Illinois, which has often served as this author's home state away from her home state, is rapidly descending into what can not rightly be called anything other than political, legal and financial clusterfucking chaos.
Governor Rod Blagojevich has refused to step down, instead taking pains to be seen repeatedly in prayer with a cross-section of prominent ministers, even in the wake of events that have cut open the tissue of state government to expose the normally hidden skeletal frame of Illinois- bleached white with corruption. This is an extraordinarily disturbing picture.
As if matters were not dim enough, the allegations against the Governor now include his purported withholding of $8 million from the Children's Memorial Hospital of Chicago and affiliated entities as retribution for the refusal of the hospital's CEO to make a $50,000 contribution to the Governor. (You stay classy, Illinois Politicos).
Frustrated with the multi-week impeachment process required by the General Assembly, Lisa Madigan, Illinois Attorney General and daughter of sometime Blagojevich foe and Speaker of the Illinois House of Representatives, Michael Madigan, moved the Illinois State Supreme Court to strip the Governor of his powers on the basis of incapacity, a measure typically reserved for conditions of medical disability or mental incapacity. This is beyond unprecedented- even in Illinois, Chicago, Cook County, or perhaps Pinochet's Chile.
While political squabbling may seem a small matter, payments to Medicaid patients, hospitals, pharmacies, nursing homes and schools numbering in the billions of dollars remain outstanding pending short-term borrowing efforts by the state. At issue is the requirement that Madigan certify borrowings to be free of any legal proceedings detrimental to state administration, which Madigan, for obvious reasons, refuses to sign off on in the face of the current crisis. It would be understating the matter to suggest that Madigan is manipulating the issue for her own personal gain. Holding Illinois as a fiscal hostage in pursuit of the cold sushi of political revenge for a thousand Blago slights is only mildly "you-stay-classier" than Rod's increasingly apparent "hold out to the last bullet" psychosis.
The crisis means that everything from food deliveries to prisons, gasoline for state troopers, or health care services that rely on state reimbursements could be frozen, and firms with significant state revenues and limited liquidity might have to shut their doors or file for protection from their creditors.
Even as this carries on, Blagojevich continues to sign legislation into law and otherwise conduct himself as if the office is unencumbered- hardly the case given that his chief of staff, John Harris, resigned owing to his own indictment in the bribery scandal.
Stripping a sitting, and uncooperative, Governor (who, despite appearing to be in dire legal straights, has not yet been convicted of any crime) of his executive powers through creative use of emergency incapacity rules-- rules designed to provide for a line of succession beginning with the Lieutenant Governor in a medical emergency-- strikes this author as deeply concerning and dangerous. A multi-week impeachment process, however, is equally alarming.
It will be interesting to see how events impact credit default swaps on Illinois issued debt. (Anyone have any quotes?) Either way, it can safely be said that corruption and its umbra has become so intrinsically linked to Illinois that the best course of action might be a quick jab of the finger to the "emergency reboot" button on Illinois' back panel. Retroactively disqualifying any Illinois political figure whatsoever (and I do mean all of them) from ever holding national office of any kind might also be a wise precaution at this stage. This may seem extreme, but this ass-fucking-backwards nonsense is entirely endemic to Illinois and only appears overt now because Rod is such an insecurity-driven megalomaniac that the normal pretense of concealment triggered by self-preservation urges in other Illinois politicians has left him entirely. The word "Illinois" on a political resume should henceforth simply be a codeword for "member of the national political blacklist."
(Oh, no, don't worry. I'm sure we'll still get the Olympics, Mr. Mayor).
Posted by guest , Dec 13, 2008 7:00AM
Great one!
Posted by guest , Dec 13, 2008 7:27AM
Nicely written and indeed chilling.
The retroactive bit is over the top though (either mention precise facts about precise individuals -- for instance about that particular individual if you do have real knowledge first-hand -- or keep silently investigating if in doubt, but stay balanced and nonpartisan).
Posted by guest , Dec 13, 2008 7:30AM
Well thought and written EP, a great journalistic piece.
You might want to submit it to an op-ed section (but they will want your real name).
Posted by guest , Dec 13, 2008 7:34AM
Thanks for the after hours post.
Hot Rod has made a mess for himself and his party. The odd things is, all of this people such as Rahm, Barrack, etc that have known and/or worked with Hot Rod either "kinda" knew he was a creep or had no idea what-so-ever and are, well, blind to severe political corruption.
Neither warms my heart to them.
