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 But corruption in Illinois is more than a buzzword. It comes
with social and economic costs. Not only does corruption lessen residents’ faith
in the government, it decreases economic growth and disincentivizes investments
in the state.
Illinois’ public corruption convictions cost the state economy an estimated $550
million every year from 2000-2017, the Illinois Policy Institute estimated
according to a 2011 study published in the peer-reviewed academic journal
“Public Choice.” That’s a total during those 17 years of more than $9.9 billion.
Federal corruption convictions per capita were 8% more common in Illinois than
in other states during that time period.
The annual loss of economic activity means the 285,000 Illinoisans actively
seeking employment find it harder to land a job, and the state economy will
likely continue to lag the rest of the nation.
ILLEGAL CORRUPTION RUNS RAMPANT
It is no secret that Chicago has a longstanding tradition of political
corruption. Now that criminal investigations are threatening to drag in a string
of Chicago leaders, it does not look like that tradition is going away anytime
soon.
On June 24, former Chicago Ald. Willie Cochran, 20th Ward, was sentenced to more
than a year in prison for wire fraud.
On June 19, Ald. Carrie Austin, 34th Ward, had her offices raided as part of a
corruption investigation.
In May, Chicago Ald. Ed. Burke, 14th Ward – the city’s longest serving alderman
– was indicted on 14 counts of racketeering, attempted extortion, conspiracy to
commit extortion and using interstate commerce to facilitate an unlawful
activity.
In 2017, former Chicago Public Schools CEO Barbara Byrd-Bennett was sentenced
for a $23 million corruption and kickback scandal.
Corruption in the city of Chicago can be traced back decades and earns the city
recognition as the most corrupt in the nation. Federal prosecutors in the
judicial district covering Chicago and northern Illinois have obtained 1,731
corruption convictions since 1976.
These figures do not include corruption prosecuted in local courts or crimes
that have gone undiscovered. The actions of which Burke has been accused likely
have been commonplace for decades in Chicago and stifled the city’s business
environment, especially for small businesses, according to a study from the
Journal of Business Ethics.
But corruption in Illinois extends beyond Chicago. Four of the past seven
Illinois governors have gone to prison. FBI tapes of recorded conversations
between Gov. J.B. Pritzker and then-governor, now-federal inmate Rod Blagojevich
revealed discussions of a potential appointment of Pritzker to public office and
future campaign donations to Blagojevich. And while unrelated to his public
office, the governor has come under federal investigation for a scheme to avoid
property taxes by taking toilets out of a Gold Coast mansion.
The Blagojevich tapes also include conversations about Illinois House Speaker
Mike Madigan. Blagojevich suggested Madigan might be willing to push through
Blagojevich’s legislative priorities were he to appoint Madigan’s daughter,
then-Illinois Attorney General Lisa Madigan, to the U.S. Senate seat vacated by
President Barack Obama.
Madigan’s inner circle is being targeted by federal agents, who are
investigating $10,000 in payments to former high-ranking Madigan political aide
Kevin Quinn, brother of a Chicago alderman. The payments came after Madigan
ousted Quinn from his political organization in 2018 after campaign worker
Alaina Hampton accused Quinn of repeated sexual harassment. The Quinn money came
from accounts linked to five current or former lobbyists for utility company
Commonwealth Edison, including one of Madigan’s closest confidants, according to
the Chicago Tribune.
The criminal investigation of Chicago Ald. Danny Solis, 25th Ward, also included
recorded conversations between Madigan and a hotel developer who had been
directed to Madigan’s law firm by the alderman. While the investigation into
Solis hasn’t resulted in any allegations of illegal conduct for the nation’s
most powerful House speaker, it highlights another issue with Illinois’
political machine: legal corruption.
WHAT IS LEGAL CORRUPTION?
Corruption is often defined as using public office for private gain. And while
bribes and other criminal tactics garner the most attention, they barely scratch
the surface of corruption in Illinois. Legal corruption refers to legal
establishments, such as: Chicago’s aldermanic privilege that gives aldermen
total control over ward matters; gerrymandering that allows elected officials to
draw maps that favor their re-election; procedural rules that give unchecked
power to the House speaker; the revolving door between the Statehouse and the
lobbying industry; and ethics laws that allow legislators to double as property
tax appeals attorneys. Both Madigan’s and Burke’s law firms handle property tax
appeals.
Cumbersome and highly restrictive governments such as Illinois’ foster
environments where corruption festers.
Democrats and Republicans have long engaged in legal corruption such as
pay-for-play schemes. Illinois is no exception. According to a study by Harvard
University that ranks all U.S. states, excluding Louisiana, Illinois ranks in
the top 10 for both legal and illegal corruption.
The study shows Illinois ranks as the second-most corrupt state when all types
of corruption are included – both legal and illegal – surpassed only by
Kentucky. Beyond individuals who are convicted of corruption-related crimes,
Illinois’ executive, legislative and judicial branches all measure in the top
10% of most-corrupt states in the U.S. when evaluated individually.
While some lawmakers use both legal and illegal methods to line
their pockets and those of their friends and associates, Illinois residents are
seeing fewer job opportunities and a stalling economy.
ECONOMIC EFFECTS OF CORRUPTION
Corruption lessens residents’ faith in the government. It decreases economic
growth and disincentivizes investments in the state.
