As a convicted felon, William F. Cellini – the longtime Republican power broker recently convicted of corruption tied to former Gov. Rod Blagojevich’s “pay-to-play” schemes – can no longer do business with the state of Illinois, as he has done for more than four decades.
But the Illinois law under which Cellini faces a five-year ban on getting any state contracts doesn’t apply to his vast network of business ventures, some of which have been turned over to his daughter and son, according to state officials.
Cellini companies – New Frontier Management and an affiliate, Pacific Management Corp., which is owned in part by his daughter and son-in-law – have agreements with private landlords to manage 18 buildings now occupied by state agencies that include the Illinois Environmental Protection Agency, the Department of Human Services and the Department of Transportation, state officials say.
Cellini companies built or rehabbed many of those buildings, which the state began leasing during the administration of former Gov. James R. Thompson, one of the several Republican governors Cellini helped get elected over the past four decades.
This past year alone, Illinois taxpayers paid more than $14.4 million in rent for 18 buildings that have been managed by companies linked for decades to Cellini or his family, records show.
Those companies also manage four other office buildings – including IDOT’s Schaumburg offices and the Illinois Student Assistance Commission building in Deerfield – that state taxpayers are buying under installment deals that cost Illinois taxpayers $9.4 million this year.
And Pacific Management – the company whose owners include Cellini’s daughter and her husband – operates 13 affordable housing projects for the Illinois Development Housing Authority, a state agency that’s given Cellini more than $90 million in low-interest loans over the past three decades to build apartments in Chicago, the suburbs and Downstate.
The Cellini businesses get a percentage of the rent that the state pays the owners of the buildings. Just how much is something that’s between the landlords and the Cellini companies, according to state officials, who say that, as a result, they don’t know how much New Frontier or Pacific Management ended up getting paid on deals that indirectly involve state government.
“We do not have copies of the management agreement between the [landlords] and New Frontier, and the management fee paid to New Frontier would be included in the rent paid to each lessor and is not broken down separately,” says Sunny Clark of the Illinois Department of Central Management Services, the agency that oversees state leases.
To get an idea of the potential value, consider just one of those buildings – the Illinois Student Assistance Commission’s Deerfield headquarters that was built by the Alter Group. The state owns that office complex, located just off the Tri-State Tollway, and is in year No. 19 of a 21-year contract with Pacific to handle utilities, janitorial services, security and the like for the building. On that one building alone, the state paid Pacific Management a total of $814,265 this year, according to records from the office of Illinois Comptroller Judy Baar Topinka.
Cellini, 77, of Springfield, is the president of New Frontier Management, which state officials say managed 18 buildings leased by the state.
But Cellini’s New Frontier Management no longer manages those properties, which are now overseen instead by Pacific Management, according to Kathleen M. Vyborny, an attorney for both companies.
Cellini has no ownership stake in Pacific Management. His daughter, Claudia Cellini, is listed in state records as Pacific Management’s senior vice president. Pacific Management’s corporate secretary, Vincent Forgione, and its treasurer, Susan Weber, report to Cellini at some of his companies, including New Frontier Management Corp.
Pacific and New Frontier share offices in downtown Chicago on the top floor of 20 S. Clark St., the nerve center of Cellini’s business empire, as well as in Springfield, where both companies operate from a senior housing complex that Cellini built with low-interest state loans.
“New Frontier Management Corporation is not engaged in the property-management business,” Vyborny says. “It ceased providing property-management services several years ago. Any statement, suggestion or implication to the contrary is false.”
Vyborny says that Cellini “has no direct or indirect ownership interest” in Pacific Management, nor is he an officer or director of the business.
Patrick Somers – who is president and chief executive officer of Pacific Management and a longtime Cellini business associate – describes New Frontier and Pacific Management as “legally separate companies, and there is no overlap of ownership.”
Somers disputes state records that show New Frontier continues to manage the buildings leased by the state, saying that “is incorrect” and that those records “must be considerably outdated.”
Asked to explain whether the buildings are managed by Cellini’s New Frontier Management or his daughter’s Pacific Management, Clark, the spokeswoman for the Illinois Department of Central Management Services, says, “It is our understanding that New Frontier and Pacific Management are related entities.”
The Chicago Sun-Times contacted several landlords of buildings housing state agencies, but none would discuss their management deals with New Frontier or Pacific Management. Those landlords include:
†Marilyn and Nick Cagnoni, who own three Springfield buildings that are leased by the state and managed by Cellini-linked companies. Her late father, Frank Mason, was a Springfield businessman who leased property to the state. Her husband is the son of the late Michael Cagnoni, a trucking executive who was killed in a mob hit when his Mercedes-Benz exploded on the Tri-State Tollway’s Ogden Avenue ramp on June 24, 1981, according to testimony during the “Operation Family Secrets” trial four years ago that ended with the convictions of top Chicago mobsters including Frank Calabrese Sr.
†Government Property Fund II, which owns the Prescott Bloom Building at 201 S. Grand Avenue East in Springfield, a building Cellini built for the state in the late 1980s. It’s now leased by the Illinois Department of Healthcare and Family Services. According to state records, Government Property Fund II is co-owned by Rumsey GPF I LLC. That business, in turn, is listed as being owned by Rumsey Indian Rancheria of the Wintun Indians, a tribe which operates a northern California casino.
Cellini – who was convicted in November of two of four corruption charges he faced – is awaiting sentencing for his role in an extortion conspiracy involving an attempted shakedown of Thomas Rosenberg, a Hollywood movie producer and investment-firm mogul, for $1.5 million in Blagojevich campaign contributions.
