SPRINGFIELD – State Budget Director John Filan's cousin is a registered lobbyist representing Mesirow Financial, one of two companies Filan chose as financial advisers for the Governor's Office of Management and Budget on the state's recent pension bond sale.
"The procurement officer for OMB is John, and John chose them for their experience in both public finance and the bond market, in addition to their knowledge and experience in the taxable bond market," said Becky Carroll, spokeswoman for the Office of Management and Budget.
Filan's cousin, William Filan, has Mesirow listed as a client of his lobbying firm, William Filan Ltd., on lobbyist registration papers on file with the secretary of state.
William Filan's representation of Mesirow "absolutely did not" play a role in John Filan's selection of that firm, Carroll said.
The financial advising contract for the $10 billion bond sale is not to exceed $300,000 plus expenses, which was the lowest bid the state received, she said. That does not mean that was the bid Mesirow submitted, however.
"We get to pick and choose whatever financial adviser we want, but we have to go with the lowest bid price," Carroll said.
The two firms selected were Kirkpatrick Pettis and Mesirow, she said.
Mesirow's Chicago office is the site of several recent meetings between John Filan and representatives from the state's retirement systems.
The meetings were an attempt by the governor's office to persuade the systems to invest the pension bond proceeds in a certain way.
At one of the meetings, Lawrence Morris, senior managing director of investment banking for Mesirow, suggested the money be put in hedge funds, and he recommended three firms, including his own, to do the work.
While Carroll said Filan was only using the meetings to recommend an investment strategy, some attendees said the implication was to tell the systems where to do business.
Teachers Retirement System Executive Director Jon Bauman said he took a different view, however.
"I chose to interpret that it was because it was a convenient location," Bauman said. "I'm aware that other people didn't have that same interpretation, but I took it as merely a convenient location to have those meetings, and I've worked from the interpretation that Larry Morris was representing the state at those meetings and not the firm."
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