Lobbying relationships cut across family ties

Lawmakers move legislation that helps friends, family

January 11, 2012

John Sullivan, Fredric N. Tulsky and Kristen McQueary

Denny Jacobs, a former state senator, had a special ally last year when the state’s largest electric utility company hired him to lobby for a controversial smart-grid energy bill that many say makes it easier for utilities to raise rates.

His son, State Sen. Mike Jacobs, chairman of the Senate Energy Committee, sponsored the bill and actively promoted the campaign of the Commonwealth Edison Company, one of his father’s clients, to win its passage.

The downstate utility Ameren Corporation also backed it. “I’m with ComEd and I’m with Ameren on this bill,” Jacobs, a Democrat from East Moline, said in a floor speech. He even took to the floor to invite his colleagues to a reception hosted by ComEd. He denies that his father influenced him.

The smart grid legislation is one of several bills pushed by Senator Jacobs that benefited clients of his lobbyist father, a review of legislation by Medill Watchdog, a journalism program at Northwestern University, found. And Mike Jacobs is hardly the only Illinois public official supporting measures backed by close relatives.

Medill Watchdog examined statements of economic interests of public officials, lobbying registrations filed with the City of Chicago, Cook County and the state, and records of state bills and local ordinances. The investigation found 14 elected officials from Cook County alone who, while not lobbyists themselves, are related to or in business with lobbyists.

The review found more than a dozen instances in which an official took action that benefited the lobbying client of a family member or business partner.

Reformers say Illinois has a historic tolerance for corruption. “There are people who believe that’s just the way it’s done,” said Kyle McCarter, a Republican state senator from Lebanon. “Cultures don’t change overnight.”

At the state level, Illinois law leaves it to legislators to decide whether to recuse themselves from matters that present potential conflicts of interest. At the local level, public officials must disqualify themselves if they have an “interest,” but the law defines interest only as owning part of a company.

Some states are stricter. After a series of political scandals, Rhode Island adopted a constitutional amendment in 1986 demanding ethical conduct of public officials. The law there restricts officials from taking part in matters if they have direct or indirect financial interest. It restricts action in matters that benefit family members, including stepchildren or grandfathers-in-law, as well as restricting votes in cases that benefit business partners.

“Illinois law is really behind on this,” said Paula Franzese, a Seton Hall law professor and former chairwoman of New Jersey’s ethics commission.

Actual or potential conflicts are widespread, public records show.

Joseph Berrios, chairman of the Cook County Democratic Party, was also chairman of the county Board of Review when he was elected county assessor in 2010. All the while, he was a registered lobbyist and partner of the lobbying firm B-P Consulting. Since 2004, Berrios and his partner, Sam Panayotovich, have lobbied for the Illinois Coin Machine Operators, the group that makes and distributes video poker machines.

Berrios was a lobbyist in 2009 pushing a bill legalizing video poker when his daughter, State Rep. Maria Antonia Berrios, a Democrat from Chicago, voted to approve it. Ms. Berrios also supported bills to allow racetracks to install slot machines, another measure the coin operators favored.

Berrios said there was no conflict, because her father had not lobbied her directly. Her spokesman, Manuel Galvan, said, “The truth is she would have voted for it regardless, and her father really did not lobby her except for the first year she was in office,” in 2003.

On the night he won election as county assessor, Berrios repeated a campaign promise that he would give up his lobbying business. He no longer registers as a lobbyist, but state incorporation records still list him as an officer of B-P Consulting, and Panayotovich continues to lobby for the coin machine operators.

A spokeswoman for Berrios said he is in the process of selling his share of the business to Panayotovich.

Last year, state Rep. Angelo Saviano, Republican of Elmwood Park, co-sponsored a bill in the House to help Mesirow Financial, a global investment firm, withhold some shareholder information when bidding on state contracts. Nicholas Saviano, Saviano’s brother, is the senior managing director of business development and a registered lobbyist for Mesirow.

“There is no connection,” Saviano said. “My brother is just an insurance salesman there. He didn’t even know about the bill.” Saviano said an outside lobbyist hired by Mesirow, William Filan, approached him to support the bill.

Few relationships are as striking as the one between Senator Jacobs and his father, the ex-senator. Lawmakers and lobbyists said the elder Jacobs often is found in his son’s Senate office, sometimes with his feet propped up on a desk.

“He is a lobbyist. I am a senator,” Sen. Jacobs said. “He doesn’t lobby me. There is no financial benefit,” he said, and he discloses the relationship on ethics statements. Denny Jacobs did not return phone calls seeking comment.

In 2007, Denny Jacobs received $9,000 from the Illinois Recovery Association, which represents auto-repossession businesses, to lobby for a bill that would regulate the industry more tightly, according to Rick Constantine, who led the association’s lobbying effort at the time. Sen. Jacobs introduced the bill, which died in committee.

Denny Jacobs registered last year as a lobbyist for the Rock Island Boatworks, which owns the casino in that city. Sen. Jacobs had sponsored a bill narrowly tailored to give the casino a tax break.

At the time Denny Jacobs was lobbying for the smart-grid bill last year, Sen. Jacobs took to the floor of the Senate and invited colleagues to a reception of “appetizers” and “liquid libations” hosted by ComEd. State records show that the company spent $3,818 on the reception and an additional $5,690 taking lawmakers to dinner that night.

During hearings before the Senate Energy Committee he oversees, Sen. Jacobs allowed less than 15 minutes of testimony before adjourning, sending the measure to the Senate floor.

The move denied Scott Musser, the associate state director of the AARP, the opportunity to express his opposition. “It was very suspect, especially on such a huge and controversial issue,” Musser said.

Sen. Jacobs said later, “I knew I had the votes, so I moved it.” When the measure came up for debate on the Senate floor, McCarter, the Republican senator, criticized Senator Jacobs for being the chief sponsor of a bill for which his father lobbied. Sen. Jacobs walked across the aisle and thumped McCarter on the chest.

McCarter later complained to Capitol police that Sen. Jacobs punched him; Senator Jacobs said he merely poked him. He apologized, and a local prosecutor declined to pursue the matter.

McCarter, a first-term legislator, said he felt disillusioned by the whole experience.

“It was a conflict of interest then, and it’s still a conflict,” McCarter said. “It’s the way things have been done for so long, they don’t even see it as wrong.”

Sen. Jacobs said that supporting a bill that benefited his father’s client did not involve a conflict because the legislation was “good for Illinois.” Many of his colleagues agreed, passing the law over the governor’s veto.