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  • The Blago Administration: A Tale of Abused Power, Corruption, and Eventually Justice


    10/3/2013



    By Tom Hanlon

    Typically, auditor generals are behind-the-scenes guys, toiling in obscurity and anonymity.

    And William Holland, auditor general for the state of Illinois, prefers it that way. But a few corrupt governors – George Ryan, in office from 1999 to 2003, and the infamous Rod Blagojevich, in office from 2003 until he was impeached in early 2009 – brought Holland necessarily into the spotlight as he caught wind of the corruption and testified against Blagojevich.

    Holland, who had been the state’s auditor general for 11 years when Blagojevich assumed leadership of the state, spoke to students recently at a Department of Accountancy Lyceum of his role in the impeachment of Blagojevich.

    “The story really begins in the spring of 2002,” Holland said. He spoke of the corruption scandal of then-governor George Ryan, who was indicted, convicted and sent to prison for at least five years for receiving vacations, money, tickets to events and other items totaling more than $167,000 after serving one term as governor. Investigation of the scandal led to a 22-count federal indictment, a decision by Ryan not to run for reelection in 2002, and, eventually, a prison term for Ryan that ended this summer.

    Out of that mess, the people of Illinois yearned for change – which Blagojevich promised. It was a promise he delivered on, Holland said – but not in a good way. “Ryan had received vacations, money, and other goods that totaled $167,000,” he remarked. “This pales in comparison to the dollar value of the crimes that Blagojevich committed.”

    Blagojevich, who promised “reform and renewal,” ushered in sweeping changes as he settled in as governor. Many state officials, Holland said, took advantage of the state’s offer of early retirement, opening the door for Blagojevich’s people to come in – “generally people who had little experience or technical knowledge to replace the people who had retired,” Holland noted.

    “My early experience with this new administration was that people who were placed in significant positions of responsibility did not appear to be interested in understanding the fundamentals of state government,” Holland added. “But they were comfortable with their attitude, which was quite simply, we will do it our way.”

    Holland pointed out that every new administration has the right to put its imprint on a government. “But where I do object is when the underlying principles of government and in some cases the laws of government are discarded and replaced with a sense of electoral entitlement. This new administration felt that winning the election gave them the right to do whatever they wanted to do, when they wanted to do it, and how they wanted to do it.”

    In the first three months of the new administration, Holland believed the problems he was experiencing or witnessing were due to “inexperienced players who lacked the understanding of the processes of government.”

    That view, however, began to change after he got a call from the director of Central Management Services (CMS), a state department established to deliver programs and services to state agencies, the Illinois business community, and local governments. The director assured Holland that he wanted “the transition” (of auditing services) to go smoothly.

    “I asked him if he knew about the Illinois constitution,” Holland said. “He assured me he did. I said, ‘I don’t think you do.’ “

    Blagojevich, in his attempt to control various functions of state government, had issued an executive order to transfer the Illinois Auditor General’s office under him. That is not what the constitution calls for – with good reason, because such a structure could easily lead to corruption.

    “As I look back at subsequent events, I’m not so sure this was not a conscious attempt to achieve a nefarious outcome,” Holland told the students. “This appears to be an early attempt to control all aspects of the state government. I believe they thought if they controlled my office they would minimize the adverse consequences that sometimes arise with independent audits.”

    His office’s first round of audits, reflecting a full year under Blagojevich, “contained more significant findings than I ever expected,” Holland said. “Taken individually, these findings would be cause for concern. Collectively, these findings raised serious doubts about the transparency and integrity of CMS.”

    Holland noted that hundreds of thousands of dollars of expenses were not supported by, or even in, any documentation. This resulted in questioning that ended with the administration’s “full-out attack” on the Auditor General’s office. “They attacked our credibility,” Holland said. “They wanted to remove my office as an obstacle.”

    This resulted in Holland stepping, however briefly, into the spotlight.

    “I held my first, and hopefully last, press conference,” he said. “I explained our thought process and answered every question. My press conference was a success.”

    The administration publicly backed down, but privately continued to try to intimidate the Auditor General’s office. But a pattern had been set, and for four years Holland’s office encountered information about the administration’s dealings that “demonstrated a pattern of misconduct and an indifference for the law.”

     Blagojevich was impeached by a 114-1 vote in the Illinois House in January 2009, and indicted on corruption charges three months later. He eventually was found guilty of 17 charges of corruption (including wire fraud, attempted extortion, and conspiracy to commit bribes), and in 2011 was sentenced to 14 years in prison.

    Holland testified during the impeachment process. “I made sure my testimony was unemotional. I avoided hyperbole. I thought the facts were damning enough,” he said. “The substance of my testimony showed a pattern of misconduct and abuse of power by the governor.”

    The Auditor General’s office in effect was embroiled in a morality play for several years with Blagojevich’s administration. One side took the high road, refusing to be corrupted or to take part in corruption. The other side was bent on power and glory, and was stripped of both.

    And William Holland stood up for the people of Illinois in playing his role in the impeachment process of Rod Blagojevich.

    UIUC College of Business Department of Accountancy