SPRINGFIELD — Business owner and Republican Procurement Board Chairman Frank Vala knew when he allowed a $2.4 million lease agreement to be approved that it would benefit the daughter and son-in-law of his longtime friend Bill Cellini.
“I’ve known Mr. Cellini all of my life,” Vala said.
Asked when they first met, he replied, “40 or 50 years ago. I don’t remember. It’s Springfield.”
Cellini is the former owner of New Frontier Developments. He was also a longtime Republican donor and fundraiser. After his 2011 conviction on corruption charges, the ex-Treasurer of the Sangamon County Republican Party handed control of his real estate company over to his son, William Jr., and his daughter, Claudia Cellini.
State documents filed in February 2017 list Claudia as the sole President of New Frontier Developments, even though she has lived in Dubai for several years. It remains unclear whether she plays an active role in directing the business. William Jr. is no longer listed as an executive.
WCIA has learned Claudia Cellini’s husband, Raffi Vartanian, is separately listed as a one-third owner of Climate Controlled Holdings, LLC. The company just opened for business in February of 2016. In 14 months, the infant corporation has managed to purchase a 62,000 square foot warehouse and immediately lease it to the state of Illinois at a remarkable premium. State documents reveal the privately held company began with a mere $15,000 cash on hand.
Climate Controlled Holdings bought the old Barney’s Furniture Warehouse for $575,000 on January 3rd, 2017. State documents were already being prepared to obtain a government lease five months prior — in September of 2016 — before the warehouse sale was even completed. Less than one month later, the state of Illinois had entered into a binding agreement to pay a minimum of $2.42 million to the upstart company in exchange for a 5-year lease of the facility.
Vala argued the deal isn’t as bad as it looks on the surface. He told us, “You’ve got to understand, besides being purchased, that building had to be renovated.”
Central Management Services Executive Director Michael Hoffman says an independent estimate figured the renovations would cost roughly one million dollars. The lease agreement was contingent on the company installing a security system, removing all non-load bearing walls and installing a depressing loading dock area in the rear entry area.
Other sources familiar with the state’s storage requirements cast doubt on the cost estimate, calling it steep and inflated. They spoke on condition of anonymity, in order to speak freely without upsetting superiors. Even if the cost of the renovations were one million dollars, the net profit still comes out to over $854,000. That sum would be split between the three listed property owners, each taking home a cut worth more than $284,000.
The Chairman of the Procurement Board thought this was a fair deal for taxpayers.
The Springfield native owns five companies, including Community Care Systems, a home care company that does regular business with the state of Illinois. Just last month, Vala’s home care company called on Comptroller Susana Mendoza to release state funds so it could make payroll. Vala tells WCIA the state still owes his company several million dollars in unpaid bills.
But when Vala had a chance to help the state save money, he chose not to intervene. As chair of the procurement board, Vala’s tie-breaking vote can determine whether or not the state moves forward with a new lease or vendor contract. He claims he was not required by law to vote on the deal, although he concedes the board did have the necessary power to vote against this arrangement.
“That lease was presented to the board,” he said. “It was looked at. It did not require a vote, because it was an RFI.”
Asked how long he’s known Claudia Cellini, Vala answered, “Since she was a little kid.”
Vala confirmed he also knows about Cellini’s husband, Raffi, and says he’s even met him in person.
Even though he admits his close relationship to the beneficiary of a deal worth several million dollars, Vala did not recuse himself from the procurement board meetings at any time during this lease discussion. He claims four members were in attendance for the discussion, which would have been enough to hold a vote, but the board chose not to cast one. The board members are well aware their silence is an effective rubber stamp. Without their objection, the lease was allowed to be approved.
“We did our due diligence,” Vala said. “We followed the law.”
Hoffman also said this deal was lawful because it included two competitive bids. They both came from the same company. Hoffman claims the lease also did not include any members disbarred from doing business with the state.
Financial disclosure forms obtained by WCIA ask applicants whether or not the company owner has “had State employment, including contractual employment for services, in the previous two years.” That question would have eliminated Vala from consideration, but it did not block him from allowing the deal to advance.
Another question asks, “Within the previous ten years, have you had any criminal felony convictions?” That question would have ruled out Bill Cellini, but it did not preclude his son-in-law from winning the contract.
Vala would not answer directly whether or not he would have voted to approve the lease, but he did argue in favor of its merits on several occasions. He also held the power to make the motion that would have triggered a vote.
None of the members or administrators of the board that talked with WCIA could provide one example where the panel successfully leveled a permanent objection against a vendor contract or lease during the Rauner administration.
Vala says he likes to “give back to the community.” He also serves as the Chairman of the Springfield Airport Authority and a trustee of Woodside Township.
Prominently featured on Vala’s office desk sits a book satirically titled, “Reasons to Vote for Democrats: A Comprehensive Guide.” Inside, the book’s barren pages display nothing but page numbers.