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  • The Auditor General's Role in the Impeachment of Rod Blagojevich


    11/2/2010

    by Cathy Lockman

    What were the circumstances that led to the impeachment of Rod Blagojevich? Most Illinoisans would likely say it was the allegation that he tried to sell the U.S. Senate seat of Barack Obama after he was elected president. And though that scandal certainly got everyone's attention, it actually was a continuation of a pattern of abuse of power that began long before November 2008, says Illinois Auditor General William Holland.

    The state's chief auditor shared his experience with the Blagojevich administration and the impeachment process at the Department of Accountancy's final Lyceum of the fall semester. It's an experience that he says proves that the routine tasks of auditors and their commitment to professional standards can take on immense importance.

    As auditor general for 18 years, Holland had witnessed the downfall of the previous governor, George Ryan, and, he says, the citizens of Illinois were looking for a change, which Blagojevich promised to deliver. That change came quickly. A few months after Blagojevich took office in 2003, state agencies were reorganized and new directors for those agencies were hired.  Many of the new employees hadn’t worked in government before. 

    "I had already been auditor general for 11 years," says Holland. "New people had come in before, but previous transitions had been orderly and had occurred without much notice. However, the transition from George Ryan to Rod Blagojevich was much different."

    Part of the reason for the less-than-orderly transition was situational, and part was attitudinal. An early retirement initiative created a situation where the most experienced personnel were gone. "This led to a brain drain, which left the administration behind the curve" in knowledge about routine matters, says Holland. "This was problematic, but it didn't have to be crippling. It was understood that historical knowledge would be lost, but it could have been overcome if the new people had a working knowledge of state government and public finance." But instead of knowledge, they had attitude, says Holland.

    "These people did not appear to be interested in understanding the fundamentals of state government. It was more of an attitude of: 'We won; we’ll do it our way now.' This isn’t necessarily objectionable; winners have the right to put their imprint on the government. In fact, we expected dramatic changes, but where I do object is when the underlying principles of government are ignored and replaced with entitlement. They did what they wanted, however they wanted, which ultimately became the undoing of the Blagojevich administration."

    For Holland's office, the attitudinal change was felt almost immediately, with the issuance of Executive Order #10, which gave Central Management Services (CMS) authority over the Office of the Auditor General. Since the office is a constitutional one that is not responsible to the governor, Holland at first thought it was a naive move on the administration's part and that when it was pointed out to them that the Illinois Constitution wouldn't allow for such a takeover they would back off.  Although they did eventually retract the Office of the Auditor General from Executive Order #10, it didn't happen  without a strong fight from Holland, who now wonders if the order was more of a conscious effort to reach a far more nefarious outcome.

    "Knowing what I know now," he says, "I think this was an early attempt to control all aspects of government. By controlling my office, they could impose their terms for transparency and control. I believe that what they portrayed as an innocent mistake was a real volley against my office."

    That volley began a contentious period between the administration and the Office of the Auditor General. An audit of CMS, the report of which was issued in the spring of 2005, raised serious doubts about the integrity of the agency in its procurement processes. According to Holland, the findings were troubling and so was the administration's reaction to this audit.

    "There was no suggestion that they made mistakes," he says. "Instead they launched a full-out attack on my office. They elicited straw men to obtain information about how the office operated. It was clear to me that they wanted to remove my office, and  I needed to respond. For the first time in my tenure, I held a press conference. CMS people were present and attempted to repudiate my findings. Although they backed off publicly, privately they were intimidating my office."

    Subsequent audits disclosed the violation of state and federal laws, and the response from the administration was what Holland calls "the height of arrogance."  When the administration was told they had violated federal law, their response was to become more aggressive, he says. "A pattern had begun to emerge that would play a significant role in [Blagojevich's] impeachment two years later."

    On December 9, 2008, Blagojevich was arrested, and an investigation by the Illinois legislature followed. But the legislators faced a dilemma. The governor hadn't yet been indicted. "Our audit findings took on enormous importance at that time" explains Holland, "because they showed the administration's indifference to the law and a pattern of that indifference."

    Holland's testimony proved crucial to the impeachment investigation. He testified to a long list of management irregularities, such as giving a lucrative contact to a company that didn't officially exist and an agreement  to pay millions of dollars for doses of a European flu vaccine that never arrived because they were banned by the Food and Drug Administration.

    "The substance of my testimony wasn't as sexy as [the allegation of selling the Senate seat], but it was relevant to the question of whether there was a pattern of abuse by the administration. I knew what I said and how I said it would have enormous impact. I could not waver or equivocate."

    Holland explained not only the findings of the audits and the irregularities uncovered, but he told of the administration's tactics to circumvent the audit process. "They made it very difficult for us to finish our audits," he says. "The administration had made it clear to the agencies that cooperation with our office was not important. There was a daunting lack of cooperation, and yet despite all the obstacles we still delivered fair and accurate audits."

    In the end, his testimony was pivotal in the impeachment process because it showed the link between the conduct of the governor and a pattern of disregard for the laws of the state. It proves, says Holland, "that what we find mundane can really be compelling. This is why auditors have professional standards and why we must follow them in each and every audit."

    Providing such testimony was a daunting task, but Holland credits the tenacity and professionalism of his staff with aiding him. "I have absolute faith in the accuracy of my staff’s work," he says. "I was the last person to testify against the governor, but the reports from my office were the first to show his abuse of power."

    It's a lesson that "every link in the chain is important," he says, and he challenges students to be committed to "following professional standards in even the most routine tasks because these tasks can take on immense importance."

    UIUC College of Business Department of Accountancy