In an unusual transaction, retired Illinois Senate President John Cullerton obtained a personal loan from a politically affiliated Chicago bank using money from his campaign fund as collateral, the Chicago Sun-Times learned.
The deal allowed Cullerton to bypass the campaign funding disclosure requirements that would have been triggered if he had borrowed or withdrawn the money directly from his campaign fund.
While answering some questions from the Sun-Times about the deal, Cullerton declined to provide any record of the transaction. The maneuver does not appear to violate Illinois ethics laws, based on information provided by Cullerton.
In response to questions, Cullerton confirmed by email that on October 20, 2014, he received a personal line of credit of $ 75,000 from Belmont Bank & Trust Co.’s Board of Directors.
Six months earlier, Cullerton had deposited $ 100,000 in campaign money from its citizens for the John Cullerton Fund on a receipt at the bank.
Cullerton said the certificate of deposit was used as collateral to secure his personal line of credit. The bank later increased the credit line to $ 110,000, he said.
The senator said he used the loan to pay “family expenses” but did not provide details.
April 2019, the credit line was fully repaid, said Cullerton. He said he used his own funds to repay it.
“I fully obeyed the law; any suggestion to the contrary would be wrong, ”Cullerton wrote in his email to the newspaper this week.
Cullerton said he was entitled to use the $ 100,000 CD under the 1998 revision of the state’s ethics laws aimed at restricting the use of their campaign funds by Illinois politicians.
The law prohibits elected officials or candidates from using campaign funds to pay themselves or family members unless they are compensated for “services actually provided by that person”.
However, a grandfathering clause was also created which allows anyone who had an election fund at the time the law came into effect to convert an amount equal to their fund balance as of June 30, 1998 into personal use.
Cullerton had $ 107,867 in campaign accounts that day, which the grandfather clause allowed him to keep for personal use. Officials must pay income taxes on all campaign funds converted.
Most elected officials covered by the exemption wait until they leave office to receive the money, in part because of the potential political implications. When they withdraw the funds, they have to make it public.
In Cullerton’s case, he was not required to disclose campaign funds as collateral as his certificate of deposit remained with the bank.
Likewise, state law would have allowed Cullerton to borrow the money directly from his campaign fund, although that would also have created a disclosure requirement.
State law prohibits politicians from using campaign funds to “repay personal loans”. It also prohibits them from using campaign funds to repay debts related to personal residence. It even forbids them to use campaign funds as “collateral for home mortgages”.
However, there is no explicit prohibition on politicians taking out campaign funds or using campaign funds as collateral for personal loans.
Matt Dietrich, spokesman for the Illinois state electoral committee, noted that several state lawmakers took out campaign loans during the state budget impasse with former Governor Bruce Rauner when the state auditor’s office prevented them from receiving their paychecks .
Cullerton announced last month that he would retire in January, ending a four-decade career in the legislature. Cullerton, 71, became President of the Senate in 2009.
DeLeo, who retired from the state Senate in 2010, has had a close relationship with Cullerton for many years. He and Cullerton are among the investors in Tavern on Rush. DeLeo is a partner of Cullerton’s wife in a title company.
In addition to DeLeo, Belmont Bank’s chairman, James Banks, a zoning attorney who is the nephew of former Ald, is part of Belmont Bank’s clout. William JP Banks.
DeLeo could not be reached for comment.
Cullerton declined to disclose the exact terms of his credit line with Belmont Bank, but said it was “at market terms and rates”. He said he made monthly payments “when I owe something”.
When asked why he took the campaign fund loan instead of borrowing against his property or other personal assets, Cullerton replied, “convenience.”
Cullerton took the loan about four months before his daughter Maggie’s wedding in February 2015 at the Bridgeport Art Center’s Skyline Loft.
Maggie Cullerton served as assistant finance director for the Illinois Senate Democratic Victory Fund, another campaign fund controlled by her father, from 2017 through earlier this year. She was then hired by the Emanuel Administration as Deputy Commissioner for Cultural Affairs and Special Events.
Maggie Cullerton’s husband, Brian Hooper, a former professional poker player, started a new job with the Illinois Treasurer a month before they married after listing John Cullerton as a reference in his application. Hooper resigned from civil service in 2017.
In 2016, John Cullerton and his wife helped their daughter buy a house in Albany Park and took out a one-year loan from Belmont Bank, which they replaced with a mortgage from another bank the following year.
In the two months before Cullerton said he closed Belmont Bank’s revolving credit line in April, the Senator sold two residential properties in which he was involved, records show.