Lobbying involved in bond sales
Records show many investment houses used tactic
By RYAN KEITH
THE ASSOCIATED PRESS

When Illinois launched a $10 billion bond sale this spring, financial firms
hired some of the state's best-known lobbyists to secure pieces of the
action.
While Gov. Rod Blagojevich continues to insist that business as usual is
over in state government, federal records show that several of the
investment houses that succeeded did it the old-fashioned way.
Lobbyists would not say whom specifically in the Blagojevich administration
they approached, and the governor's office said their work had no effect on
which firms ended up with a piece of the deal.
Budget director John Filan said the firms were picked based on their
"experience and international reach," not lobbying or the firms' skills at
self-promotion.
"There were firms in the deal that made sales calls to follow up and there
were firms that did not," Filan said. "I don't think there was any rhyme or
reason."
Among the lobbyists were former state lawmaker Al Ronan, former Attorney
General Roland Burris and top Republican Party official Bob Kjellander.
Ronan's firm, one of the most successful in Springfield, is paid $10,000 a
month by Merrill Lynch. Burris' firm earned $5,000 a month for six months'
work with Loop Capital Markets LLC.
Ronan and Burris said they simply arranged meetings with the governor's
staff so the companies could make their case directly to people with power.
Ronan said that as with other lobbying, his firm and clients had meetings
with the governor's staff and budget office to make their case directly to
the decision-makers.
"We're advocates for who we represent," Ronan said. He said it's "pretty
easy to represent a blue chip, world-class organization" such as Merrill
Lynch with a long track record in bond sales.
"We did not do anything other than what any lobbyist would do," Burris said.
"We make sure they have access to the decision-makers in government and they
have to sell themselves."
Documents filed recently with the federal Municipal Securities Rulemaking
Board show political heavy hitters also lobbied for Bear Stearns and Co.,
UBS PaineWebber Inc. and ABN Amro Financial Services, each of which got a
piece of the bond deal,
"It's door-opening that they were looking for," said Cindy Canary, director
of the Illinois Campaign for Political Reform. "In a way I think that is
business as usual. The lobbyists, especially the lobbyists who have
experience, often really do expedite open-ing the door."
The deal was a key piece of Gov. Rod Blagojevich's plan to erase a $5
billion budget deficit.
It involved selling $10 billion in bonds, using some of the proceeds to pay
the state's pension costs and investing the rest to support the pension
system in future years.
Once lawmakers approved the plan, the state had to hire companies to handle
the actual sale of bonds - a job worth about $35 million in fees.
More than 50 firms bid on the project. Becky Carroll, spokeswoman for the
Governor's Office of Management and Budget, said 16 firms were selected but
most of the $35 million went to the five companies that were named
co-managers. They were Bear Stearns, UBS PaineWebber, ABN Amro, Citigroup
Global Markets Inc. and Goldman Sachs and Co.
According to quarterly reports filed with the MSRB, a regulatory board
created by Congress to oversee municipal securities, four of those five
firms used consultants - including some with deep Springfield connections.
Bear Stearns hired Springfield Consulting Group, a firm run by Kjellander, a
member of the Republican National Committee and an ally of President Bush.
Bear Stearns' report did not disclose what Kjellander did or how much he was
paid, and Kjellander would only say he has a "wide range of
responsibilities" with the firm.
UBS PaineWebber had three consultants, including Tony Leone, a former House
clerk and veteran lobbyist whose clients include Commonwealth Edison. Leone
was paid $5,000 a month.
Citigroup pays the law firm of Michael Daley, brother of Chicago Mayor
Richard Daley, $180,000 a year for consulting.
ABN Amro paid Ronan's firm $5,000 a month until that contract was terminated
June 1. Goldman Sachs reported having no Illinois-based consultants on its
payroll.
Filan said many firms are "very competitive and fairly equally qualified,"
and those who were not picked could be selected for future bond deals.
Carroll said the firms were picked for their experience and expertise, not
connections.
"Obviously, firms hire lobbyists for a reason - because they know people,"
Carroll said. "That doesn't mean that anyone would choose a firm simply
based on who their lobbyist is. In the end, it's going to be based on who's
the best firm to get the job done."
Others are wary.
Sen. Miguel del Valle, D-Chicago, said the large investment firms have huge
clout in Springfield. That makes it harder for minority-owned firms, which
got a small piece of the deal, to be competitive, del Valle said.
