February 8, 2018; ProPublica
In July, Jim Nowlan, a former Illinois legislator, state agency director, and retired senior fellow at the University of Illinois Institute of Government and Public Affairs, wrote an article entitled, “Time to call out powerful Illinois Policy Institute.” A collaboration between the Chicago Sun-Times and ProPublica has answered his plea; it seems the institute’s CEO, John Tillman, has been running IPI like a personal influence generator, affecting both Illinois politics and the nonprofit sector.
The Illinois Policy Institute is “an independent organization generating public policy solutions aimed at promoting personal freedom and prosperity in Illinois” by generating “marketable policy solutions to unleash Illinois’ talent and entrepreneurial spirit,” according to its website. In plain terms, it is a conservative think tank aimed at limiting taxation and shrinking the size of central governments.
But writing policy papers isn’t all they do. In 2016, they granted over $1 million to other organizations, not always in a transparent way. They regularly lobby the government, where Tillman’s close friend Bruce Rauner sits in the governor’s seat. And according to ProPublica and the Chicago Sun-Times, “Through an often-dizzying series of transactions, Tillman and his associates have moved millions of dollars around five interconnected nonprofits they run, steering money to for-profit ventures in which they have a stake.”
Tillman is a founder, CEO, majority owner, or other leadership figure in nine different for- and non-profit organizations. In 2016, IPI gave $194,000 to the Liberty Justice Center, of which he is the founder and director, and $295,332 to Think Freely Media, of which he is founder and chairman. Smaller amounts were given to both organizations in 2015. Not only that, but according to ProPublica,
In 2015, Think Freely Media made a $49,400, no-interest loan to a for-profit data and marketing company called Crowdskout. That came a few months after the nonprofit loaned Crowdskout $60,000 plus interest. At the time, Tillman had “majority unit control” of the entity that owned Crowdskout, according to a financial audit of Think Freely Media.
“Whatever the interest should be on that loan would effectively be a gift to a for-profit organization, which you just can’t do,” said Philip Hackney, a law professor at Louisiana State University who served in the office of the general counsel for the Internal Revenue Service overseeing nonprofits.
Tillman denies any wrongdoing, saying, in written response to ProPublica reporter Mick Drumke,
Obviously, these are all fully disclosed transactions, all at fair market value as they should be. And yes, people and companies are paid for providing services. When I have had a role with an organization, that relationship must be properly disclosed to the board and I recused myself regarding any decisions made.
But Tillman isn’t the only problem. Pat Hughes, whose company AKJ Consulting of Hinsdale got a $102,00 contract, holds positions with three of Tillman’s organizations, including IPI. Dan Proft, who was paid $64,000 as a consultant to Think Freely Media, is another founder of Illinois Opportunity Project, another of Tillman’s nonprofits and one that received significant grants from IPI.
The tangled web extends to IPI’s funders as well. One of its major funders is the Mercer Family Foundation. NPQ has covered the Mercer family and its own struggles with conflicts of interest; they also fund the Heritage Foundation. Another supporter of IPI is the Rauner Family Foundation. NPQ readers may remember Governor Rauner from the two-year war he waged with Illinois’s Democratic legislature over the state budget, especially over school and pension funding.
Chicago Magazine reports that some refer to Tillman as the “de facto governor” because Rauner turns to him so frequently for advice. In fact, Rauner fired many of the staff who’d worked on his campaigns and replaced them with staff recruited from IPI, and his original tax plan bore strong similarities to a plan put forth by IPI. As Illinois government branches were fighting over the budget and nonprofits and government offices were starved for cash, Tillman recommended that Republicans “only partner and offer bipartisanship when the Democrats join on policy solutions from the platform.” Tillman claims that whoever refers to him as the de facto governor “is being silly.”
Tillman, whose organizations claim to advocate for “an honest, efficient and transparent government,” has built a web of influence and organizations that boxes out community-based solutions, competitive contract bids, and other mechanisms of such a government. Ironically, in January, Dumke found that a supposedly independent anticorruption group called Project Six was almost entirely funded by IPI and had been attacking only Democratic politicians. Project Six had been hiding its donors’ identities, citing “the state’s long history of entrenched corruption and the potential for retaliation,” until 2016 tax records were filed.
Illinois does have a rather impressive history of crooked politicians; no less than seven of its governors have gone to prison on corruption charges, most recently Rod Blagojevich, who was impeached in 2009 for trying to sell Barack Obama’s senate seat, among other things. But organizations like IPI demonstrate how difficult the problem is to untangle. By spreading his influence among more than half a dozen organizations, Tillman avoided scrutiny of his relationships and his large salary while practicing the secret conflicts of interest he rails against.
While webs like the one IPI has woven remain in place, community organizations may find it more difficult to be heard over the big money being pushed around by people like the Mercers, the Rauners, and Tillman. Meanwhile, the conflict of interest hurts not only those who might believe in IPI’s mission and policy ideas, but all nonprofits who rely on the public’s trust to advocate and make decisions in their names.—Erin Rubin