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Public-Sector Pay Dirt

Law firm employing state legislator does a staggering amount of work for local governments – including state agencies he helps oversee. How is this not a glaring conflict of interest?

By Andrew Schroedter and Patrick Rehkamp/BGA

October 30, 2012 7:41 AM

Since bringing an influential state legislator on board as a partner in 2005, a small Chicago law firm has secured at least $6.3 million in legal work from state agencies that receive funding and oversight from the General Assembly, the Better Government Association has learned.

While that relationship smacks of a conflict of interest, it’s not the only curiosity involving the legislator, state Sen. Don Harmon, and the firm where he’s a partner, Burke Burns & Pinelli Ltd.

The BGA also found that Harmon – a Democrat from Oak Park who once served as deputy legal counsel to Illinois House Speaker Michael Madigan – voted earlier this year on a casino bill that his firm helped craft on behalf of its client, the City of Des Plaines.

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State Sen. Don Harmon  

Harmon, who was first elected in 2002 and holds a leadership post in his legislative chamber, says he goes to great lengths to keep his private- and public-sector jobs separate. He says he never works on state-related contracts and often abstains from voting on legislation involving agencies that work with Burke Burns. He also insists he doesn’t financially benefit – at least directly – from the state work.

"I’ve been careful since the onset to avoid real and perceived conflicts," he says.

What’s more, Harmon denies being a rainmaker for the firm, noting Burke Burns has had state-government work since the mid-1990s, well before his hiring.

However, that work may have increased in recent years.

A BGA review of state financial records shows Burke Burns, a firm of 10 or so attorneys, was paid more than $1 million in each of the past two fiscal years for state-related work.

Overall, the firm was paid more than $6.3 million – or an average of $900,000 a year – from 2006 to 2012 for state-related work, according to interviews, and documents obtained under the Illinois Freedom of Information Act. (Fiscal year 2006 was Harmon’s first full year with the firm.)

By contrast, in the four years before Harmon joined the firm, annual payments exceeded $575,000 only once, topping out at $711,734, records show. However, those totals may be incomplete because several state agencies indicated they no longer had data for fiscal years 2001 and 2002. In addition, some records relating to bond work are not always tracked by state agencies.

SIDEBAR: Downstate Legislator’s Law Firm Secures State Work

 

Harmon says if all payments were included it would show the firm’s state work hasn’t increased dramatically since his hiring, especially given the rate of inflation. But he declined to disclose actual payments or turn over financial records to the BGA.

Last year, Burke Burns worked with the Illinois Department of Transportation, the Illinois Board of Higher Education, the State Universities Retirement System and at least six other state agencies, according to interviews and records. Those units of government depend, either directly or indirectly, on the legislative branch for funding and oversight. (The firm also has done work for a number of non-state governmental agencies, including the Village of Bridgeview and the Chicago Board of Education.)

A key part of its business is to provide legal services on bond sales, and over the years Burke Burns has done that for state agencies such as the Illinois Finance Authority, Illinois State Toll Highway Authority and Illinois Development Housing Authority.

In December 2009, for example, Burke Burns was paid $50,000 on a deal in which the state sold $529.9 million worth of Build Illinois bonds, records show. The firm, under a contract with the Governor’s Office of Management and Budget, served as legal counsel to the underwriter – essentially a middleman that bought the bonds from the state and resold them to investors.

Harmon, 45, previously worked for legal giant Mayer Brown LLP. Municipal bond matters were one of his interests but at Burke Burns he says he hasn’t worked on a state bond transaction.

However, on the firm’s web site Harmon’s government experience is touted, mentioning among other things that he is vice chairman of the Senate Committee on Assignments, "which directs the flow of legislation to substantive Senate committees."

State officials maintain the firm’s state work doesn’t constitute a legal conflict of interest in part because Harmon doesn’t own a piece of Burke Burns or handle legal work with state agencies.

Under state law, a company that employs a lawmaker and does business with the state cannot pay that lawmaker more than $107,000 a year, or 60 percent of the governor’s salary, says Matt Brown, the state’s chief procurement officer for general services.

Brown says a review of Burke Burns’ state contracts determined they meet guidelines because Harmon, a salaried attorney at the firm, is paid less than $107,000 a year and has no "pecuniary interest" in the contracts.

Harmon, the Senate’s president pro tempore, declined to disclose his Burke Burns salary, other than to say it’s less than what he’s paid as a senator (roughly $78,000). Pressed on his income, Harmon acknowledged he’s also entitled to a bonus through the firm, but he wouldn’t reveal specifics.

Aside from financial questions, the BGA uncovered two examples in which Harmon took action on measures that involved his firm’s clients.

This past spring, Harmon voted in favor of a gaming expansion bill that among other things called for five new casinos statewide. Amid concerns that the growth would water down tax revenues stemming from its Rivers Casino, the City of Des Plaines enlisted the help of Burke Burns. City officials say the firm helped draft and insert a clause in the bill that would have reduced Des Plaines’ casino-related payments to the state by $120 million over 30 years. Harmon says he didn't work with Des Plaines nor did he know his firm helped the northwest suburb with the legislation, which passed the General Assembly but was vetoed by Gov. Pat Quinn in late August.

Also this past spring, Harmon voted for a bill that allows IDOT to use eminent domain powers to acquire property for the proposed Illiana Expressway. Burke Burns partners Edward J. Burke and Vincent D. Pinelli work on eminent domain matters for IDOT, and the bill could lead to a heavier workload for the firm, and therefore more pay. Harmon says the vote didn’t constitute a conflict of interest, nor did he think it would boost his firm’s bottom line. An IDOT spokesman says no decision has been made on whether the agency will use eminent domain to secure land for the project.

Harmon also says he never put the arm on state government officials to hire his firm, adding Burke Burns was tapped on its merits. (Records and interviews show the firm was sometimes, but not always, hired by the state through a competitive selection process. Burke says his firm provides discounts to state agencies.)

Meanwhile, Harmon isn’t the only member of the firm who cashes a state paycheck.

Quinn tapped the firm’s president, Mary Patricia Burns, in July of 2009 to serve as an Illinois Court of Claims judge. (Harmon abstained from voting on her appointment.) The judgeship pays nearly $60,000 a year, in addition to a taxpayer-funded pension if certain criteria are met down the road.

Recognizing the potential conflict of interest, Burns declares in state records that she waived her right to any portion of "distributive income realized from any state contracts after July 1, 2009." Yet, she remains head of the firm, continues to counsel state agencies and, according to Des Plaines officials, worked with municipal leaders on the gaming expansion issue. She wouldn’t agree to an interview with the BGA.

The firm, Burns and other lawyers at the firm (aside from Harmon) have collectively donated more than $525,000 to state and local political candidates since the mid-1990s, according to the Illinois State Board of Elections. Nearly half of that money went to funds controlled by Madigan.

This story was written and reported by the Better Government Association’s Andrew Schroedter and Patrick Rehkamp. They can be reached at (312) 821-9035 or aschroedter@bettergov.org.

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Anonymous
Please. Relative to Madigan and Ed Burke's lobbying of city sister agencies, this is small potatoes. Heck, county and city patrollers in the leg vote all of the time on their employers' budgets.
3:25 PM Nov 3rd

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