From the Chicago Tribune

State calls for return of $750,000 in pork

By Ray Long
Tribune staff reporter
Published October 6, 2003
SPRINGFIELD -- The Blagojevich administration has demanded the return of a
$750,000 state grant that former Gov. George Ryan awarded three days before
he left office to the owners of the shuttered Sportsman's Park in Cicero.
Ryan gave the grant to the politically powerful National Jockey Club to
reimburse the group for some of the construction costs incurred years
earlier in a conversion of the 11,000-seat horse-racing track into a
70,000-seat dual-use stadium for horse racing and NASCAR-type events.
The conversion turned into a financial disaster.
By the time Ryan handed it the state money in January, the Jockey Club had
already closed the horse track, transferred racing dates to nearby Hawthorne
Race Course and announced it would schedule no more auto events at its
Chicago Motor Speedway.
The Jockey Club has since sold the site to Cicero for $16 million.
The decision by the state to seek return of the money followed an informal
meeting with representatives of the Jockey Club during which Illinois
officials concluded that the grant money was not used properly, said Laura
Hunter, spokeswoman for the Department of Commerce and Economic Opportunity.
"We determined, first and foremost, it did not comply with the terms of the
grant agreement," Hunter said.
The Jockey Club has strongly disputed the agency's conclusions and asked for
a full administrative hearing.
Jockey Club officials have maintained the grant was the fulfillment of a
commitment Ryan made to the facility in 2000 or 2001.
The grant was signed by Jockey Club president Charles Bidwill III and Joseph
Hannon, then acting director of the Department of Commerce and Community
Affairs.
The money was described as "reimbursement of prior incurred costs" for
concrete, masonry and paving during the conversion of the track in 1998 and
1999 to create the speedway.
The Jockey Club and its top officials have long been generous political
contributors to a variety of Illinois politicians, including Ryan.
The club has said there is no link between the grant and the contributions.
Money for the grant came from an under-wraps pool of more than $1.6 billion
that Ryan and lawmakers had set aside for pet projects.
With Rod Blagojevich soon to become governor, Ryan accelerated the pace of
approval for the pork-barrel projects and signed off on tens of millions of
dollars during his final weeks in the office.
The new governor froze spending on all pork grants shortly after he came
into office but later relaxed the freeze and began approving some payments.
The $750,000 state check to the Jockey Club was issued in the time between
when Blagojevich took office Jan. 13 and when he ordered the freeze a few
days later.
The payment to the Jockey Club is the only state grant for which the
Department of Commerce and Economic Opportunity has sought repayment since
Blagojevich took office, Hunter said.
Ed Duffy, a former top official with Sportsman's who remains a Jockey Club
consultant, said all of the grant guidelines were followed.
"We strongly disagree with the conclusions they came to at that meeting and
will present any additional information necessary at the formal hearing,"
Duffy said.
"We believe that we not only complied with the legal requirements of the
grant but also the spirit of the grant."
Duffy said he believed the agency's objection "was that, after the grant
period was over, we sold the track."
Over the summer, the track was sold to the town of Cicero for $16 million,
he said.
Earlier this year, the Tribune obtained Ryan administration e-mails,
including one titled "Last Minute Gov's projects."
The e-mails showed that aides to Ryan were rushing to complete approval of
spending on pork projects sponsored by legislators and Ryan before he left
office.
State documents show the purpose of the grant had shifted during the last
few months of Ryan's term.
The final agreement signed in January was a payment for previously completed
concrete work.
But a letter sent to the Jockey Club in October had promised $750,000 in
"operating assistance" for expenses to provide "low- or no-cost housing to
low-income backstretch workers associated with the National Jockey Club."
Hunter would not identify why the agency concluded the grant was not in
compliance, saying officials were "being very careful to make sure this goes
through due process of law."
Agency officials met with Jockey Club representatives in May, and the agency
is in the process of identifying a hearing officer to oversee the formal
administrative hearing, Hunter said.