CHICAGO -- Controversial limousine rides provided to Illinois Housing Development Authority officials in New York were neither connected to investment banking firms nor illegal, according to an authority internal investigation report released Friday.
Instead, the report concluded that the authority inappropriately used a Chicago printing finn to pay the limousine bills and then reimbursed the firm.
Anton Valukas, a former U.S. attorney whom the authority retained to conduct the investigation, concluded that "there were no violations" of any state or federal criminal statute relating to the authority's former practice of paying for limousine fees indirectly through the Merrill Corp., a Chicago-based printer that publishes the authority's official statements. The limousine fees were included in bills the authority received from Merrill but were not identified, Valukas said.
However, Valukas said, the payment of the authority's limousine fees through Merrill were "inappropriate and unacceptable because they involved an element of withholding information from the press and the public ."
In May, a special committee of the authority's board of directors was formed to review an allegation that improprieties may have occurred relating to limousine use by authority officials during trips to New York City between May and August last .year.
Shortly after the committee was formed, James Montana, chief legal counsel to Gov. Jim Edgar of Illinois, said that the authority and state police were looking into allegations that "vendors" that do business with the authority may have paid for transportation in New York.
At that time, Montana would not comment on who the vendors might be. However, he said, the vendors could include bond underwriters. Valukas said that no investment banking firms were involved in the authority's limousine billing practices.
Montana said yesterday that an independent investigation of the authority's limousine bills by the state police also concluded that no criminal violations were found. Montana added that investigation also only involved the Merrill Corp.
However, as a result of the authority's internal investigation, the authority suspended Robert Kugel, the authority's chief financial officer, for one month without pay beginning on Sept. 1. In addition, the authority's board approved recommendations designed to prevent future inappropriate billing practices.
Pamela Lenane, acting director for the authority, said that the report, coupled with the implementation of the committee's recommendations, concludes the matter for the authority.
But Lenane noted that some reforms to avert future billing problems began prior to the onset of the investigation.
