Rauner’s biggest strength proving to be his greatest weakness

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His track record as a businessman should be the strong point of Bruce Rauner’s sales pitch for the governor’s office. Instead, it’s become possibly the greatest liability for the wealthy Republican nominee.

“Nobody in my firm was ever accused of wrongdoing,” Rauner told reporters recently, as he was again forced to defend the business ethics of the GTCR private-equity firm he started in Chicago.

While Rauner and others at GTCR have never been charged, executives of companies they backed financially have ended up in legal trouble. It seems every day brings another story placing Rauner and GTCR’s reputation in deeper doubt.

Another hit to the Rauner campaign comes from Detroit, where a high-ranking executive for a GTCR-controlled company was at the center of a massive City Hall corruption scandal.

You probably heard about the case that brought down Detroit’s young Democratic Mayor Kwame Kilpatrick, sentenced last year to 28 years in federal prison.

Getting a far shorter term after cooperating with the feds was an executive for Synagro Technologies Inc., a company based in Houston. The executive, James Rosendall, pleaded guilty to bribery in 2009 and testified in Kilpatrick’s trial last year, describing his role in what he called “the pay-to-play thing going on in the city of Detroit.”

Rosendall’s push on Synagro’s behalf intensified in 2007. That was shortly before the company won a billion-dollar sludge contract from Detroit officials — and not long after GTCR had divested its majority stake in Synagro.

But court records show Rosendall’s efforts to sway Kilpatrick and other Detroit leaders dated back several years, to the middle of the period when GTCR controlled Synagro.

GTCR first invested in Synagro in 2000, eventually holding a majority stake in the company. Rauner and his partners did not cash out completely until 2006.

Rosendall was Synagro’s vice president of business development and president of its Michigan subsidiary, according to court records.

In September 2003, that job involved chartering “a private jet, costing about $18,000 to $20,000” to take Kilpatrick and others from Detroit to Las Vegas to attend a championship boxing fight, Rosendall admitted in his plea agreement. Courtesy of Rosendall and Synagro, there were more chartered jets to Las Vegas and Mackinac Island for Detroit officials the following year.

Then, in early 2004, Rosendall said Kilpatrick wanted him to work with his father, who had no official position.

“Nevertheless, defendant understood that [Kilpatrick] was directing him to work with [his father] so Synagro could obtain business from the city,” according to Rosendall’s plea agreement.

Between that time and 2008, Rosendall paid “at least $25,000” to the mayor’s father, Bernard Kilpatrick, records show.

Prosecutors in Detroit said Synagro’s lawyers were aware of some of Rosendall’s actions and determined “they were not prohibited by the city’s ill-defined ethics laws, but instead fell into what they characterized as a ‘gray area.’ ”

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Rosendall did not return calls this week, and a lawyer for Synagro declined to comment.

Synagro was run by GTCR’s handpicked CEO, and GTCR had representatives on the board of directors at the time the corruption began to fester in Michigan.

Vince Hemmer was a principal at GTCR while he was a Synagro board member, from 2000 to 2006. Hemmer, who declined to comment, has contributed more than $45,000 to Rauner’s campaign for governor.

In a statement, Rauner campaign spokesman Mike Schrimpf said, “Bruce was never on the board at Synagro and, as investors, GTCR would not have been aware of the individual actions of every employee of a nationwide company. What Mr. Rosendall did was clearly wrong, and Bruce believes he was rightfully prosecuted and convicted.”

The reaction echoed Rauner’s own statements after executives of another company tied to him were indicted on federal fraud charges in July.

“You know what? Behavior inside large organizations is not always perfect and nobody can control every element of every behavior,” Rauner said then.

Rauner has said he thinks his responses in these cases were “dramatically different” from Gov. Pat Quinn’s efforts to distance himself from the mushrooming problems in his anti-violence program and at the patronage-riddled Illinois Department of Transportation.

But if he’s elected to head the large organization that is state government, Rauner’s business record suggests he won’t be any more eager than Quinn to accept blame for behavior that might happen in his administration.

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