A judge on Wednesday scheduled a hearing for late January on a lawsuit alleging a company owned by a politically connected lawyer and lobbyist violated the rules of a lucrative state contract by failing to disclose that a former state senator and a prominent Springfield lobbyist profited from the deal.
The case involves a program meant to address the issue of slow payments from the state to contractors. More than a decade ago, the state started allowing certain contractors to buy up unpaid bills from the state, then collect the late fees. Under the rules of the program, participating businesses must disclose every person or entity that has a financial interest in it, according to the complaint filed by the law firm of attorney Michael Forde, a onetime lawyer for former Mayor Rahm Emanuel.
One of the companies that got in on the program was the Vendor Assistance Program owned by Brian Hynes, a longtime political insider who has worked closely with indicted former House Speaker Michael Madigan. The lawsuit states that Hynes’ company and associated trusts purchased $5.7 billion in receivables through the state program, but assigned many of them to “a vast network of third parties” and granted “profit participation rights to individuals never disclosed to the state.”
Those getting a share of the profits included former Democratic state Sen. James DeLeo and veteran Republican lobbyist Nancy Kimme, according to the lawsuit. The complaint says that in 2018, VAP and associated businesses made an agreement that DeLeo could be paid 1% of profits from those companies, resulting in DeLeo making hundreds of thousands of dollars over the next four years.
The companies made a similar deal with Kimme, former chief of staff for Comptroller Judy Baar Topinka, in 2020, the complaint said. Kimme was registered to lobby on behalf of VAP for about two years but her financial interest in the company was never disclosed to the state, the complaint said.
Because these profit agreements weren’t disclosed, the state was unaware of who held financial interests in the company, the complaint says. The agreements and other conduct from the company amounted to making false claims to the state, the lawsuit states.
“All of this matters because the State did not get what it bargained for in allowing VAP and VAP Trusts to participate in the Program,” the complaint states, adding that the state “was left in the dark about who stood on the other side of its deals, including former officials and lobbyists.”
The initial lawsuit was previously dismissed but plaintiffs last month filed an amended complaint that included the allegations that DeLeo and Kimme were undisclosed recipients of profits from VAP’s contract with the state.
A spokesperson for VAP said in a statement that plaintiffs “continue to peddle false accusations, in spite of the court’s ruling and Illinois law that prove VAP has met all state requirements.
“We look forward to next steps that will help repair the damage committed by the plaintiffs to our reputation,” the company’s statement said.
Neither DeLeo, who left the state Senate in 2010, nor Kimme could immediately be reached for comment.
In a hearing at the Daley Center on Wednesday, Judge Jerry Esrig scheduled a hearing for Jan. 31 on a motion to dismiss the amended complaint and said he hoped to rule the same day.