The 2012 ticket should be Levin-E. Private
Posted by VOL IS KING , Dec 13, 2008 7:40AM
Say good night kenny boy....
Citadel Freezes Its Funds Through March
By JENNY STRASBURG
Kenneth Griffin's Citadel Investment Group barred investors from withdrawing any money from its two biggest hedge funds until at least the end of March, reflecting increased strain on the firm after its funds fell almost 50% this year on investment losses.
http://online.wsj.com/article/SB122912984145403367.html?mod=testMod
Posted by ep , Dec 13, 2008 8:27AM
"The retroactive bit is over the top though (either mention precise facts about precise individuals -- for instance about that particular individual if you do have real knowledge first-hand -- or keep silently investigating if in doubt, but stay balanced and nonpartisan)."
I was balanced and nonpartisan. I said every politician from Illinois. That includes all party affiliations without prejudice. What is more balanced and nonpartisan than mandatory, universal application?
Posted by guest , Dec 13, 2008 8:37AM
Blago is being a rational actor in this fandango.His only leverage is through staying where he is.Would Daley do anything differently if in his place?
Posted by ep , Dec 13, 2008 8:41AM
"His only leverage is through staying where he is."
Appointing himself Senator actually gives him somewhat better leverage.
Posted by guest , Dec 13, 2008 8:47AM
wow. you really showed your true nutjob colors on this one.
Posted by guest , Dec 13, 2008 8:50AM
Actually, because normally you seem more intelligent than the totally batshit insane you are demonstrating here, I'm going to give you the benefit of the doubt and assume that due to the timing of this post, you are drunk or passed out and this is one of your friends on your computer.
Posted by guest , Dec 13, 2008 8:57AM
@9/10
Why don't you respond to the content instead of personal attacks?
Posted by guest , Dec 13, 2008 9:12AM
i guess i just assumed that responding to a suggestion to ban the president elect from assuming the presidency because he is from the same state as a corrupt politician was not really necessary.
since thats not the case, i'll just counter with a suggestion of my own that might point you towards just a tiny portion of the titanic-sized iceberg of whats inane about the suggestions above. following ep's logic: since the financial system is in trouble but at lehman it is even worse / a clusterfuck, i say disallow anyone who ever worked at lehman to ever work in the financial industry ever again. starting...right....meow.
Posted by ep , Dec 13, 2008 9:32AM
When readers must resort to accusations of intoxication to avoid consulting their sarcasm dials, well, that just plain starts to look like projection.
Posted by guest , Dec 13, 2008 9:38AM
@12 do you really think that ep wants to establish a BLACKLIST? Or perhaps that comment was made for its comical value? My suggestion for you: go back to yahoo messageboard.
Posted by guest , Dec 13, 2008 9:42AM
Keep up the good work ep. I know this is your crazy time of year, Ol' Man Leland busting your hump.
Posted by guest , Dec 13, 2008 9:44AM
Bottom line: Blago is waiting to hear what Fitzgerald's offer is going to be before relinquishing his office. Just like Spitzer, he will resign if reassured that he won't get prison time.
Has anyone run the indictment through the sentencing guidelines? The length of sentence for fraud cases usually depends on the $$$ at stake, and this is such small potatoes (and involves the predicate conspiracy and attempt counts) that Blago can't be looking at a ton of time. Remember, he was so bad at this bribe business that he never actually closed a deal (according to the current indictment).
Posted by guest , Dec 13, 2008 9:46AM
p.s. - more intriguing is the suggestion that EP has a Chicago connection! One more piece of his/her secret identity!
Posted by guest , Dec 13, 2008 9:58AM
I think EP is on to something. Never trust someone who works at a hedge fund. The other day I loaned my HF friend 20 for lunch because he forgot his wallet. Then he told me he wouldn't pay me back until March and would only pay me $12. Unless I wanted the money now, in which case he had 20 unused $1 scratch lottery tickets. I hate that guy.
Posted by guest , Dec 13, 2008 10:13AM
@18
Awesome comment.
Personally, I'd take the scratch tickets as a promise of $12 from a HF guy in March is probably only worth $3 now and, assuming 1:4 odds on the scratch tickets, they are worth $5 with the potential for significant upside (versus no upside in HF).
Posted by guest , Dec 13, 2008 10:45AM
What an idiotic piece of writing.
Posted by guest , Dec 13, 2008 11:00AM
I think you meant, "Lisa Madigan, Illinois Attorney General, prospective gubernatorial candidate, and daughter of bitter, foaming-at-the-mouth Blagojevich foe and Speaker of the Illinois House of Representatives, Michael Madigan."
