State senators grill Illinois tollway officials at hearing

State senators grilled Illinois tollway officials Wednesday, focusing on the financial woes of the agency's former oases operator.

Wilton Partners, a politically connected firm that until recently managed the seven oases, is in the midst of a foreclosure case filed by its lender iStar Financial, which says Wilton has defaulted on a $82 million loan for rebuilding the rest stops. Wilton was a major contributor to former Gov. Rod Blagojevich, who faces corruption charges including using the tollway for his political gain.

Democrat Sen. Susan Garrett of Lake Forest said the Illinois State Toll Highway Authority has a "split personality." Officials are content with saying the oases are operating normally but "no one wants to look deeper at how we got to where we are today," she said.

Acting Executive Director Michael King noted that "the tollway is not liable for the Wilton debt and all the facilities are continuing to be maintained."

Tollway board member James Roolf added, "there is no taxpayer money at risk."

Sen. Jeff Schoenberg, an Evanston Democrat, countered that administrators should have known the oases were in trouble. "You could roll a bowling ball through there and not hit anyone," he said. "I find it hard to believe the tollway took a laissez faire, hands-off approach."

Garrett bristled at suggestions that about $2.56 million owed to the tollway by Wilton was a relatively small sum compared to its overall budget.

"I'm standing here saying it's not OK," she said. On Tuesday, iStar repaid $1.3 million of the debt.

Both senators said they were troubled that subcontractors and vendors hired by Wilton didn't have to undergo the screenings most state contractors are subject to. One fast-food franchisee, Panda Express, which was connected to convicted former Blagojevich fundraiser Tony Rezko, got a 50 percent break on rent.

Senators noted that in 2002 and 2003, the Teachers Retirement System invested in other Wilton lenders, Acadia Reality Trust, CapitalSource Inc., Fremont Investment and Loan, as well as iStar. Wilton's agreement with the tollway was made in 2002. Prosecutors allege that the pension fund was used by Blagojevich and his operatives to extort money from companies the TRS invested in.

A TRS official said the companies were chosen along with numerous others when the pension fund was trying to invest in more domestic companies.

Tollway officials said the deals involving Wilton and its lenders were separate from the authority.

Garrett also noted that earnings from the oases seem to have dramatically declined since 2000 and there were discrepancies in the financial reporting.

Some of the drama of the hearing was diminished by the fact some major players - like former Executive Director Brian McPartlin and former Chairman John Mitola - weren't there.

New tollway Chairman Paula Wolff said the session was a chance to learn. Going forward it is important for the agency to "be very open and above-board and deliberate about the business of the tollway," she said.

Roolf said the agency would learn from the past. But he noted that it has accomplishments to be proud of such as a $6.3 billion widening and rebuilding program. "Look at what's been done by the authority in terms of economic vitality," he said.

U.S. Equities was recently appointed to run the oases in place of Wilton.

More hearings are expected. The next topic to go under the microscope is expected to be a $1.8 billion construction program announced in October 2008 by Blagojevich to build and improve interchanges and create carpool or "Green Lanes" on existing toll roads.

In a related matter, the agency could be rethinking a plan to partner with Pace to put express buses on the Tri-State between the South and North suburbs on a dedicated carpool lane.