Wednesday, January 16, 2008

Illinois to foreclose on Abraham Lincoln Hotel

One of the dumbest moves in the sad history of Illinois government was consummated in 1982 when Governor James R. Thompson, a Republican, signed off on a deal that made it possible for the property now known as the Abraham Lincoln Hotel to be built with a state-backed loan of $15.5 million.

This afternoon, the owners of the Abraham Lincoln Hotel ended their battle to stop foreclosure proceedings.

Among the group of investors that owns the hotel (for now) is political insider William Cellini, nominally a Republican, who pulled a suspension-cable sized string on Thompson, best known of late for sitting on the board of directors of Conrad Black's Hollinger Corporation and defending his now-incarerated Lt. Governor, George Ryan. Thompson accompanied Ryan on his trip to federal prison, which created a horrible picture for the Illinois GOP: A former Republican governor headed to the "big house" with another along for the ride.

But back to the hotel...

From the Chicago Sun-Times:

In 1991, in the final days of former Gov. James R. Thompson's last term, Cellini secured a controversial sweetheart deal in which his investment consortium didn't have to make payments on the loan so long as the hotel didn't turn a profit.

The debt owed to the state is now at least $25 million.

Cellini once eyed a public career for himself, but went into the business of government.

From Andrew Ferguson's Land of Lincoln: Adventures in Abe's America:

Within a decade Cellini had built a fortune by "turning state government into a cottage industry," as one Chicago newspaper put it. He started a construction firm that specialized in government subsidized housing for senior citizens and office buildings that could be leased back to the state.


When the state legalized gambling on riverboats, it sold him the first license--an $85,000 investment that led to a company later valued at $500 million.

Is there a Tony Rezko link here? After all, this is Illinois. Well, Rezko has nothing to do with the Abraham Lincoln Hotel, but he has ties to Cellini.

He has not been accused of any wrongdoing, but Cellini is believed to be the person dubbed Co-Schemer A in one Rezko court filing, and as Individual A in another.

Shortly after becoming state treasurer last year, Democrat Alexi Giannoulias, the "Boy Banker," did something that should have been initiated years ago: He aggressively moved to foreclose on the Abraham Lincoln.

Once again, from the Chicago Sun-Times:

During the past decade, the Cellini group made only two payments to the state and none in the last five years. The bill to taxpayers for unpaid principal and interest on the original loan rises by $2,300 per day, Giannoulias' office said.

Giannoulias has commissioned a forensic audit to determine whether the business truly lost money to the extent the investors claimed.

"After 25 years, we need to finally put an end to this ordeal once and for all," the treasurer said. "It's dragged on for far too long and cost the state far too much money."

He's being viewed as a hero here, but I'm not falling for the hype. Giannoulias only called off the bucket brigade and brought in the fire department to end the $25 million bonfire, something his predecessor, Republican Judy Baar Topinka, should have done a long time ago.

But in the end, when the sun rises tomorrow, Illinois will still be the nation's most corrupt state.

And it's a real pity that Abraham Lincoln's name has to be sullied by inept business people and clueless politicians.

Related posts:

Obama's state treasurer pal needs a memory upgrade

"Obama's candidate" Giannoulias needs to explain alleged mob ties, says state house speaker

Book review: Andrew Ferguson's "Land of Lincoln: Adventures in Abe's America"

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