Unions are calling for an investigation into whether business leaders tried to persuade credit agencies to lower Illinois’ bond rating.
Ty Fahner, president of the Civic Committee of the Commercial Club of Chicago, gave a speech in March in which he said members of the group spoke with bond rating agencies about lowering state’s ratings.
“The Civic Committee, not me, but me and some of the people that make up the Civic Committee did meet with and call – in one case in person – and a couple of calls to Moody’s and Fitch and Standard & Poor, and say ‘How in the hell can you guys do this?’” said Fahner, referring to agencies not lowering the state’s credit rating. “You are an enabler to let the state continue.”
Anders Lindall of the American Federation of State, County and Municipal Employees believes those business leaders were attempting to force Illinois into making steeper cuts on state workers’ pensions.
“These powerful CEOs and lobbyists are going behind closed doors to try and drive down the state’s credit rating,” said Lindall, “and drive up the state’s borrowing costs.”
Lindall says an investigation is warranted in case any members of the committee stood to profit from higher interest yields that would result from a lowered bond rating for the state.
“They may very well themselves own Illinois bonds,” Lindall said. “If that’s the case, then by pushing to drive down the state’s credit rating and drive up costs to taxpayers, they’re funneling more money into their own pockets.”
During Fahner’s March speech, he said that group members had stopped talking to the three major credit agencies about Illinois’s bond rating.