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By Bernard Schoenburg, Political Writer
Posted Jun. 13, 2015 at 10:00 PM
The head of a company that has done more than $50,000 in business with the state in each of the past four years donated $2 million to Gov. Bruce Rauner's campaign fund in December in apparent conflict with state campaign finance laws.
Richard Uihlein of Lake Forest is CEO of Uline, a packaging supply company now based in Pleasant Prairie, Wisconsin. In December, he gave Citizens for Rauner a $2 million contribution. Uihlein's wife, Elizabeth, is president of the firm, and she donated $25,000 to Rauner in October.
According to comptroller's records, Uline has been paid more than $80,000 for purchases by agencies under the governor in fiscal year 2015, which ends June 30. The previous year, fiscal 2014, such agency purchases from Uline totaled more than $86,000. The total was about $70,000 in fiscal 2013 and $100,000 in fiscal 2012.
Those totals represent the bulk of Uline sales to the state each year but don't include purchases made by parts of state government not under the governor's control.
The state's chief procurement officer, Matt Brown, said his agency is investigating the matter.
At a news conference (hear audio) on the grounds of the Executive Mansion last week, the Republican governor — who has frequently spotlighted what he says are conflicts of interest between donors and elected officials — again criticized the Democrats who lead the General Assembly as "working for government insiders." He was asked about wealthy donors to his own campaign.
"My donors are taxpayers," Rauner said. "And the reality is, I have not taken money from folks who do business with the state, who make money from the government. … Frankly, it's illegal for businesses or individuals who contract or do business with the state to do business with politicians. That's a good restriction. I haven't taken any money from any of those folks. My donors are taxpayers, pure and simple."
A state law that took effect in 2010 state, "Any business entity whose contracts with State agencies, in the aggregate, annually total more than $50,000 … are prohibited from making any contributions to any political committee established to promote the candidacy of (i) the officeholder responsible for awarding the contracts or (ii) any other declared candidate for that office." Vendors whose business exceeds the threshold are supposed to register with the State Board of Elections.
Page 2 of 4 - "I can't speak for whether or not Uline should be registered — the onus is on the contributor," Rauner spokesman Lance Trover said in an emailed statement. "As you know, Citizens for Rauner had a strong record of compliance during the campaign."
A phone message left with a Uline spokesperson was not returned Friday.
Rauner became a declared candidate, as defined in the statute, when he filed his nominating petitions for governor in December 2013, which was in the middle of the state's fiscal 2014.
'Analysis' underway
Brown said that after he was told by The State Journal-Register last week of Uline's aggregate state business, he asked the state purchasing officers who report to him to gather information to see if the donations from the Uihlein s and the state business going to Uline are outside the boundaries of the law.
"If there's money expended from the state's treasury and we have that company receiving those funds in remuneration for contracts or business … obviously there's a $50,000 threshold there," he said.
Brown said agencies can spend up to $20,000 on a purchase without a contract, and it is not unusual for companies that sell to many agencies to not immediately realize they have crossed the $50,000 threshold. He said that when he and purchasing agents find such cases, "we ask those companies to go ahead and disclose" their vendor relationship. He also said meetings of purchasing agents can lead to recommendations that there be a master contract bid for certain items.
"An agency can go out under their small purchase authority and they can say, 'I need $5,000 worth of boxes,' and order $5,000 worth of boxes and pay the invoice," Brown said, speaking hypothetically. "And the state doesn't have the technology that essentially filters all those invoices and says, 'Hey, you guys know we're spending $78,000 this year with this company in small purchases?' "
In several cases, Brown said, officeholders that receive contributions from companies doing more than $50,000 annually in state business have had to give the amount of the donation to the state's general revenue fund.
As for whether that means Citizens for Rauner, the governor's campaign fund, will have to give more than $2 million to the state treasury because of Uline's state business, Brown said he didn't want to go that far.
"We want to conduct that analysis before I give you any idea what the outcome could be," he said.
The Executive Ethics Commission, which is the body that named Brown to his five-year term as chief procurement officer for general services, has a list of more than 30 contributions that were made by state vendors and then donated to the state. That includes a $250 donation to Rauner's campaign fund in February from Prairie State Plumbing & Heating Inc., based in Athens, and $1,000 donated in April to the Rauner fund by Springfield Electric Supply Co.
Page 3 of 4 - Both of those companies are registered as vendors with the State Board of Elections, but Uline is not.
Technical violation?
Comptroller's office records of spending with Uline show payments were in relatively small amounts. The largest annual total for any agency in the current fiscal year is $17,876 from the Department of Transportation, for example. More than $12,000 has been spent on Uline goods so far this year by the Department of Natural Resources, and some orders have been as small as $170, which was paid by the Illinois Historic Preservation Agency.
Even if there is merely a technical violation, given the relatively low amount of state spending with the firm and the large associated political donations, the situation still deserves to be reconciled with the law, Brown said.
"Irrespective of how the scales weigh — the value of the contract versus the value of the contribution — it doesn't get them off the hook," Brown said. "My job as CPO is to understand the magnitude of the violation."
A company like Uline, he added, may decide it wants to stop doing business with the state in order to allow its owners to keep contributing to candidates.
Richard Uihlein's $2 million donation was part of $20 million Rauner's campaign fund raised in late December. Of that total, Rauner donated $10 million, and Ken Griffin, CEO of Citadel, a hedge fund based in Chicago, donated $8 million.
In a 2013 story in Crain's Chicago Business, Uihlein was quoted as saying, "I'm a conservative Republican, and I'm trying to help people who believe as I do in limited government and free markets." He said at the time that Wisconsin officials had aggressively courted the Uline headquarters. He also said that Illinois' fiscal crisis worried him enormously.
"Bruce is the only one in the race who isn't beholden to public sector unions," Uihlein said at the time.
Brown, of Auburn, said he was not reappointed to another five-year term by the Executive Ethics Commission and is leaving his post at the end of June. Named by the commission to replace him as of July 1 is Ellen Daley of Chicago, who is now deputy general counsel — procurement at the Department of Central Management Services. She is up for Senate confirmation.
Page 4 of 4 - — Contact Bernard Schoenburg: bernard.schoenburg@sj-r.com, 788-1540, twitter.com/bschoenburg.
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By Bernard Schoenburg, Political Writer
The State Journal-Register
$2M Rauner donor's company does business with state, has exceeded $50K limit past 4 years - News - The State Journal-Register - Springfield, IL
