SPRINGFIELD, Ill. (WCIA) — Before he suddenly announced his retirement last Thursday, Senate President John Cullerton accumulated vast power, wielded it to pass historic legislation, and was poised to play a prominent role in shaping the state’s political maps that would impact Illinois elections for the next decade.

Cullerton plans to walk away at the peak of his political power

Instead of riding the hot streak, Cullerton announced he would walk away while he and his party were on top, leaving his colleagues stunned, and opening the door for his critics and opponents to question his timing. 

Our examination of financial documents, interviews with top lieutenants and staff, and an investigation of his private business dealings reveals that while he was racking up milestone legislative accomplishments to raise the legal smoking age, legalize recreational marijuana, expand gaming, and pass a $45 billion dollar capital infrastructure plan, behind the scenes, his caucus was devolving into a tailspin and his campaign operation was already in tatters.

Whichever of the 39 other Democratic senators should replace him in January will inherit a thorny tangle of ethical and legal headaches, as at least three sitting members of the caucus are either facing federal indictment, under investigation, or wiring up for the FBI. 

Cullerton’s critics say he was slow to punish those members, and that he did little to advance tougher ethical laws in the waning days of the 2019 legislative year. He opted instead to put his political muscle into a failed attempt to close a casino deal for the city of Chicago, though he still holds out hope that a deal will get done.

“I can tell you the actual plan that has been agreed to by the mayor [Lori Lightfoot], the Governor [J.B. Pritzker], me, and Representative Rita (D-Blue Island) is certainly going to be the law,” Cullerton predicted in a phone interview on Friday.

Cullerton was paid $20,000 to lobby Chicago in $700 million ad deal

Cullerton himself is a registered lobbyist with the city of Chicago. That’s the kind of side work Republicans and some Democrats wanted to ban after House Democrat Louis Arroyo, also a registered lobbyist in Chicago, was arrested and slapped with federal bribery charges in October. 

Cullerton maintains his work as a lobbyist was part of his ordinary course of business at his law firm, Thompson Coburn, where he is a partner. The law firm’s website advertises its experience “working in…government,” and offers access to a “vast network of contacts.”

“Lawyers have confidentiality with our own clients,” Cullerton told WCIA when asked to elaborate on the work he provided as a lobbyist. “I listed two clients that I represented because I had to come in contact as a lawyer. I wasn’t trying to pass a law. I didn’t come into contact with any aldermen.”

Records filed with the city of Chicago over the last year show that Cullerton registered as a lobbyist to represent credit reporting agency Trans Union LLC, an international street furniture and bus shelter company JCDecaux, and Poonja, Ali & Faisal, a company linked to a string of Burger King franchises that has been accused of wage theft. 

City records show Cullerton helped the fast food franchise owners register for a concession stand in the O’Hare airport in 2018. He also lobbied City Hall for JCDecaux when the company was working to install digital billboards throughout the city and set up digital advertisements at O’Hare. According to a 2013 company press release, JCDecaux entered a 20-year contract with the city of Chicago in a public-private partnership worth $700 million in advertising revenue. Records show the company paid Cullerton a total of $20,000 to lobby City Hall on their behalf on at least four separate occasions dating back to 2012. 

The Senate President explained that “the city of Chicago’s ordinance is extremely broad in their definition of lobbyists.” He suggested that perhaps the city could relax its public disclosure requirements, but lamented that such a move in that direction would likely be pilloried in the press. 

Donations, debt, risky investments compounded by sloppy accounting

On the political side of his operation, the four separate campaign funds Cullerton controlled sit in varying degrees of debt and disarray. Several members of the party complained to Cullerton about what they perceived as a “mismanagement of funds.”

Records filed at the State Board of Elections show the Senate Democratic Victory Fund took on $630,000 in debt in the final weeks of the 2018 election cycle. The risk paid off. Voters delivered Cullerton unprecedented political power with a supermajority of historic proportion.

“We were very successful and won 40 seats, picked up 3 seats,” Cullerton said. 