Otherwise, yeah, pretty much. This would be fun to watch if it weren't happening to us. If J to the 3 goes down, I'll be tempted to say it was all worth it, though.
Posted by TheSnarkmasterGeneral , Dec 13, 2008 11:08AM
Blacklisting (whitelisting?) all Illinois politicos while tempting seems a bit extreme as well as unfair.
Obama seems to have kept his nose clean which given the cesspool in which he came up is a remarkable accomplishment.
While so far nothing has come up that seems to impinge on the incoming President, why in God's name is Rahm Emmanuel acting so batshit crazy since this thing broke:
http://www.abcnews.go.com/Blotter/ConductUnbecoming/story?id=6449745&page=1
Posted by guest , Dec 13, 2008 12:47PM
I'm really surprised there are no, "Too long, didn't read"s, on this one.
Posted by guest , Dec 13, 2008 1:11PM
@14 - Actually, I know for a fact that ep has a blacklist, because I am on it.
Posted by guest , Dec 13, 2008 1:28PM
December, 2008 (Bloomberg)—After a successful hostile takeover of U.S. bank Citigroup, the Somali pirates are on track to secure a seat in the United States Senate. According to Pirate spokesman Ali Hashimi Mohammed, capital secured by Citigroup from the U.S. Treasury’s TARP program along with the booty of various captured ships is being used to finance a leveraged buyout of the seat previously occupied by President-elect Barack Obama. A letter of intent seen by Bloomberg puts the acquisition price at $1.2 trillion.
In a wiretapped conversation with Mohammed, embattled Illinois governor Rod Blagojevich said the seat “is a f****** valuable thing, you don’t just give it away for nothing.”
Mohammed countered that Citigroup’s corporate charter, now controlled by the Pirates, is itself “pretty f****** vaulable.” He noted that Citigroup’s capital requirements under Basel 1 currently allow them to finance the production of nearly $60 of loans for every dollar of capital.
“Capital requirements are a joke,” Mohammed told Blagojevich in the recorded call. “Our bank charter let’s us manufacture an unlimited amount of money with only a sliver of capital. I spoke to Bernanke yesterday and he wants us to lend, lend, lend in order to prevent deflation! He doesn’t care to whom or for what. So we’ll lend to ourselves to pay you for the Senate Seat.”
The Pirates have been able to raise $25 billion of fresh capital in order to increase lending. That figure includes the $20 billion government infusion into Citigroup last month, as well as the Pirates’ existing cash holdings of $5 billion from the sale of goods plundered from cargo ships in the Gulf of Aden.
At 60:1, the Pirates can use that capital to finance $1.5 trillion worth of new loans.
The Senate Seat is believed to be especially valuable as it will enable the Pirates to introduce legislation in Congress providing them with additional capital via TARP. With leverage ratios where they are and with no restrictions on the use of TARP capital, the Pirates could, theoretically, pay themselves tens of trillions of dollars in dividends.
“F*** me for not figuring this out first,” said Leon Black when asked for comment. Black, principal of private equity firm Apollo Managment, was famous for borrowing hundreds of millions against the assets of acquired companies in order to pay himself large dividends. “These Pirates are my f****** heroes!”
If they are able to squeeze out just $10 trillion over two years, which would be at the low end of expectations according to economist Mark Zandi of Moody’s Economy.com, it would imply an internal rate of return of 400%, enviable in today’s market.
In a twist, Bloomberg has learned that Federal Reserve Chairman Ben Bernanke financed the Pirates’ seizure of ships in the Gulf of Aden, a fraction of the proceeds of which were used to purchase Citigroup.
Asked by Bloomberg whether he knew about the Pirates’ pillaging, Bernkake said: “Did I know about it? Hell, I underwrote it. For the cost of two Kalashnikovs, an RPG launcher and a dinghy with an outboard I got $5 billion worth of assets that we can leverage at far greater rates in order to stimulate the U.S. economy. That’s a spectacular f****** return!”
Because the deal for the Senate seat has not been completed, other bidders are likely to emerge. Jesse Jackson Jr., believed to be “Senate Candidate #5″ in the wiretapped conversations of Governor Blagojevich, is one possibility. Bloomberg has learned that the Jackson family beer distributorship has applied to be a bank holding company in order to secure TARP capital to finance Jackson Jr.’s competing bid for the Senate Seat.
