Former Harrisburg Mayor Eric Gregg, shown here at a fundraiser for tornado victims, has filed Chapter 13 bankrutpcy.
SALINE CO./U.S. BANKRUPTCY COURT, BENTON—A former Harrisburg mayor has filed for bankruptcy in U.S. Bankruptcy court in Benton.
Eric Gregg, who is not only a former mayor of Harrisburg but also a former Saline County board member and a current member of Illinois’ Prisoner Review Board (PRB, or, parole board), filed a Chapter 13 (restructuring) personal bankruptcy on December 8, 2014, seeking to put creditors on hold so he can pay off an accumulation of debts over the next several years.
This comes as no surprise to many, including Harrisburg sources who had been telling Disclosure over the years that Gregg has always had a problem with welching on debt. However, this is the first bankruptcy Gregg has filed, and comes despite the fact that he makes more than $86,000 a year as a gubernatorial appointee to the PRB…and that his wife Patty has “taken over” the business Gregg held longer than he should have according to Illinois statutes that regulate how a PRB appointee should conduct their business ventures and other sources of income.
It also comes after activity in the lawsuit filed against him in Saline County court in 2012 seems to have come to a complete halt, since Gregg continued to lose attorney after attorney in the case wherein a former partner of his, LuAnn Walker, sought to retrieve money owed to her through their business venture, money which Walker claims Gregg simply walked off with just prior to dissolving the partnership.
What Chapter 13 is
Under Chapter 13 bankruptcy, an individual is provided the opportunity to propose a plan of financial reorganization and restructure their debt to meet their income.
There is no discharge of debt under Chapter 13, unlike Chapter 7 bankruptcy. A Chapter 13 filer generally has spent more than he can afford to pay back on high-interest credit cards or other consumer loans such as auto loans, has become “upside-down” in a home mortgage/second mortgage, or has incurred extreme medical debt.
In Gregg’s case, it appears that all of the above apply. And because he does have a regular source of income (to the tune of about $1,700 a week before taxes), but somehow just can’t make his payments, he’s allowed to restructure under this particular type of bankruptcy.
Interestingly, Gregg has filed the bankruptcy on his own (individually) instead of jointly with his wife, although throughout the bankruptcy paperwork, he refers not only to her joint ownership of the indebtedness, but also the income she has through his “shifting” of his former business from his name into her name.
Gregg, as PRB member, is disallowed by Illinois law to hold a position on the board as well as own a business, hold any other position of employment that provides an income, or hold any elected or appointed office. The premise is that someone on the PRB could easily be swayed to review the cases of potential parolees with a view toward how it might affect the case if the PRB member holds a political office (such as that of mayor) or might come to some monetary gain (such as enhanced employment or business opportunities). The PRB member, in other words, must be free of any outside influences while holding the position.
Gregg, regular readers will recall, while still mayor of Harrisburg, was appointed to the PRB by then-Gov. Pat Quinn April 26, 2013.
Not only did Gregg not give up the position of mayor until July 8, 2013 (meaning he held either the mayoral office or the position on the PRB illegally for more than 13 weeks), but he also had income from his MidAmerican Energy Services company (now known as Southern IL Energy Group and “owned” by his wife; this is one of those energy aggregate ventures that provides electricity supply in deregulated markets in the U.S., and the company LuAnn Walker was a part of before Gregg messed with their partnership.)
Gregg, during his time of holding the spot on the PRB, also had income in some form from a WEBQ radio show (“Monday Mornings with the Mayor”); and, he lied on his application for state employment about all of it, as well as stating that he’d had no more income from any source in the calendar year prior to applying (which would have meant all of 2011) than $1,200 annually.
Less-than-truthful info
According to bankruptcy paperwork on file in Benton, Gregg is being less-than-truthful again about income.
On the very first page of the Voluntary Petition for bankruptcy, the question of “all other names used by the debtor in the last 8 years, including trade names” contains the answer “formerly doing business as Southern IL Energy Group.”
Documents Disclosure obtained via FOIA in 2013 show that the name of the company Gregg incorporated and sold energy aggregate to local entities under was called “MidAmerican Energy Services.” On his resume to the state senate, through which he applied for the PRB position, he also listed “CenterPoint Energy Services” and indicated that he held a job as “Eric E. Gregg Consulting Services.”
At the time he was applying for the PRB job, Gregg also listed that he worked for the Saline County Industrial Commission, a lightly-compensated job which provided Gregg with about $25,000 a year, this confirmed by SCIC officials in 2013.
