Ill. Fundraiser Gets $900,000 No-bid State Contract as Special Examiner

August 30, 2006

A prominent Democratic fundraiser for Gov. Rod Blagojevich was awarded a $900,000 no-bid state contract months after being cut from an investment proposal that has drawn scrutiny from federal investigators, according to a published report.

The Blagojevich administration awarded Chicago attorney Myron “Mike” Cherry a contract to represent Illinois in a three-state investigation of insurance brokers in December 2004, the Chicago Sun-Times reported.

Cherry’s fees as a special examiner for the Department of Financial and Professional Regulation totaled $900,000, the agency said.

Cherry has not been accused of any wrongdoing. He got the contract because of his qualifications and his six months of work resulted in $260 million in restitution to policy holders, said Susan Hofer, a spokeswoman for the financial and professional regulation department.

Earlier, in April 2004, Cherry was part of an unsuccessful $25 million investment proposal that Sterling Venture Partners pitched to the $36.4 billion Illinois Teachers Retirement System pension fund.

Sterling identified Cherry as a “consultant” on the proposal, with a $250,000 salary, according to a company document filed with the retirement system and obtained by the Sun-Times through a Freedom of Information Act request.

Staff at the pension agency objected to Cherry’s involvement because he “had not participated in any evident way with the potential TRS investment,” Teachers Retirement System Executive Director Jon Bauman said in a memo to former board Chairman Randy Dunn. Sterling dropped Cherry from the deal, which ultimately was not chosen by the retirement system.

Cherry did not immediately return a message left for comment by the Associated Press. He is linked to at least $60,000 in contributions to the governor.

U.S. Attorney Patrick Fitzgerald’s office last year subpoenaed records from the Illinois Teachers Retirement System about the Sterling deal and several other investments.

Fitzgerald said in June that Blagojevich’s administration is under investigation for “very serious allegations of endemic hiring fraud” that have implicated several state agencies, including the Teachers Retirement System.

Blagojevich has denied any improper conduct and has not been charged with any crime. His office referred questions about Cherry to the Department of Financial and Professional Regulation.

Jay Stewart, head of the watchdog Better Government Association, said the Cherry example shows Blagojevich is coming up short on his promise to reform “business as usual” in Springfield.

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