Joliet’s new city manager leaves behind brewing financial scandal

JOLIET – City Council members said Wednesday that Bloomington City Manager David Hales never mentioned the financial scandal brewing under his watch before he was hired.

Hales was hired last week to be Joliet’s next city manager at a salary of $215,000. He is scheduled to start in November.

This week, five people with a company that previously managed the former U.S. Cellular Coliseum in Bloomington were indicted and charged with theft of $1.1 million in city funds. The U.S. Cellular Coliseum is owned by the city of Bloomington.

Three council members said they are only beginning to hear about the financial problems in Bloomington and are trying to find out more.

“I think we should have known about this,” council member Pat Mudron said. “Like anything else, there’s more than one side of the story. But I think we need to know all about it now.”

Mayor Bob O’Dekirk said he was first learning about the problems in Bloomington and planned to find out more. But he said it is premature to assume that Hales knew about the criminal investigation when he was interviewing for the job in Joliet.

“If there’s a pending criminal investigation, I don’t know who knew,” O’Dekirk said. “I don’t think the city manager knew what the state police were doing.”

The investigation was conducted by state police. A McLean County grand jury brought an 111-count indictment against five people, all employees of Central Illinois Arena Management, which ran the U.S. Cellular Coliseum.

“These are not even city employees. They’re contractors,” Interim City Attorney Chris Regis said.

Regis, who also serves as the city’s inspector general, said the indictments should be seen as “a major plus” for Hales.

“That’s the guy you want,” Regis said. “If somebody commits crimes on your watch and gets caught, that’s a good thing. ... I don’t understand why this is a knock on Hales at all. This is a major plus.”

Regis also said it should not be assumed that Hales knew of the investigation.

Hales could not be reached for comment.

But Hales told Bloomington radio station WJBC this week that the city called in state police after detecting problems during a transition in management at U.S. Cellular Coliseum as VenuWorks was taking over the facility.

“The city was the one that identified and uncovered concerns as we were going through this transition from CIAM to VenuWorks based on some kind of in-depth, deep-dive investigation into the financial affairs and closing out CIAM,” Hales told WJBC.

“It was at this point in time,” he said, “that the concerns were identified, and the city approached the Illinois State Police asking for their help to investigate.”

U.S. Cellular Coliseum now is managed by VenuWorks, the same company that manages the Rialto Square Theatre in Joliet. The city does not own the Rialto, but the city is the primary funding source for the Rialto, contributing $500,000 a year.

Council member Michael Turk said he only remembers U.S. Cellular Coliseum coming up in the interviews with Hales in the context of VenuWorks.

“I talked about how they have VenuWorks down there. We have VenuWorks here,” Turk said. “It did not come up other than that.”

Turk and council member John Gerl said they need to find out more about what happened in Bloomington before commenting on the situation.

“I don’t want to even comment on it because I don’t know anything about it,” Gerl said.

Mudron, however, said the council should take another look at Hales in the context of the news from Bloomington.

“That’s under your watch. You’re the boss,” Mudron said.

The alleged theft is believed to have occurred between May 2010 and March 2016.

Hales became Bloomington’s city manager in January 2009.

Central Illinois Arena Management already was managing U.S. Cellular Coliseum when Hales arrived. The theft allegations go as far back as 2007 and continue until March 2016.

The indictments against the five former managers of Bloomington’s city-owned arena include charges of money laundering and wire fraud.

The Bloomington Pantagraph reported that a McLean County grand jury returned the indictments Wednesday, and they were unsealed Monday after the five defendants posted bond. The charges come after an 18-month investigation into alleged mismanagement at what was then known as U.S. Cellular Coliseum.

Hales’ salary of $215,000, is more than what former City Manager Jim Hock made when he retired in May. Hock’s 2016 salary was $188,000, although he received extra compensation raising his gross pay to $196,000. Joliet advertised the city manager job as paying up to $220,000.

Hales, 63, had a salary of $189,000 in Bloomington, according to The Bloomington Pantagraph.

Before being hired in Joliet, Hales was among finalists for the city manager job in Topeka , Kansas, in July. He also was a candidate for the city administrator job in Racine, Wisconsin, until taking himself out of the running in March.

In September 2015, Hales was quoted in a press release as saying “The City is fortunate to have a group of very dedicated and talented individuals, under the direction of John Butler and Bart Rogers, managing the city-owned Coliseum.”

Butler and Rogers are among the five people indicted. Central Illinois Arena Management managed the arena until April 2016. They are charged with stealing city funds, money laundering, wire fraud and conspiracy, filing false sales tax returns and conspiracy to commit tax evasion.

Butler, president of the management company, faces 44 counts, including theft of government funds. His attorney didn’t immediately respond to an email seeking comment.