Even for Illinois residents long accustomed to dishonest business and governmental dealings in Honest Abe's “Land of Lincoln,” the news came as a shock.
John Y. Butler, owner of Central Illinois Arena Management (CIAM), had been hit with 44 indictments relating to revenues allegedly withheld from the City of Bloomington, Ill. while CIAM operated the event space formerly known as U.S. Cellular Coliseum.
The alleged corruption hadn't been discovered by the folks at Bloomington City Hall. Nor had it been unearthed by local media in the Central Illinois twin college towns of Bloomington-Normal.
No, it had been dug up by a lone blogger, Diane Benjamin, who, holed up in a farmhouse outside town, used talents honed in her days as an accountant, as well as Freedom of Information Act (FOIA) requests and persistence, to uncover CIAM's alleged shenanigans.
“I first thought something was amiss back in 2013, just looking at the reports,” Benjamin says. “We had no details on where they were spending the money, too much was being spent on legal fees, and the concessions were never audited. The auditing of concession income should have been done by the City of Bloomington. The city did audit the rest of the revenues from the coliseum, but not the concessions.”
Butler had set up a separate company to run the concessions at the coliseum, and a city official had approved that separate company, Benjamin reports. “The contract did spell out the percentage of concession sales the city is supposed to get, but there's no way for the city to know how much that should be without knowing the gross.”
The city had purchased point-of-sale equipment to ring up sales throughout the coliseum. The contract gave the city the right to visit the coliseum and audit those sales at any time.
“We have a city manager form of government, and apparently the city manager did not appoint someone to do that,” Benjamin says. “I heard the previous city manager did not audit the concession sales, but did look at some of the event reports. And that the current city manager, who came here in 2009, never looked at any reports.”
As a former certified public accountant, Benjamin finds the analysis of numbers comes easy. “I'm comparing the CIAM-issued quarterly reports with the once-a-year auditor's reports, and the numbers didn't match,” she says. “The losses from operations could be hundreds of thousands of dollars off. CIAM showed less of a loss than the yearly audit did. They were not accruing the expenses they would have absorbed, to make the reports look better.”
Digging further, Benjamin found that, for instance, if a band played the coliseum and $20,000 worth of T-shirts were sold, CIAM took a four percent slice of $20,000. But it was entitled to four percent of the perhaps $2,000 remaining after the band got its cut, she says.
IT PLAYED IN PEORIA
The contract also stipulated the coliseum would be managed by one executive who had no other job. In fact, Benjamin says, CIAM had two managers on premise, both of them also managing a hockey team in Peoria, Ill., about 40 miles northwest of Bloomington. “Then they were running side companies out of the coliseum, including a bus company,” she adds.
But Benjamin's chief fascination was with the concession proceeds, “which was a big number, and no one was looking at it,” she recalls. “The concession sales went down every year, and it just didn't seem logical it was dropping that fast.”
On Sept. 21, 2015, Benjamin filed a lawsuit for the sole purpose of preventing the city of Bloomington and CIAM from simply renewing the contract. After all, she says, everything she had blogged about CIAM's management had been ignored by the City Council.
“I filed a FOIA request with the city and, of course, was denied,” she adds. “I knew by 2015 they were going to start negotiations with CIAM. In order to stop that I filed a lawsuit. It was pro se, I did it all on my own. In late 2015, I had settlement talks with the city, and one of the city attorneys was sitting in the talks and said, 'We didn't have a problem with what they paid us.' That indicated they hadn't bothered to find out how much they should have been paid.”
While the lawsuit phase was continuing, CIAM decided to vacate the contract at its expiration in March 2016, Benjamin says. “They then shredded all kinds of documents, and had a shredding truck come up and they were just dumping documents in it and shredding them,” she alleged. “And no one from the city did anything to stop them.”
TALE OF THE TAPE
About 15 months ago, in August 2016, the city obtained the cash register tapes of point-of-sale equipment, which yielded three years worth of total sales divided into concession types sold. Obtaining the figures herself, Benjamin determined what she believes was stolen.
The total: $447,317. “And that's just three years; they managed it for 10,” she says. “That doesn't include the concessions and management fees they took they weren't entitled to. I'm thinking it was way over $1 million.”
Last month, October of 2017, “five guys were charged with 111 felonies,” Benjamin reports. “They have a status hearing coming up. Nothing really big is happening yet. And pretty much everyone believes there's going to be a plea bargain.”
The bad old days are behind the city now that the venue has been renamed Grossinger Motors Arena and its management turned over to Ames, Ia.-based VenuWorks. “I don't know what the relationship between the management company and the city was like before we got there,” says VenuWorks president Steven Peters.
“But we always have a policy of complete transparency, and most of our clients are indeed municipalities. We're proceeding in that manner. That's how we've operated in the 16 months we've been at that arena in Bloomington.”
VenuWorks has ambitious plans for the arena in the months and years ahead, Peters adds. It will host a variety of family-friendly events, including Cirque Dreams Holidaze, Paw Patrol and a number of holiday shows. Comic Jim Gaffigan, World Championship Ice Racing and Judas Priest Firepower 2018 Tour with special guest Saxon will also perform there.
“We're home to a USHL hockey team in Bloomington, and there's a basketball team called The Edge in the building, part of the Premier Basketball League,” Peters says.
To win the management contract, VenuWorks went through a review process that involved a presentation to city officials, and an eventual approval by the Bloomington City Council. “We were in a process that also included Spectra and MSG; that was my understanding,” Peters says.
Acknowledging VenuWorks' headquarters only 325 miles from Bloomington may have given the company a leg up in helping capture the contract, Peters notes, “Most of our venues are in the Midwest, and they know we're close by if they need us.”
The 12-year-old event space is undergoing renovation, with rehabs of the dasher boards, glass and ice system topping the list. “A lot of good things are happening,” Peters says. “It's kind of a unique market, with a lot of great night life between Bloomington and Normal. You have Illinois Wesleyan and Illinois State University. We think it's a great market. It's a great building, and we're excited about the future.”
IRONIC NOTE
Benjamin observes with a chuckle that before the venue was built in the middle of the Millennial Decade, the city held a non-binding referendum to determine whether citizens wanted it constructed. “And 60 percent of voters said, 'Don't build it,'” she recalls.
It was built nonetheless. Twelve years later, her findings have left Benjamin unlikely to capture any popularity crowns with movers and shakers near the confluence of Interstates 55 and 74.
“The city hates me, because [this] proves they did not find bilking they should have,” she says. “And the media hate me, because they didn't find it either.
“I'm an unpaid blogger sitting in the middle of a cornfield, and I've identified more corruption than they've ever thought could have existed. And I'm not done.”