Crain's: Audit: Illinois prepaid tuition fund invests in luxury car startup:
Despite losing all of a nearly $13 million investment in now-defunct ShoreBank in 2010, the former administrators of the College Illinois prepaid tuition plan just a few months later decided to plow $14 million into a startup luxury hybrid automaker that recently suffered a blistering review from Consumer Reports.
The revelation came in a special state audit, released today, of the Illinois Student Assistance Commission's management of the $1.1 billion fund backing the college savings of more than 30,000 Illinois families.
The in-depth review by Illinois Auditor General William Holland came at the request of the Illinois House of Representatives after a Crain's Chicago Business investigation in 2011 revealed a big funding shortfall in the college savings plan; misleading marketing practices that led contract holders to believe incorrectly that the state guaranteed their savings; and an aggressive, unorthodox series of investments to keep up with runaway tuition inflation at the state's universities and colleges.Oh yeah, remember Shorebank. And of course the hybrid's gonna be a real greenie gold mine, a sure bet of someone else's college money:
Fisker garnered unwanted headlines in March after Consumer Reports published a story reporting that its driver couldn't start the magazine's new $107,850 Fisker Karma as he was beginning a product test. “We buy about 80 cars a year and this is the first time in memory that we have had a car that is undriveable before it has finished our check-in process,” the magazine reported.Remember, this was one of those DOE billions wasted. And of course, these greenie guys are just in it for their desire to save the planet for the common good. Private gain, socialized risk:
Investment management fees paid by College Illinois mushroomed to $11.2 million in fiscal 2011 from $2.5 million in fiscal 2006 because of the much higher fees demanded by managers of “alternative” investments like private equity and hedge funds.Probably to defray the cost of their big campaign donations.
The Chicago Tribune highlights the monster arrogance of these fatboy gov technocrats (see earlier post):
Davis on Wednesday said allegations of conflicts of interest are false, and that he had disclosed personal relationships.Oh, so let's blame the clearly toothless regs:
Davis was appointed head of ISAC by former Gov. Rod Blagojevich in 2006, not long after his Chicago investment firm collapsed. He defended his tenure, and as he has in the past said he was correct to invest in alternative, arguably riskier funds.
"The state of Illinois has enough rules that if someone goes looking, they will find something wrong," Davis said. "On substantive issues, you will find the investments were not only sound, but in some cases brilliant."
"I happened to know someone," Davis said. "Chicago is a small town. Anyone playing heads-up ball is going to know people. That is not a conflict. It is a witch hunt.The former Mayor Daley, who we just found out knew some guys in the legislature to fix up his pension by looting the taxpayers for hundreds of thousands.
"It is silly," Davis said. "It is what Mayor (Richard) Daley would have called 'silly.'"
...Let's not actually look at the facts. And those are that this guy is clearly brilliant. I guess it's the Obama bundler MF Global Model. Or maybe the state of Illinois model.
But we know it's a lousy can of worms.
Remember in November.