As home foreclosures tear apart neighborhoods throughout the state, an annual battle plays out in Springfield between the banking industry and community activists over how to deal with the damage.
The banks always emerge largely unscathed. It happened again last week as the spring legislative session drew to a close — ending efforts to make banks pay millions of dollars for upkeep on abandoned properties and for homeowner counseling.
Michael Madigan says lawmakers are repeatedly outmaneuvered by the powerful banking lobby. But he doesn't mention that some of those same banks — from national chains to community lenders — are clients of his private law firm.
In Madigan's dual roles as the state's most powerful lawmaker and name partner in one of Chicago's most successful property tax firms, he frequently makes public decisions that affect the bottom line of his private clients.
It's a confluence of interests that many involved in the banking fight — including housing advocates and Democratic lawmakers — said they didn't know about.
"It undermines the process. I don't think he should be involved," said Ernie Lukasik, a coordinator with the Northwest Side Housing Center, a nonprofit group that helps homeowners mediate foreclosure cases.
"It's a clear conflict," Lukasik said. "Here he is making laws for the banks while he is working for them."
Madigan refused to be interviewed, but said through a spokesman he has no conflict of interest because legislation he's involved with affects entire industries, such as banking, and not just his clients.
Though many consider Madigan all-powerful after nearly three decades as speaker, spokesman Steve Brown said Madigan's efforts to make predatory lenders and their allies "accountable for the damage they've done" have been stymied by the influential banking lobby.
"We've not been successful, and in some cases, the predators have stopped what Mike Madigan and others have tried to do," Brown said in comments shortly before the session ended. "In some cases, they've watered things down. But the fight continues."
Madigan has previously said he abides by a "personal code of conduct" that includes not offering state benefits to gain clients and recusing himself from considering a bill if a client "expresses an interest in legislation such as to create a conflict of interest."
Ethics experts said neither Madigan's personal code nor Illinois' weak ethics law addresses the potential conflict created by the intersection of the speaker's personal and private interests.
"Someone with a special interest could pour favors on the speaker without explicitly saying, 'By the way, this is for your support'. You shouldn't have to show it's a bribe for it to be prohibited by a code of conduct," said Richard W. Miller, director of the Program of Ethics and Public Life at Cornell University.
"There is also nothing in the speaker's code of conduct that stands in the way of his involvement in a matter where he has powerful personal interests so long as the company that benefits doesn't request it," Miller said.
The Tribune has previously reported that clients of the speaker's tax law firm have benefited from state projects he helped secure; on Sunday, the newspaper disclosed that Madigan's actions on the state's Medicaid program for the poor also affected law clients who put money in his pocket.
Pressed for comment, Madigan issued a statement calling the Tribune's reports "garbage."
Madigan controls the House so tightly he has been nicknamed "The Velvet Hammer" for his ability to bend lawmakers to his will. The speaker's decisions and political brokering are almost always made in secret, as is most of the political maneuvering in Springfield.
State lawmakers wrote themselves out of the transparency laws that govern the rest of state government, and Madigan has refused Tribune requests for any documents related to his actions.
Madigan typically plays his position so close to the vest in Springfield that few know his motives until bills are on their way through the House. Amid that mystique, Madigan played a central role in the outcome of several bills that dealt with foreclosure issues and the banking industry this session.
Michael Madigan tax clients unscathed in foreclosure debate
State's most powerful lawmaker often makes decisions that affect banks represented by his private law firm
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