Treasurer targets GOP insider
Report questions expenses, hidden profits in hotel deal
By Jeffrey Meitrodt | Tribune reporter
12:43 PM CDT, May 19, 2008

PRINGFIELD - Republican power broker William Cellini and his business partners improperly diverted nearly $2 million from the hotel they built in the capital with a hefty state loan and used the money for expenses ranging from Christmas presents to preparing their personal income taxes, state Treasurer Alexi Giannoulias said Monday.

Cellini's attorney vigorously disputed the irregularities detailed in a forensic accounting report the state treasurer commissioned after beginning foreclosure proceedings against the hotel last year. The Tribune obtained the report in advance of the news conference.

The report, by Blackman Kallick Bartelstein, does not accuse Cellini or his partners of criminal wrongdoing. Giannoulias asked for a criminal investigation, and late last week he turned over the results of the $50,000 study to the Chicago office of the FBI and the Illinois attorney general's office.

In addition to their questionable expenditures, Cellini and his partners took steps to hide profits and make the hotel look unprofitable, Giannoulias said.

"Evidence in the report suggests that Bill Cellini orchestrated a sophisticated scheme to cook the books and cheat the state," Giannoulias said Saturday in an interview.

Under the terms of the deal, Cellini and his partners did not have to make mortgage payments to the state if the hotel was unprofitable. The owners have made only two payments in the last 10 years, according to Giannoulias.

At a Springfield news conference on Monday, Giannoulias said the recent turnaround of the hotel supports the audit, noting that the hotel earned profits of $1.2 million in 12 months after a court-appointed trustee assumed control, after the hotel reported no profits for years.

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Federal prosecutors have described Cellini as an unindicted co-schemer allegedly involved in a kickback scheme figuring prominently in the public corruption trial of Antoin "Tony" Rezko, a one-time top fundraiser for Gov. Rod Blagojevich.

But before that case, Cellini and his partners received publicity for their two-decade battle with the state over the ill-fated hotel, which was conceived as a luxury property that would help spur downtown development but has fallen into disrepair. The property lost its Marriott franchise and now operates independently as the President Abraham Lincoln Hotel and Conference Center.

Cellini and his partners obtained a $15.5 million state loan with the help of then-Gov. James Thompson, a Republican, who was criticized for using his position to help Cellini. Cellini was state transportation secretary in the 1960s under Republican Gov. Richard Ogilvie and is the longtime treasurer of the Sangamon County GOP.

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