more relaxed setting, it’s their expense. That’s fine.”
Just because an elected official goes to dinner with a lobbyist doesn’t mean she or he is for sale, said Currie.
“There is the practice for them to pick up the tab at Alexander’s or wherever, but I don’t think lobbyists expect that, if they buy supper tonight, they’re going to own my vote tomorrow,” she said.
State Rep. Peter Roskam (R-Wheaton) said if he gets the idea that is what a lobbyist has in mind, he declines dinner. Usually he does so anyway, Roskam said, because, after a long day, “Who wants to hang around with someone you don’t even know?”
“The idea that they’re going to buy you a steak so you’ll vote their way, that’s pathetic,” he added. “You’d have to really love those Alexander’s steaks.”
Of course, the level of lobbyist’s interest is in direct proportion to the title of the guest. Legislative committee chairmen who can advance or kill measures with a word are always in great demand and command more frequent visits to the local eateries.
Protocol of giving
Still, the MSI case offers a much more exaggerated example of the protocol of gift-giving.
Defense attorneys in the case don’t deny that gifts changed hands. They have acknowledged that more than $5,600 in holiday gifts of porterhouse steaks, prime rib roasts, lobster tails and other seafood ordered from Burr Ridge-based Pfaelzer Brothers were sent by MSI to Senate President James “Pate” Philip, two of his key staff members, a top staffer for Edgar and other bureaucrats with a thank-you note attached.
Defense attorneys say MSI owners Michael Martin and William Ladd sent token gifts to politicians in accordance with common business protocol, meant to help the startup firm get a foot in the door. Hired “rainmakers” advised the MSI officials to send the lobsters, the lawyers say, although Ladd had only wanted to send fruit baskets.
As for the gifts to the employees, they say they were given as presents to personal friends–so close that some of them gathered weekly in each other’s homes to watch “Seinfeld” and eat dinner.
The gifts to Public Aid bureaucrats included a trip to Super Bowl XXIX in Miami, a trip to Mexico and a vacation in the Lake of the Ozarks in Missouri.
Besides, contend defense attorneys, MSI saved the state more than $300 million in health insurance claims. That assertion was disputed last week by several prosecution witnesses, who testified that MSI billed for work it didn’t do or which was useless to the state.
MSI was hired to identify people who were getting public aid from the state for their medical bills, but who actually had health insurance policies or other sources that should have been footing the bill instead of taxpayers.
As a result of the trial, Edgar himself has clarified some statements about his relationship with MSI officials. The governor previously said he had dinner with some of MSI’s principals early in his administration. But after opening arguments, Edgar aides said the governor met with some MSI officials in May 1994, during his re-election campaign.
Although the state’s disclosure laws have been tightened somewhat during Edgar’s tenure as chief executive, contributions and gifts still provide the grease for the wheels of state government, political observers agree.
“Obviously, they have some influence, if people are bothering to give away trips to Germany and pounds of porterhouse steaks and lobster tails,” Common Cause’s Howard said. “We’re not talking about coffee-mug warmers here. There is clearly room for improvement.”
