Rauner Housing Appointee Out Amid Allegations

Chairman of Illinois Housing Development Authority board is ousted as governor forwards “pay-to-play” accusations to inspector general.

Gov. Bruce Rauner forced out the Illinois Housing Development Authority chairman – a clout-heavy figure with past ties to the UNO community group – amid allegations that the Rauner appointee used his state-government post to try to steer developers to his family’s consulting business.

The accusations were detailed in an anonymous letter claimed to be written by a long-time developer who, when meeting with then-IHDA Chairman Joseph Galvan, was allegedly told that hiring Galvan and Associates, a Lockport consulting company run by Galvan and two brothers, would help his cause at IHDA, an agency that steers millions of dollars toward affordable housing.

The letter describes the behavior as an attempt at “pay-to-play,” and said other developers had similar experiences.

Galvan, who’s been serving as IHDA’s chairman since last May, wouldn’t comment directly on allegations.

“I have 30 years of public service and it’s the first time anyone has accused me of anything like this,” Galvan said. “It is the governor’s decision and I stand by that. I’ll just defer to whatever comments they have.”

Two days before Galvan was forced out, the Better Government Association – prompted by the allegations in the letter, which was mailed to the BGA – sent a Freedom of Information Act request to IHDA asking for Galvan’s official schedule, as well as information on IHDA spending and other records. They have not yet been turned over.

The same anonymous letter was also sent to certain state officials, and the Rauner administration ended up reviewing the accusations and withdrawing Galvan’s appointment, which had not yet been confirmed by the state Senate, said Rauner spokesman Lance Trover.

“While an anonymous letter, on its own, is not evidence of guilt, the Governor’s office takes allegations such as these very seriously,” Trover said via email. “Out of an abundance of caution, we have withdrawn Mr. Galvan’s appointment to the IHDA board.”

The Rauner administration also forwarded the matter to the executive inspector general’s office, which investigates potential wrongdoing by state employees, Trover said.

The inspector general’s office wouldn’t comment, saying it’s not allowed to confirm or deny the existence of a probe.

Until having his appointment to IHDA withdrawn, Galvan attended and voted in monthly meetings in the unpaid position of IHDA board chairman. Described as a public bank, IHDA subsidizes mortgages and makes loans for the construction of affordable apartment buildings by selling federal tax credits and using other revenue sources.

A former U.S. Department of Housing and Urban Development official, Galvan campaigned for Rauner with the Latino group Amigos de Rauner-Sanguinetti in the 2014 gubernatorial election. Rauner, a Republican, appointed Galvan to the IHDA position in May 2015 after Latino lawmakers had criticized him for not hiring enough Latinos. The Illinois Senate, controlled by Democrats, never approved Galvan’s appointment.

Alyssa Rapp, the co-chair of Rauner’s economic development transition team, and Galvan are the only two Rauner appointees on the IHDA board. IHDA board member Cristina Castro said she saw the anonymous letter and forwarded it to IHDA’s attorney, but declined further comment.

IHDA board members Salvatore Tornatore and Karen Davis declined to comment. Board members Mary Kane, Harlan Karp, William J. Malleris and Rapp could not be reached for comment.

Galvan was appointed by Rauner just weeks after losing an election for Elgin mayor, a campaign that was largely self-financed by Galvan and one of his brothers. In 2014, Galvan also served on the board of Chicago-based UNO, a once-politically powerful Latino community group known for spawning a charter school network.

Galvan made a name for himself in Illinois Republican circles in late 2001, when President George W. Bush appointed him to oversee the six-state regional HUD office, a job he held until January 2009. He previously worked in community development for the municipal governments in Country Club Hills, Franklin Park and Maywood before he left in 1997 to work for Galvan and Associates, a consulting firm that specializes in IT work, financial management, business management, and housing and economic development.

USASpending.gov, a web site that tracks federal spending, shows that Galvan and Associates, which Galvan runs with his brothers John and Stephen, has received more than $20.1 million from the federal government from 2008 to 2015.

Stephen Galvan, who worked for the U.S. Small Business Administration under the Bush administration, referred all inquiries to Rauner’s office. John Galvan couldn’t be reached.

Serving on Galvan and Associates’ “Galvan Advisory Board” is Jovita Carranza, another former Small Business Administration official, whom Rauner appointed to the Illinois Enterprise Zone board last March. Carranza was part of the “Latino Working Group” that Rauner convened in April to focus on concerns of Latino businesses and family. She also campaigned for Rauner’s election and contributed $1,600 to Rauner’s campaign in 2014. Carranza could not be reached for comment.