Crony Capitalism At Work Under Illinois' Health Exchange

A few weeks ago, several local outlets ran a story about, in a wonderfully bi-partisan move, a small start-up business was being recommended for a $150 million dollar federal loan so they could build Illinois’ healthcare exchange under the Affordable Care Act. ( http://www.modernhealthcare.com/article/20121011/INFO/310119991/ill...# )

The company, SimpleHx, was founded by a group of MBA candidates from Northwestern University last year. From looking at there website, www.simplehx.org, it doesn’t appear that they have any clients yet. Their website reads more like a business prospectus for investors rather than information on a fledgling business or non-profit. They refer to their “members”, but they make no mention of the names of their leadership. Somehow, this group has won the support of Governor Pat Quinn (D), Senator Dick Durbin (D), Senator Mark Kirk (R), Representative Jan Schakowsky (D), and Representative Mike Quigley (D). They are being recommended for a $150 million dollar loan from the tax payers to help make healthcare more affordable.

Let’s try to make some sense of this. The so-called Affordable Care Act provides for loans in the ranges of $100 million to $200 million dollars to one company in each state for the purpose of setting up a health insurance co-op. In the case of SimpleHx, they are being recommended as the group to run a state health care exchange without any previous experience. Wouldn’t you like to have a senator recommend you for a $150 million dollar loan based only on your good idea? How about the fact that to save money on healthcare, we are being told that our tax dollars need to be used to create a brand new company?

If you can get past the idea that a $150 million dollar loan will save us all money, then you might still be curious as to how this infant company was able to pull off such big name endorsements. I sure was.

It took a little effort, but I found another story on SimpleHx that finally gave me the names of some of these partners. ( http://dailynorthwestern.com/2012/10/24/campus/kellogg-students-see... ) The main players are Dr. Elmer Abbo, Coe Schlicher, and Elliot Richardson. The following link shows that Dr. Abbo has made donations to the campaigns of Jan Schakowsky and four to President Obama. http://www.corporationwiki.com/Illinois/Chicago/elmer-abbo/88126441...

I could not find direct contributions from Coe Schlicher, but his father-in-law has been a donor to the Democratic Party for years. http://www.corporationwiki.com/New-York/New-York/richard-roedel/629...

Elliot Richardson is the person who makes the political contacts for SimpleHx. He ran for congress in the 10th Congressional district…

… Mark Kirk’s former office… http://www.nbcchicago.com/news/politics/Elliot-Richardson-for-10th-...

I cannot say for a fact that any impropriety has taken place, but I can say that the signs are there to warrant further scrutiny. I just wish that the professional journalists would do their jobs and get to the bottom of this and other issues rather than being cheerleaders for corruption.

Views: 33

Comment by Jerseygal on October 31, 2012 at 5:47am

Wow, Ron!  Good post, and some fantastic watch-dogging.  I think you are ahead of the curve in posting on this sort of thing.   IL is Obama's state (one of the 57, right?), and corruption and thuggery and cronyism seem to be the order of the day there.   It walks like a duck, sounds like a duck, and I pray Obama will be a lame duck shortly!

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