You’ve probably never heard of Andrew Hamilton. But if you’re
an Illinois business looking for an edge, he might be your man.
Hamilton is an Illinois government official who for more than a decade has also
been running a closely related side business. His story speaks to a number of
problems in Illinois, including the state’s glut of governments, poor
transparency, punishing business climate, and the appearance of pay-to-play
politics. Thankfully, it appears Gov. Bruce Rauner is taking action to remedy
the problem.
Here’s the scoop.
Illinois is officially home to 10 regional development authorities, or RDAs, the
power of which rests primarily in their bonding authority. RDAs can secure
longer-term financing at a lower interest rate on behalf of private businesses,
and can help establish enterprise zones, which come with their own subsidies and
tax perks. The authorities are spread out all over the state in areas that have
been identified as needing extra special economic development assistance
tailored to their region.
Hamilton is listed as the executive director of eight of the 10 RDAs in
Illinois.
Authorities all over the state – from the Upper Illinois River Valley
Development Authority (where he’s served since 1994, according to Hamilton’s
bio) to the Will Kankakee Regional Development Authority (1996) to the
Southeastern Illinois Economic Development Authority (2005) – are under his
watch. Hamilton’s authorities have facilitated hundreds of millions of dollars
in financing to businesses over the years, as well as enterprise zone benefits.
Hamilton is clearly a man of many hats. But some of those hats should raise
eyebrows.
While serving in a leadership role for authorities that specialize in granting
government-backed development deals to businesses, Hamilton is a key player in
at least two private entities that sell their ability to secure
government-backed development deals for businesses. Sounds like good work if you
can get it.
The first one of those private businesses is called Opportunity Alliance, which
Hamilton helped found. He lists all of his RDA positions in detail on the
company’s website, which boasts its ability to secure state enterprise zones and
tax abatements, as well as “government access services.” Clients include
Phillips 66, Walgreen Company, Monsanto and Motorola Mobility.
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Hamilton also has a company called Financial
Solutions, “a private firm that assists business and government in
obtaining governmental financing which includes tax free bonds,
loans and loan guarantees.” He started that business in 1993, one
year before becoming executive director of the Upper Illinois River
Valley Development Authority.
There is no crystal clear evidence of wrongdoing here. But part of
that is because these authorities provide too little information to
the public. In an email, Hamilton said an RDA over which he has
authority has never approved a deal benefitting a client.
The real problem is perception. More specifically,
the perception that Hamilton is collecting money from businesses via
his private firm in exchange for loans and financing from the
government that he himself gets to administer.
And that’s the reason Illinoisans have less trust in their state
government than residents of any other state. This type of behavior
breeds cynicism and apathy in the voting public, not to mention the
businesses that just want a level playing field, rather than get
involved in legalized corruption.
Illinois has long dwelled at the bottom of business friendliness
metrics. But the state really has two distinct business climates,
one for the connected and one for the uninitiated. It pays to be
operating in the former climate. And businesses like Hamilton’s
might be able to open those doors.
His perks might not last very long, however, if reform efforts from
the Rauner administration find favor in the General Assembly. In
early May, the governor’s office sent a letter to the Illinois
Department of Commerce and Economic Opportunity requesting that the
agency stop approving any enterprise zone applications brought by
RDAs until state lawmakers are able to pass a number of reform
measures.
Among them?
“[T]hat no person with any form of financial interest or business
relationship, formal or informal, in any economic development
consulting, lobbying, or advising business may serve as an RDA
executive.”
“[T]hat no person serve as the Executive Director of any more than a
single RDA.”
…and,
“[T]hat the executive director of each RDA have his/her primary
residence in one of the counties covered by the RDA.”
Welcome changes all.
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