Mike Madigan spends a lot of time in Springfield, but the Illinois House Speaker also earns a sizeable income as a corporate real estate tax attorney in Chicago, raising an ethical question that’s shadowed him for years:
Can he reliably steward our state tax dollars, as a powerful legislative leader, while he’s helping building owners and developers lower their property taxes, which deprives local governments of sorely needed revenue, or is that a conflict?
Madigan’s law firm, according to a 2013 Sun-Times investigation, won $57 million in tax reductions for corporate clients over the previous decade.
The issue arose during last year’s governor’s race, when then-candidate Bruce Rauner called for a ban on outside income for legislative leaders.
And it came up again in the budget battle between now-Gov. Rauner and legislative leaders Madigan and Senate President John Cullerton, who’s also a property tax attorney.
Rauner’s “turnaround agenda” includes a property tax freeze, and he accuses Madigan and Cullerton of blocking it to protect their law practices.
“They have a fundamental conflict of interest with the taxpayers, homeowners and small business in the state,” Rauner said.
Madigan’s answer: “I go to great lengths to make certain there is a clear division between my law practice and my actions as a public official.”
But the Sun-Times reported last year that Madigan’s law firm saved a Chicago company that manages pension funds for the state, and employs Madigan’s son, more than $1.7 million in taxes on its new Downtown headquarters.
The conflict question made me wonder how ethics issues like this play out in other states, so I asked Better Government Association contributor John Slania, associate dean of Loyola’s School of Communications, to investigate.
Slania says ethics laws vary from state-to-state, depending in part on lawmakers’ salaries and whether their jobs are considered full or part-time.
Should Madigan, for instance, who is almost a full-time legislator earning $95,000 a year in base salary and add-ons, be governed by the same rules as Wyoming lawmakers who receive $150 a day during their annual one month sessions?
“There are a lot of factors that make comparisons difficult,” says ethics expert Mark Quiner from the National Conference of State Legislatures.
“Every state struggles with ethical issues and there’s no single correct approach.”
Illinois is about average when it comes to transparency, accountability and conflicts of interest, according the Center for Public Integrity’s latest State Integrity Investigation, which gave Illinois and a majority of states a grade of C.
Among Illinois’ shortcomings:
- Lax Laws. New reforms enacted after the impeachment of former Gov. Rod Blagojevich contain loopholes. For example, voters can recall a governor but not a lawmaker. And unlike many states, the Illinois Attorney General can’t empanel a grand jury to investigate corruption.
- Weak Enforcement. Lawmakers are on an honor system for reporting their own conflicts of interest, the Legislative Inspector General and the Legislative Ethics Commission are both appointed by the Legislative leaders, and lawmakers face no sanctions for their conflicts.
- Insufficient Transparency. Legislators have to report outside income over $5,000, but not the total amount earned or the specifics, and the disclosures aren’t audited.
Madigan’s latest ethics statement is a monument to opacity. He lists his source of outside income as his law firm, but when the form asks for more detail—”the nature of professional services rendered…exceeding $5,000″—Madigan writes: “Legal services for various individuals, partnerships and corporations.” Informative? Hardly.
“Illinois’ ethics laws don’t have any teeth,” says Kent Redfield, emeritus professor at the University of Illinois at Springfield. “Lawmakers say, ‘trust me.’ That’s not an ethics policy.”
Suggestions for reducing conflicts of interest include:
- Prohibiting or limiting outside income. No state has done that yet, but proposals are pending in New York and Pennsylvania.
- Raising lawmaker pay so there’s less need for second jobs. Former Commerce Secretary and ex-White House chief of staff Bill Daley, whose father and brother ran City Hall in Chicago for nearly half a century, suggests legislative salaries much higher than the current base level—$68,000—along with a ban on outside income.
“That,” Daley predicts, “would do more than anything else to reduce the conflicts that corrupt state government.”
- Putting teeth in existing ethics laws by requiring full disclosure of outside income, imposing tough penalties for conflicts, and giving voters the power to recall corrupt lawmakers.
- Giving the attorney general more investigative powers.
All good ideas that merit serious consideration—some, in fact, would be game changers, and others have been suggested before—so the ongoing challenge is to convince Madigan and his Springfield colleagues to embrace reforms that would affect them in ways many would rather avoid.
As Shakespeare put it, “Ay, there’s the rub.”