However, despite strong financial backing, boosted by an extra $2.5 million from billionaire Governor J.B. Pritzker, the Victory Fund burned through so much money, it took most of 2019 for Cullerton’s team of political fundraisers to fill that hole. 

In addition to taking on more than half a million dollars in debt, Cullerton’s campaign accounts lost tens of thousands of dollars in risky investments, paid out high fees to brokers, navigated through software glitches, and submitted campaign finance reports that Cullerton now acknowledges were littered with discrepancies and inaccuracies that, on the surface, appeared to some Democratic senators to look more like sleight of hand than transparent disclosure.

The Senate President controls four separate political campaign funds that each serve a different purpose, but for years were all operated by the same aide and controlled at his direction. The campaign finance records from the Senate Democratic Victory Fund, the Citizens for John Cullerton for State Senate campaign fund, the Committee to Support John Cullerton for State Central Committeeman, and the Illinois Democratic Heartland Committee, taken in tandem with dozens of interviews with Democratic senators and political staff, paint a broader portrait of disharmony, discontent, infighting, turmoil and turnover.

Complaints triggered campaign shakeup

In September, Cullerton parted ways with his longest, most loyal political aide, Liz Nicholson. She first met him in 1992 during his failed primary bid for Congress against then-incumbent Congressman Dan Rostenkowski. Nicholson went on to work with Cullerton on and off in campaigns and in state government sporadically over the better part of the next three decades. She led the helm of his campaign operations as his chief fundraiser and served as his go-to campaign operative for the entire ten year period that he led the Senate Democrats.

Nicholson raised $18 million dollars for Senate Democrats in the 2018 cycle. Then, in the fall of 2019, she abruptly left to launch her own fundraising company to assist charities and nonprofits. Until her exit, few political partnerships in the state had lasted as long as Cullerton’s with Nicholson. Political writers promptly passed the move off to their readers as an ordinary transition for her to pursue new career opportunities, but elected officials and campaign operatives close to Cullerton knew better. 

“I think John and I probably ran our course,” Nicholson said during an interview at an Italian restaurant on Chicago’s north side this weekend. “Everything was very successful under John and me,” she said, but she suspected some ambitious Senate Democrats may have wanted to push her out.

Senators Andy Manar (D-Bunker Hill) and Melinda Bush (D-Grayslake) flagged a number of questionable campaign expenses and raised the issues with Senate President Cullerton after the 2018 election ended, according to several sources familiar with their conversations.

“They want his job,” Nicholson said. “John and me were a very good team. I knew John better than a lot of people did, and I did a very good job keeping the ship together. When I left, the whole thing fell apart.”

Toward the end of Cullerton’s reign, his relationship with Nicholson soured. In the months that followed her abrupt exit, Cullerton’s most loyal allies mounted a whisper campaign to raise doubts about Nicholson’s focus and performance on the job, and to question whether or not personal financial pressures may have complicated her allegiance to the integrity of the fund. 

Nicholson and her husband, former NFL offensive lineman Gerry Sullivan, were plaintiffs in a class action lawsuit brought against the NFL in 2011, which was eventually settled in 2017. 

However, Nicholson said they still did not see any compensation from the settlement until two months ago, after she left Cullerton’s political operation. During that demanding election cycle, her husband’s health was deteriorating further. 

“Maybe two months ago, we were finally awarded an Alzheimer’s award,” she said. Even after the settlement money arrived, she and her husband were still frustrated, she said, because, “most of the money goes to the attorneys, and the payouts were nothing like we thought they would be.”  

Compensation clash over unpaid bonuses

Nicholson had similar frustrations with her political job.

“I was owed bonus money,” she said. “It was win bonuses.”

