CHICAGO — A legal dispute has cast a shadow over a state program designed to expedite payments to contractors, with accusations that undisclosed financial arrangements involving well-connected political figures potentially breached state contracted terms. Scheduled for a January 31 hearing by Judge Jerry Esrig at the Daley Center, the lawsuit targets the Vendor Assistance Program (VAP), alleging the company failed to reveal that former state legislator James DeLeo and influential lobbyist Nancy Kimme profited from the scheme.
Over a decade ago, Illinois implemented a financial initiative allowing certain businesses to purchase unpaid state bills, aiming to mitigate delayed payments to vendors by enabling them to collect the accrued late fees. The Vendor Assistance Program, run by Brian Hynes—a lawyer with deep political ties, including to the indicted former House Speaker Michael Madigan—came under scrutiny when it was revealed that the company and associated trusts had acquired $5.7 billion in state receivables. The program required full disclosure of all individuals and entities with a financial stake, a condition the lawsuit claims VAP violated.
According to the lawsuit filed by Michael Forde’s law firm, VAP engaged in distributing “profit participation rights” to undisclosed third parties. Among them were DeLeo, a Democrat who left the Senate in 2010, and Kimme, a Republican who previously served as chief of staff to Comptroller Judy Baar Topinka. DeLeo reportedly secured an agreement in 2018 granting him a 1% profit share from related company earnings over the next four years, which resulted in significant undisclosed income. Similarly, in 2020, Kimme entered into an undisclosed financial arrangement with VAP while she was registered to lobby for the company.
The complaint details that by omitting these profit-sharing agreements from state disclosures, VAP essentially misled state authorities about the stakeholders involved, which could constitute false claims to the state. The heart of the issue, as stated in the legal complaint, lies in the state’s ignorance of the true beneficiaries behind its dealings, which included former officials and a lobbyist.
Legal representatives of VAP countered the allegations, asserting that the company has consistently fulfilled all requirements as mandated by Illinois law. The spokesperson emphasized their anticipation of the judicial proceedings to rectify the reputational damages inflicted by the plaintiffs’ charges.
The initial filing of the lawsuit was dismissed, but the persistence of the plaintiffs led to the submission of an amended complaint last month, reiterating concerns about undisclosed financial beneficiaries like DeLeo and Kimme.
This case highlights ongoing concerns over transparency and integrity in state-contracted operations, especially those involving politically connected figures. As the hearing approaches, the outcome will not only decide the fate of the current lawsuit but may also impact future dealings and regulations governing state contracts and financial disclosures. Neither DeLeo nor Kimme have publicly commented on the allegations. As details unfold, the implications for state contract governance and the associated political and legal ramifications continue to loom large.