"The big guys control it all," del Valle said. "It's incredible how
exclusive this business is."

When Illinois launched a $10 billion bond sale this spring, financial firms
hired some of the state's best-known lobbyists to secure pieces of the
action.
While Gov. Rod Blagojevich continues to insist that business as usual is
over in state government, federal records show that several of the
investment houses that succeeded did it the old-fashioned way.
Lobbyists would not say whom specifically in the Blagojevich administration
they approached, and the governor's office said their work had no effect on
which firms ended up with a piece of the deal.
Budget director John Filan said the firms were picked based on their
"experience and international reach," not lobbying or the firms' skills at
self-promotion.
"There were firms in the deal that made sales calls to follow up and there
were firms that did not," Filan said. "I don't think there was any rhyme or
reason."
Among the lobbyists were former state lawmaker Al Ronan, former Attorney
General Roland Burris and top Republican Party official Bob Kjellander.
Ronan's firm, one of the most successful in Springfield, is paid $10,000 a
month by Merrill Lynch. Burris' firm earned $5,000 a month for six months'
work with Loop Capital Markets LLC.
Ronan and Burris said they simply arranged meetings with the governor's
staff so the companies could make their case directly to people with power.
Ronan said that as with other lobbying, his firm and clients had meetings
with the governor's staff and budget office to make their case directly to
the decision-makers.
"We're advocates for who we represent," Ronan said. He said it's "pretty
easy to represent a blue chip, world-class organization" such as Merrill
Lynch with a long track record in bond sales.
"We did not do anything other than what any lobbyist would do," Burris said.
"We make sure they have access to the decision-makers in government and they
have to sell themselves."
Documents filed recently with the federal Municipal Securities Rulemaking
Board show political heavy hitters also lobbied for Bear Stearns and Co.,
UBS PaineWebber Inc. and ABN Amro Financial Services, each of which got a
piece of the bond deal,
"It's door-opening that they were looking for," said Cindy Canary, director
of the Illinois Campaign for Political Reform. "In a way I think that is
business as usual. The lobbyists, especially the lobbyists who have
experience, often really do expedite open-ing the door."
The deal was a key piece of Gov. Rod Blagojevich's plan to erase a $5
billion budget deficit.
It involved selling $10 billion in bonds, using some of the proceeds to pay
the state's pension costs and investing the rest to support the pension
system in future years.
Once lawmakers approved the plan, the state had to hire companies to handle
the actual sale of bonds - a job worth about $35 million in fees.
More than 50 firms bid on the project. Becky Carroll, spokeswoman for the
Governor's Office of Management and Budget, said 16 firms were selected but
most of the $35 million went to the five companies that were named
co-managers. They were Bear Stearns, UBS PaineWebber, ABN Amro, Citigroup
Global Markets Inc. and Goldman Sachs and Co.
According to quarterly reports filed with the MSRB, a regulatory board
created by Congress to oversee municipal securities, four of those five
firms used consultants - including some with deep Springfield connections.
Bear Stearns hired Springfield Consulting Group, a firm run by Kjellander, a
member of the Republican National Committee and an ally of President Bush.
Bear Stearns' report did not disclose what Kjellander did or how much he was
paid, and Kjellander would only say he has a "wide range of
responsibilities" with the firm.
UBS PaineWebber had three consultants, including Tony Leone, a former House
clerk and veteran lobbyist whose clients include Commonwealth Edison. Leone
was paid $5,000 a month.
Citigroup pays the law firm of Michael Daley, brother of Chicago Mayor
Richard Daley, $180,000 a year for consulting.
ABN Amro paid Ronan's firm $5,000 a month until that contract was terminated
June 1. Goldman Sachs reported having no Illinois-based consultants on its
payroll.
Filan said many firms are "very competitive and fairly equally qualified,"
and those who were not picked could be selected for future bond deals.
Carroll said the firms were picked for their experience and expertise, not
connections.
"Obviously, firms hire lobbyists for a reason - because they know people,"
Carroll said. "That doesn't mean that anyone would choose a firm simply
based on who their lobbyist is. In the end, it's going to be based on who's
the best firm to get the job done."
Others are wary.
Sen. Miguel del Valle, D-Chicago, said the large investment firms have huge
clout in Springfield. That makes it harder for minority-owned firms, which
got a small piece of the deal, to be competitive, del Valle said.
"The big guys control it all," del Valle said. "It's incredible how
exclusive this business is."