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Second warehouse deal under scrutiny

Owners linked to Bill Cellini

SPRINGFIELD -- Taxpayers are on the hook for a second warehouse, the owners of which, have ties to Bill Cellini. 

A newly constructed warehouse in the 2100-block of Eastdale Avenue displays a large sign reading 'State of Illinois Department of Transportation.' 

Just last year, it was an empty lot. Jesse Moats, owner of BJD Properties, Inc., built a 16,000 square foot warehouse and quickly leased it to the state for 5 years at $1.3 million.

The new warehouse is less than one-third the size of the old Barney's Furniture warehouse which sits just blocks away at 2410 South Grand Avenue East. Both lease deals are under increasing scrutiny for their costs and for their connections to a Republican power broker. 

In February, the state signed a 5-year, $2.4 million lease on the 60,000 square foot facility to accommodate old paper records for the Department of Human Services.

Michael Hoffman, acting director for the Department of Central Management Services, said the paper records were in danger due to dilapidated structures in Dwight, where they were being stored. He claims the state adhered to the legally required bidding process, although the only two bids originated from the same company. 

The building owner, Climate Controlled Holdings, LLC, was a brand new company which opened last year with three owners and just $15,000 cash on hand. Within a matter of months, the fledgling company had somehow managed to purchase a warehouse for $575,000 and immediately leased it to the state for $2.4 million.

A previous investigation revealed the company's owners had business and family ties to GOP mega-donor and convicted felon Bill Cellini. State law prevents any felon from doing business with the state for five years following a release from prison.

While Cellini is unable to profit personally from Illinois' taxpayers, those close to him are doing quite well. Raffi Vartanian, Cellini's son-in-law, is listed as one of the owners of Climate Controlled Holdings, although it's unclear what role he plays in the young company. His last known residence was in Dubai, United Arab Emirates.

Vartanian's share of Climate Controlled Holdings is registered under another company called Andiamo Development. 

Both of the other owners tied to the Grand Avenue warehouse also registered lesser known company names just in time to file their lease application with the state. Mary Hurwitz, an executive with Blackstone Group, opened up Kidstone LLC in September of 2016, the very same month CMS began drafting lease documents.

On the same exact date, another company filed with the state under the name SGA, LLC. It's owned by John and Mary Pruitt. John Pruitt is the President of E.L. Pruitt Company, according to state records. The company website lists John as it's CEO and describes Mary as the Chief Financial Officer. The Pruitt's new SGA, LLC is listed as the third owner of Climate Controlled Holdings. 

None of the owners of Climate Controlled Holdings have returned our calls, emails or responded to personal visits asking about the nature of their new company and it's rapid success. 

The Hurwitz family has given $8,700 to Springfield politicians during the Rauner administration, including a $2,500 donation to Citizens for Rauner.

The Pruitt family and company have combined to donate $29,800 to local politicians in Sangamon County since 2014. 

Pruitt and Moats are known business associates of Bill Cellini dating back to his pre-conviction days. State records show both of their companies have paid Cellini's company Pacific Management significant fees to manage their buildings while they are on lease to the state.

State Senator Tom Cullerton (D-Villa Park) used the lease deal to lambast Governor Rauner directly. Cullerton slammed Rauner for "prioritizing paper over people" in a Wednesday morning press release. 

Cullerton is calling for "an immediate investigation into how the governor's handpicked department head [Frank Vala] could abuse taxpayer funds and trust." Cullerton says the Legislative Audit Commission should launch a statewide probe into lease deals in search of irresponsible leasing agreements. 

Vala, also a longtime donor to the Republican party, chairs the Procurement Policy Board where he holds the tie-breaking vote over lease deals or vendor contracts. 

Governor Rauner has sought to distance himself from the initial warehouse lease, saying his office was not involved in the procurement process. 

"We have checked with the Chief Procurement Officer, who is appointed by the Ethics Commission on a bipartisan basis, and we inquired and they said all proper procedures were followed," Rauner said on Capitol Connection last week. "Everything was very transparent and above-board and they saw no unethical behavior involved in the process." 

Rauner vows he would move quickly to remove any appointee caught committing ethical violations. The state constitution does grant the governor power to immediately remove any of his appointees for incompetence, neglect of duty or malfeasance. 

*A previous version of this article mistakenly identified the owner of E.L. Pruitt Company as Joseph. His name has been updated to John.

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