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Illinois Freedom PAC: Rauner, GTCR made billions, as seniors paid ultimate price

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Illinois Freedom PAC, a non-partisan coalition established to educate middle class voters about the issues at stake in the 2014 Illinois Gubernatorial election, today released its second television ad. The first ad called out gubernatorial candidate Bruce Rauner for his yet unexplained relationship with Stuart Levine, the man who called by federal prosecutors, the "ultimate Springfield insider and political fixer.

Levine is now a federal felon, serving the remainder of 5 1/2 years for money laundering and fraud.

The latest ad released by the Illinois Freedom PAC holds Rauner accountable for the actions of a company he controlled, GTCR. Those actions says Illinois Freedom PAC spokesperson Michael Murray, are a "callous disregard for human life" and "severe corporate greed."

NBC 5 News says that the new ads shift the focus to a "potentially fertile ground:" Rauner's his role as the head of a venture capital firm that engaged in potentially predatory business practices.

In one case, for example, a jury found that Trans Healthcare Inc. (THI), a company co-founded by Rauner's firm—called a "vulture investor" that bought up scores of nursing homes--cashed in on the elderly by cutting staff at the homes, letting quality of care decline, loading the homes with debt and shuffling money between corporations to escape liability from lawsuits over extreme neglect and death.

Rauner and GTCR co-founded a company, Trans Healthcare Inc. (THI) in 1998 with Anthony Misitano, THI's CEO to take advantage of the change in the Medicare reimbursement. The purpose of THI was, as Ned Jannotta Jr., a GTCR principal, said at the time, "We thought it would create a lot of distress, and there would be a decline in multiples for assets and a decline in buyers for those assets."

The investments turned out well for Rauner and GTCR, but not so well for Ms. Arlene Townsend who died from neglect and abuse in one of the Rauner-controlled nursing homes, as reported by the Jere Beasley Report. The Townsend family was awarded a $1.1 billion dollar settlement, with $100 million in compensatory damages and $1 billion in punitive damages.

In this same lawsuit, plaintiff's showed evidence that Ms. Arlene Townsend was the victim of a "scheme" by an enterprise, which included Rauner's GTCR.

The Plaintiff’s lawyers presented evidence showing how Ms. Townsend was the victim of a scheme by an enterprise that included: New York real estate investors; financiers General Electric Capital Corporation (GECC) (a private bank) and Ventas, Inc. (a real estate investment firm); and multi-billion dollar Chicago private equity fund GTCR Golder Rauner, LLC. According to trial testimony, this group conspired to run a nursing home chain into insolvency without regard to the harm the nursing home residents would experience. Ms. Townsend was said to have been one of the victims of the Auburndale facility THI managed and operated.

Murray once again added, "Bruce Rauner isn’t who he says he is."

"Bruce Rauner brags that his business experience qualifies him to be governor, but what he leaves out is that his companies, such as Trans Health, prioritize corporate profits over human life," says Murray. "As a venture capitalist, Bruce Rauner owned a company that deliberately neglected the elderly to make a quick buck, and now he wants middle class families to believe he will look out for their interests as governor? Stuart Levine showed us that Bruce Rauner has a history of putting profits ahead of his ethics, but now we know that his company’s profits are even more sacred than human life."

This ad is supported by an initial weeklong buy worth more than $1 million in the Chicago, Champaign, Peoria, and Rockford media markets as well as online.

As the Chicago Elections Examiner reported earlier, organized labor is financing this ad campaign with support from the Illinois Freedom PAC, to the tune nearly $2 million dollars in contributions: $500k from American Federation of State, County and Municipal Employees Council 31 PAC (AFSCME) 500k from Illinois Education Association (IEA), $250k from Illinois Federation of Teachers COPE (IFT), $500k from SEIU Illinois Council PAC Fund, Illinois PAC For Education (IPACE), and $500k from Illinois PAC For Education (IPACE).

Yesterday, American Federation of Teachers Committee on Political Education was reported to have donated an additional $250k.

Some of the other judgments against Rauner and GTCR, as reported by the Illinois Freedom PAC.

  • 2012: Jury awards a $200 million dollar judgment to the family of a 92-year-old woman who fell down a flight of stairs in her wheelchair and died at a home managed by Trans Healthcare—The woman was not found for an hour and died shortly after paramedics arrived.
  • 2010: Jury awards a $114 million dollar verdict to the family of a woman who died after staying at a nursing home managed by Trans Health Care; the woman "Was hurt after falling down and received other injuries from pressure sores, overmedication, malnourishment, and dehydration."
  • 2010: A Widow Was Awarded A $900 Million Verdict Against Trans Health Care After Her Husband “Suffered Pressure Sores And Infections That Required Surgeries, Including An Above-The-Knee Amputation Of His Right Leg.”

An expert forensic accountant testified during the trial that GTCR Boards of Directors were composed solely of investors and bankers, and did not include a single health care official. From 1999 to 2003, GTCR and THI began acquiring nursing homes with funding from GECC, Ventas and other lenders. THI became one of the nation’s largest health care operators with more than 220 facilities and more than a billion in revenues at that time.

With the number of lawsuits piling up and to protect itself from financial loss, GTCR/THI agreed to sell THMI for a mere $100,000 to Fundamental Long Term Care, Inc. (FLTCI), a shell company that had no employees.

One of the more disturbing findings in the testimony by a forensic accountant, is that THI’s former company leaders engaged in illegal political contributions and then got reimbursed with tax dollars by charging the contributions to the government through Medicare reports.

In effect, THI used Medicare dollars for campaign contributions.

Attempts to reach the Rauner campaign for comment went unanswered.

Other related pieces about Bruce Rauner by John Presta:

Bruce Rauner charter schools

Bruce Rauner campaign 'minimum wage' snafus

Bruce Rauner says lower Illinois minimum wage

Bruce Rauner raises $4 million

Bruce Rauner is the Mitt Romney of Illinois politics (Part 1)

Bruce Rauner is the Mitt Romney of Illinois politics (Part 2)

Bruce Rauner is the Mitt Romney of Illinois politics (Part 3)

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Sources:

Illinois Freedom PAC

Rich Miller's Capitol Fax - This one's gonna sting

Republican News Watch - Rauner’s GTCR linked to nursing home deaths and abuse

Allvoices.com - Bruce Rauner, GTCR linked to nursing home deaths and abuse, say multiple lawsuits

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Send John Presta an email and your story ideas or suggestions, johnpresta@att.net.

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