The distributorship was acquired in 1998 from Anheuser Busch, which sold the company to Jackson Jr.’s two brothers Yusef and Jonathan to resolve a boycott launched by their father Jesse Jackson Sr.
Jackson Sr. had alleged various and undocumented civil rights violations by Anheuser Busch. That dispute was resolved amicably after the sale of the distributorship to the Jackson family.
Living up to his nickname “Helicopter Ben,” economists anticipate that Bernanke will rain unlimited liquidity on all bank holding companies as part of a so-called “quantitative easing” policy meant to fight deflation.
“Yeehaw!” said Jackson Sr.
Posted by guest , Dec 13, 2008 1:59PM
Bess, dear - when was the last time? truly dear, you need to release sometimes, you are bordering on the verge of hysteria - HRS
Posted by Investorcluzo , Dec 13, 2008 2:06PM
didn't utah get the olympic nod only after successfully “negotiating” with the IOC? allegedly…seems to me, the good people from illinois have a more established record of back door dealings and would be even better positioned to deal with olympic extortionists. good luck, just hope that the state doesn’t go bankrupt first – it’s a little hard to sell new bonds when you’re already in default.
nice work ep.
Posted by Madmartigan , Dec 13, 2008 2:12PM
Yes IL is nuts...but hey at least Obama and RE are totally straight as an arrow, clean as a whistle right? Right?
You say "But didn't Obama and RE meet wi...
"LA LA LA LA" I can't hear you!
Posted by guest , Dec 13, 2008 2:15PM
What is worse IL or RI?
Reeezcooo Estavez... Rezcooooo!
good job ep
Posted by guest , Dec 13, 2008 2:16PM
Masters of the Universe 1.2 http://www.youtube.com/watch?v=T4YbXnPqQrc
Posted by guest , Dec 13, 2008 2:52PM
In one paragraph, you compare Illinois to Pinochet's Chile.
As a life-long resident of the Land of Lincoln and as one who has grown up (from Kindergarten to College) in the Illinois public education system, I take offense.
Sure, our leaders are corrupt. Sure they have tried to stifle the press. Sure they arrest political foes for their own gain. Sure, that's similar to Pinochet's Chile. But the key difference is that the water still runs and the snow still gets cleared.
This last point may seem trivial, but anyone who has ever been to Chicago in January understands why we can ignore the Democratic Machine as long as the snow gets cleared. (As a point of refence, while the rest of the state is held financially hostage, IDOT is still dutifully clearing the expressway costs be damned)
Posted by guest , Dec 13, 2008 3:05PM
Watching The One explain his reaction to this week is a little like Casablanca's Captain Renault being shocked, SHOCKED to find that there is gambling going on here! I can't wait for the next 4 years, great post.
Posted by guest , Dec 13, 2008 4:23PM
"Retroactively disqualifying any Illinois political figure whatsoever (and I do mean all of them) from ever holding national office of any kind might also be a wise precaution at this stage."
But Obama's going to bring us hope and change we can believe in.
Posted by guest , Dec 13, 2008 4:31PM
@26- when was the last time you learned to read?
"Posted by Equity Private, Dec 13, 2008, 3:20am"
Posted by guest , Dec 13, 2008 4:52PM
Madoff Scam. Idiot Nicola Horlick is a shining example of a cunt raising 5 children and pretending to manage money or the other way around.
Posted by guest , Dec 13, 2008 5:34PM
dire legal straits
Posted by guest , Dec 13, 2008 6:26PM
tl;dr
Posted by guest , Dec 13, 2008 6:39PM
If events in Illinois did nothing more than cause Obama to trade Rahm Emanuel to Pinchet's Chile for a player to be named later (and throw in Senator Dick Turbin as a show of good faith) this would all be worth it.
Posted by chernevik , Dec 13, 2008 8:00PM
EP, were you the Duchess of Qwghlm in a past and fictional life?
Posted by guest , Dec 13, 2008 8:05PM
The last paragraph is total authoritarian nonsense, it would make Pinochet proud. If you are not serious, write it an a way that would make that obvious. (Though Pinochet wouldn't have any trouble with blacklists, he just murdered his opposition, literally.)
We have elections where usually more than one candidate shows up. If they are all crooks, write someone in, or just don't vote, or run for office yourself if you are not a crook. What bullshit!
And gives us your solution to get Blago out of office immediately. (He may actually resign on Monday. Stay tuned.)
Posted by guest , Dec 13, 2008 8:20PM
#34 - they're all alike in the dark -
Posted by chernevik , Dec 13, 2008 8:56PM
"And gives us your solution to get Blago out of office immediately."