But, according to Cullerton, Nicholson had no written agreement to be paid a commission on the amount of money she raised or on the number of Senate races they won together. She produced an email from 2009 that did not include Cullerton’s signature, but did appear to show a “bonus arrangement” from a former political director that offered her $10,000 for every six month period she exceeded certain fundraising benchmarks, which she believes would have made her eligible to earn up to an additional $40,000 in bonuses each cycle. When Nicholson left, she took a spreadsheet with her that included records of bonuses paid out to other staff.

“I was hoping that every cycle, if I stayed on as Political Director, my base salary should be increased, because I was missing out on years of paying into the State Employee Retirement System,” she said.

Nicholson was a top government aide in the Blagojevich and Quinn administrations, and said she had to skip out on piling up state pension benefits when she took the plunge into full-time politics.

Under Cullerton, her annual income started out at $64,842 in 2010 and steadily increased. By 2019, she was on pace to earn $185,229 in salary before she suddenly left the job. According to Nicholson, the raises were not intended to be her only source of added income.

“There were a couple years where I would forgo my bonus money that was owed to me,” she said.

The bonus dispute was only the beginning of the financial nightmare.

Investment gains, losses not visible in campaign finance documents

In addition to cash they hold in bank accounts, campaign funds like Citizens for Cullerton and the Senate Democratic Victory Fund also hold investment funds that can accrue interest or depreciate in the market. At times, when campaigns are hard up for cash, they will liquidate those investments to free up the necessary cash to fund immediate needs, often in close races.

More than a year after the 2018 election, the investment reports filed with the state are still full of errors and inaccuracies. At times, portions of money liquidated from an investment would show back up in the wrong account, or at other times, it never showed back up in the fund at all.

Other investment funds were lost outright. Magen Ryan, Cullerton’s new finance director, provided one document from National Securities Corporation to demonstrate a Senate Democratic Victory Fund investment suffered $35,801.08 in losses during a volatile stretch on the market.

“We were initiating sell orders during what our broker called the worst period of the decade,” Ryan explained in an email.

Because state law doesn’t require campaign committees to disclose or itemize a loss or a gain in an investment, the dramatic drop in value appeared to some members of the Senate Democratic caucus to be money that was gone without any explanation.

“[Nicholson] probably picked this company we sent this money to,” Cullerton said. “In retrospect, when you lose that much, that was a risky investment.”

Ryan confirmed one account still shows more money than it actually has, and another has less. She said her staff is working to file amended reports to the State Board of Elections to update the accurate amounts.

“Mistakes were made by the prior leadership team,” she said.

When asked if he would hire Nicholson back for the same job, Cullerton responded, “I can say no.”

When the Senate Democratic Victory Fund liquidated $148,900 in early 2019, $86,500 of that money was deposited into the Citizens for John Cullerton for State Senate account. Over the next several months, Nicholson paid herself $72,611 in bonuses in 2019, taking that money from Cullerton’s personal campaign account, instead of the Senate Democratic Victory Fund.

“She left shortly thereafter,” Cullerton said. “I have difficulty even talking about the separation for certain reasons.”

He wouldn’t elaborate further, but sources with knowledge of Nicholson’s exit described a joint gag order they both agreed to upon her exit in order to contain any future fallout. WCIA has confirmed the existence of the legal document.

Cullerton squirreled away a nest egg for himself in his campaign fund

During the heat of the 2018 election cycle, the political director for the Senate Democratic Victory Fund was spending record amounts of money. Later, members complained the campaign finished somewhere between $300,000 to $500,000 over budget. In order to replenish their accounts, Cullerton’s liquidated assets and distributed money back into related campaign coffers, except for one investment account he left untouched.

At the time of this publication, the only investment left in Cullerton’s campaign account is held under a certificate of deposit in his name at Belmont Bank. State records show an apparent discrepancy in the fund balance. The cover page of the quarterly D-2 report filed with the state shows a balance of $142,698.09, however the actual Belmont account itself only shows a current value of $102,198.09. According to the reported documents, the money in that account has remained constant since the close of 2018 without depreciating or gaining so much as a penny of interest.

When he was asked on Sunday why the account appears to be frozen in place, Cullerton answered, “We’ve been trying to get online to look at the account, but we don’t have the code to get into it.”