While the most observable cost of corruption is bribes, corruption – both legal
and illegal – also results in the misuse and misallocation of resources.
Illinois’ history with corruption not only reduces the potential for future
investments by slowing economic growth, but bolsters the state’s reckless and
unethical spending.
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Governments that use spending to dispense political
favors or to delay permits and licenses also impact the economy,
inhibiting individuals from investing and remaining in the state.
Private businesses are often unable to overcome
corrupt and burdensome regulator practices, limiting their
prospective growth, diminishing productivity and hindering
innovation. Entrepreneurs may limit new investments in fixed capital
so they can credibly threaten to leave a state should bribe demands
become too high. At the same time, uncertainty raises transaction
costs above those for a tax of the same magnitude.
Corruption has been directly linked to decreased investments from
abroad and slower economic growth. It is no surprise that Illinois
is lacking in economic and job growth. States with higher levels of
corruption experience higher levels of residents leaving and lower
levels of real income per capita, as fewer new firms enter the
market and existing firms have less incentive to invest. In a study
that compared all 50 states’ gross state products, states with
higher levels of convictions for corruption have lower production
per worker and slower economic growth.
New York, Florida, California and Texas all have lower levels of
corruption than Illinois, with Texas having the lowest levels of
corruption of the five largest state economies.
Illinois has the slowest economic growth of the five most populous
states and the highest level of corruption. As tax burdens increase
for Illinois residents and corruption remains prevalent in all
levels of Illinois government, Illinois residents will continue to
suffer from a sluggish economy compared to other states.
Illinois’ role in the national economy has declined
steadily since the 1960s. An economy that was once the third-largest
contributor to the nation’s GDP has continued to slip, being passed
by Texas and Florida. This shouldn’t come as a surprise, because
states with higher levels of corruption on average see lower levels
of investment and economic growth. Using data from all 50 states
from 1975-2000, corruption was found to play a significant and
causal role in reducing economic growth.
To put the findings in context, Illinois’ public corruption
convictions cost the state an estimated $550 million every year from
2000-2017.
Illinois ranks 40th in cumulative economic growth, out of 50 states
and Washington, D.C., in gross state product from 1997-2018. With
real economic growth of just 1.35% annually on average, Illinois
trails the U.S. economy with real economic growth of 2.31%.
Meanwhile, the fastest growing state economy in the
country, North Dakota, has the lowest level of corruption of all 50
states. Wyoming and South Dakota are also in the top 10 fastest
growing economies in the country and both fall in the lowest
quartile of corruption by state. States such as Kentucky and New
Mexico, the first and fifth most corrupt states respectively, offer
a pathetic 36th and 44th ranking in economic growth.
If Illinois wants to break out of its trend of underperformance and
compete with the other big-economy states, it could start by doing
something about its corruption problem.
ROOTING OUT CORRUPTION
Both new Chicago Mayor Lori Lightfoot and Pritzker need to address
the long-standing corruption within the city and the state. For one
thing, taxpayers can no longer bear the burden of reckless spending
associated with corruption. But also, addressing the problem could
lead to job growth and bring economic investment back to the state.
There is some movement in the right direction. Lightfoot’s campaign
slogan was, “It’s time to bring in the light.” She has already
convinced aldermen to pass ethics reforms and pledged to end
aldermanic privilege, which allows aldermen to micromanage the
day-to-day activities of businesses and homeowners through power
over permitting, zoning and more rather than concerning themselves
with citywide policy. As scandals engulf Chicago, aldermen should
commit themselves to increased transparency and structural reforms
that would change the culture of corruption and focus on governing.
Lightfoot has also advocated for independent ward maps to reduce
aldermanic control over the process. But while Pritzker campaigned
on a fair maps initiative at the state level, he didn’t touch the
policy in his first legislative session.
The governor should also follow Lightfoot’s lead in advocating for
legislative reforms. A starting place would be to ask state
lawmakers to reform the legislative process to allow for bills to
more easily move out of the Rules Committee, improving the
legislative calendar so that lawmakers know when bills will be
discussed and limiting the ability of the House Speaker to
substitute lawmakers in and out of a committee, which can alter the
result of the committee vote.
Pritzker should also advocate for tighter ethics laws. Illinois is
currently considered one of the worst states when it comes to laws
inhibiting a revolving door of lawmakers becoming lobbyists.
Furthermore, in April 2019, former Legislative Inspector General
Julie Porter criticized the structure of her former office, which
investigates potential ethical issues within the General Assembly.
Because the inspector general can be denied the ability to open an
investigation by the legislative ethics commission, Porter stated,
“Unless and until the legislature changes the structure and rules
governing the LIG, it is a powerless role, and no LIG – no matter
how qualified, hardworking and persistent – can effectively serve
the public.” Leaders should empower Illinois’ top lawmaker watchdog
to provide basic oversight.
The governor could also borrow initiatives from previous General
Assemblies, such as barring legislative leaders from acting as party
chairperson and banning state and local lawmakers from participating
in property tax appeals cases.
Pritzker should follow the lead of his fellow freshman executive,
but both he and Lightfoot must do more to reduce the harmful effects
of Illinois’ political machine. Curbing both legal and illegal
corruption is an important step in ensuring that families and
businesses feel secure to invest in Illinois.
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