There is none that doesn't set up the Executive as Prime Minister to the Court, which Attorney General Madigan now proposes to install as King.
That's obvious. You don't seem very good at recognizing the obvious. You can get better at this by reading books. Please go get some, and come back when you are smarter.
Posted by guest , Dec 13, 2008 8:58PM
@41, here you go... http://wwwimage.cbsnews.com/images/2007/07/11/image3046890.jpg
Posted by ep , Dec 13, 2008 9:27PM
"Posted by chernevik, Dec 13, 2008 8:00PM
EP, were you the Duchess of Qwghlm in a past and fictional life?"
Depends if you think Stephenson writes fiction or not.
Posted by guest , Dec 13, 2008 11:32PM
@22 - "Obama seems to have kept his nose clean which given the cesspool in which he came up is a remarkable accomplishment" -- oh boy. well, there's one born every minute.
as an illinoisan, a chicagoan, and one who actually voted for obama, let me tell you all that anyone who thinks he's clean is drinking the koolaid. the president-elect is an illinois pol in bed with rahm and jimmy deleo, backed by rezko, alexi giannoulias and others even less likeable. he is as fucking dirty as any of them, and you're an idiot if you imagine otherwise. it's the chicago way. if he succeeded here, he's fucking dirty; he'd have been railroaded long ago if he weren't playing ball.
please note that obama, in issuing a catagorical denial of contact between his camp and blagojevich over the senate seat, has already told a lie to the press on this one -- and an easily outed one, as fitzgerald apparently has rahm on tape with blago. why are they lying? money is on rahm discussing a quid pro quo with blago. that's why rahm apparently went to the feds and told them how to get blago -- i'd frankly wager rahm tried to get fitzgerald to firewall the investigation from the obama camp on good-for-the-country grounds, and maybe even with more information. fitz is also talking to his future boss -- the fact that he went public with blago now may be because he think he'll be shut down come january 20 because he might know too much.
if this sounds speculative, i submit you haven't been watching illinois politics long enough. history shows that chances are i'm underestimating the depth of the filth on all sides. this country's politics would get a lot cleaner if every illinois pol past and present were crowded into soldier field, the doors locked and the joint set on fire.
Posted by ep , Dec 13, 2008 11:42PM
"this country's politics would get a lot cleaner if every illinois pol past and present were crowded into soldier field, the doors locked and the joint set on fire."
In addition to the fact that the "alien-saucer crashed on a once pretty field" edifice might finally be removed from the south-to-north view of the skyline.
Posted by stimpy tec , Dec 14, 2008 5:08AM
'"EP, were you the Duchess of Qwghlm in a past and fictional life?"
Depends if you think Stephenson writes fiction or not.'
Since the only element of the answer to that question which depends on the truth-value of Stephenson's writings is whether the Duchess is fictional, it seems we can conclude that EP was indeed Duchess of Qwghlm in a past life; we just don't know whether it was a *fictional* past life.
Posted by guest , Dec 14, 2008 9:04AM
@47
As fictional as Muffie.
Posted by guest , Dec 14, 2008 10:50AM
Senator Hot Rod !!
Posted by chernevik , Dec 14, 2008 2:03PM
You have improved the man's work, which I hadn't imagined possible, and so supplied another datum for my suppositions.
I would now prefer to move the author to the history shelf, but explaining this would be awkward. Perhaps he'll go to the math shelf, or philosophy, either of which discuss various ideal types.
Enjoy the day.
Posted by guest , Dec 14, 2008 7:10PM
couldn't agree with you more!
Posted by guest , Dec 14, 2008 9:03PM
Ah, Democrats!
Posted by guest , Dec 14, 2008 11:28PM
@45, well said. Though... if you knew Obama was dirty, why did you vote for him?
Posted by guest , Dec 15, 2008 11:11AM
So Hot Rod hired Genson, huh? Big Eddy loves sure losers. What was the last high profile corruption case in which he actually obtained an acquital?
Posted by guest , Dec 15, 2008 12:50PM
@46 - TMQ fan?
Posted by Dwight , Apr 01, 2009 1:52AM
TARP allows the United States Department of the Treasury to purchase or insure up to $700 billion of "troubled" assets. "Troubled assets" are defined as "(A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability; and (B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress." To read more about this topic, chechk out at: http://personalmoneystore.com/moneyblog/2009/03/30/fox-nation-part-2/