According to multiple sources with knowledge of the fund, only two people had access to the account at Belmont Bank: Nicholson and Cullerton.

“I opened it at John’s direction,” Nicholson said. “I have nothing further to say about it.”

“When I left employment, I made sure my name was not on any documents moving forward,” she added when pressed further. “That’s John’s story to tell.”

Whether the funds are locked or the key is lost, Cullerton says he instructed his finance director not to take money out of that account, placing an effective freeze on the funds.

“I always told her, just make sure you never touch the $100,000,” he said, “because I want to make sure I always have that.”

The first record of the Belmont Bank investment shows up in campaign finance records in the spring of 2014, with a listed purchase date of April 6, 2014. However, in early 2017, the listed purchase date on the certificate of deposit was changed to January 21, 2011, without any explanation or letter to the State Board of Elections.

Cullerton says he assumes that was a typo or mistake committed in error when someone submitted a quarterly report to the state. He said the staff would correct the mistake in a new letter and said he was grateful the error was brought to his attention.

Cullerton is one of 11 remaining state lawmakers with a campaign fund that predates a 1998 cutoff that legally allows him to use the balance of those leftover funds for personal use. That’s why he says he squirreled away more than $100,000 as a personal nest egg in a certificate of deposit. 

“If for some reason, if something happened, I’m always going to keep that there,” Cullerton said.

Cullerton’s business associates run a bank linked to FBI probe

The bank that holds Cullerton’s certificate of deposit also happens to be owned by his business partners.

Cullerton is in business with two members on the Board of Directors at Belmont Bank and Trust through a popular restaurant in Chicago’s Gold Coast. Jimmy DeLeo, a former state senator who sits on Belmont’s board, owns an ownership stake in Tavern on Rush. Jim Banks, the Chairman of the Board at Belmont, is also invested in the restaurant with Cullerton. Customers who visit the upscale tavern walk past a Belmont Bank ATM beside the valet when they enter the front door.

“Anytime Jimmy DeLeo’s name is thrown around, it’s as if he’s a bad guy,” Cullerton complained. “That happens all the time, but he’s a friend of mine. And I know he’s got this bank, and it’s conveniently located, and it’s just a C.D.”

It may be “just a C.D.,” but its digital records are held on the same servers with other bank records currently in the possession of the F.B.I.

Loans issued by Belmont Bank to the Cinespace Chicago Film Studios have come under scrutiny of the federal government in recent months. The production facility’s president Alex Pissios reportedly cooperated with the feds to help them charge Teamsters boss John Coli with extortion. 

According to charging documents, Coli confessed to gifting state Senator Tom Cullerton with a union salary he didn’t earn. The Villa Park Democrat, who is a cousin to the Senate President, agreed to resign from the Senate Labor Committee, but denied any wrongdoing. Coli pleaded guilty, and agreed to cooperate in exchange for a lighter sentence.

President Cullerton said, “No,” federal investigators have “absolutely not” contacted him about his ties to Belmont Bank. Nicholson declined to comment when asked the same question.

Cullerton’s exit entices ambitious senators to angle for his job

Cullerton told his colleagues and newspaper reporters that he decided to resign from his prolific post because of an arrangement he had worked out with his wife. 

He says he kept his cards close to his vest because, “If people think you’re leaving, it would be a nightmare. People would’ve been campaigning instead of trying to get important work done.”

The campaign to replace Cullerton is already in full swing. The caucus meets to appoint his successor in January, and senators have already begun outreach to test the waters and chart the course of their political futures. It’s the first opening of its kind in a decade, and at least a dozen senators have been enticed by the power it offers, but all the problems that come with it are a package deal.

Editors note: This article has been updated to clarify the specific timeframe and bonus compensation structure Liz Nicholson believes she was owed. A previous version said she was eligible for $10,000 per election cycle. The email in her possession states she was eligible for $10,000 per 6-month period within each cycle.