Obscure government official’s side gig a cause for concern

Andrew Hamilton is clearly a man of many hats. But some of those hats should raise eyebrows.

You’ve probably never heard of Andrew Hamilton. But if you’re an Illinois business looking for an edge, he might be your man.

Hamilton is an Illinois government official who for more than a decade has also been running a closely related side business. His story speaks to a number of problems in Illinois, including the state’s glut of governments, poor transparency, punishing business climate, and the appearance of pay-to-play politics. Thankfully, it appears Gov. Bruce Rauner is taking action to remedy the problem.

Here’s the scoop.

Illinois is officially home to 10 regional development authorities, or RDAs, the power of which rests primarily in their bonding authority. RDAs can secure longer-term financing at a lower interest rate on behalf of private businesses, and can help establish enterprise zones, which come with their own subsidies and tax perks. The authorities are spread out all over the state in areas that have been identified as needing extra special economic development assistance tailored to their region.

Hamilton is listed as the executive director of eight of the 10 RDAs in Illinois.

Authorities all over the state – from the Upper Illinois River Valley Development Authority (where he’s served since 1994, according to Hamilton’s bio) to the Will Kankakee Regional Development Authority (1996) to the Southeastern Illinois Economic Development Authority (2005) – are under his watch. Hamilton’s authorities have facilitated hundreds of millions of dollars in financing to businesses over the years, as well as enterprise zone benefits.

Hamilton is clearly a man of many hats. But some of those hats should raise eyebrows.

While serving in a leadership role for authorities that specialize in granting government-backed development deals to businesses, Hamilton is a key player in at least two private entities that sell their ability to secure government-backed development deals for businesses. Sounds like good work if you can get it.

The first one of those private businesses is called Opportunity Alliance, which Hamilton helped found. He lists all of his RDA positions in detail on the company’s website, which boasts its ability to secure state enterprise zones and tax abatements, as well as “government access services.” Clients include Phillips 66, Walgreen Company, Monsanto and Motorola Mobility.

Hamilton also has a company called Financial Solutions, “a private firm that assists business and government in obtaining governmental financing which includes tax free bonds, loans and loan guarantees.” He started that business in 1993, one year before becoming executive director of the Upper Illinois River Valley Development Authority.

There is no crystal clear evidence of wrongdoing here. But part of that is because these authorities provide too little information to the public. In an email, Hamilton said an RDA over which he has authority has never approved a deal benefitting a client.

The real problem is perception. More specifically, the perception that Hamilton is collecting money from businesses via his private firm in exchange for loans and financing from the government that he himself gets to administer.

And that’s the reason Illinoisans have less trust in their state government than residents of any other state. This type of behavior breeds cynicism and apathy in the voting public, not to mention the businesses that just want a level playing field, rather than get involved in legalized corruption.

Illinois has long dwelled at the bottom of business friendliness metrics. But the state really has two distinct business climates, one for the connected and one for the uninitiated. It pays to be operating in the former climate. And businesses like Hamilton’s might be able to open those doors.

His perks might not last very long, however, if reform efforts from the Rauner administration find favor in the General Assembly. In early May, the governor’s office sent a letter to the Illinois Department of Commerce and Economic Opportunity requesting that the agency stop approving any enterprise zone applications brought by RDAs until state lawmakers are able to pass a number of reform measures.

Among them?

“[T]hat no person with any form of financial interest or business relationship, formal or informal, in any economic development consulting, lobbying, or advising business may serve as an RDA executive.”

“[T]hat no person serve as the Executive Director of any more than a single RDA.”

…and,

“[T]hat the executive director of each RDA have his/her primary residence in one of the counties covered by the RDA.”

Welcome changes all.