Further, Gregg of course received compensation for his time as mayor (about $800 a month)…and this remains unlisted, as well.
All of the above sources of income, Disclosure has confirmed, occurred within the past 8 years, as set forth by the bankruptcy filing.
There may be other income Gregg has that he’s merely obfuscating, as he was able to do in 2012 when he put in the application for the PRB; those listed above are merely the sources for which Disclosure obtained proof, during the investigation into the wrongdoing Gregg was accused of in the weeks leading up to his resignation as mayor.
To date, no one has taken any action against Gregg for lying on a state application, despite repeated requests for an investigation into the matter, requests which went all the way to the state senate, the PRB itself, and the governor’s office.
Whether such falsification of information will come back to bite Gregg on the bankruptcy remains to be seen.
Pre-emptive strike?
Perhaps most importantly within this bankruptcy is the effort Gregg is making to ensure that Walker doesn’t get any of the money she claims he owes her—as a pre-emptive measure.
Ordinarily, a person has to declare the exact items of debt they currently owe before a discharge or restructure is possible.
Gregg lists Walker’s claim against him (for $10,000, which he states he does NOT owe her) as one of the debt items seeking to be restructured.
However, the case, still active in Saline County court, has not been decided yet. The matter has been languishing as Gregg has gone through one attorney after another, each of them bowing out apparently when they see the evidence against him (that he partnered with Walker, then took her earnings through MidAmerican Energy), most of whom he didn’t pay and of whom he’s listed as creditors.
Walker, it appears by U.S. Bankruptcy Court filings, has opted to fight the bankruptcy, as creditors are allowed to do. How she intends to do that is unknown at this juncture. However, she has the right to file an objection to the restructuring, especially since there’s been no decision made in her case.
Whether Gregg’s listing of the issue with Walker as a “debt” is an admission that he actually DID take her money several years ago, which action prompted her to file, also remains to be seen; apparently, a good argument could be made for just such a thing.
Didn’t pay income tax
Another interesting aspect of the filing is the fact that Gregg lists $10,000 in unpaid self-employment income tax.
Unfortunately the bankruptcy paperwork doesn’t show which years Gregg failed to pay; however, that might be some more obfuscation he’s pulling in order to stay with the line he’s given the PRB: that he didn’t have any other income while holding the job when appointed April 26, 2013.
Again: it is against the law for a person to be seated on the PRB and have any other income or hold any other elected or appointed position. Gregg did both, for more than two months.
If Gregg didn’t pay self-employment taxes (likely out of the energy group, although there might be other income he’s hiding), the IRS doesn’t play very long with someone like that. So this bankruptcy might come on the heels of the IRS making a demand. With the most recent completed tax year being 2013, that amount might represent a 2013 tax burden…and that might mean that Gregg has been caught, again, having income during a time frame when he held a position on the PRB (against the law) and now, he’s trying to just “make it go away” quietly by a restructuring bankruptcy.
So…what DID all that fundraising pay for?
But an even more disturbing facet of a mayor who didn’t pay his taxes has emerged in the bankruptcy filing.
On the Schedule F/Creditors holding unsecured nonpriority claims, Gregg lists several medical debts.
While only one is listed by amount, two others are mentioned. A debt to Deaconess in Evansville is listed as $38,031. Two others, Harrisburg Medical Center and Ohio Valley Medical Center in Wheeling, WVa., are listed but no amounts are given.
Those who have followed Gregg’s follies over the past several years will recall that shortly after the Leap Day Tornado of 2012, Gregg was hospitalized with what was ultimately publicly revealed as diverticulitis.
It was later suggested that the diverticulitis was brought on by excessive drinking, which Gregg was known at the time to do.
Nevertheless, with his status as mayor and with the disaster having happened to the town over which he presided, kind-hearted Saline Countians got together and held fundraising benefits for Gregg. It’s unclear exactly how much money was raised by these efforts.
Further, one prominent Harrisburg man has advised Disclosure that he was the one who went to Gregg and told him to apply for a retro-active public aid medical card, since he had so many in his household and with his ability to fudge his self-employment income, he could overcome the threshold of making too much money to be eligible. This, Disclosure was assured, happened.
So why there is so much medical debt remains unknown, since the public, through a couple of different venues (both voluntary [fundraisers] and involuntary [tax dollars for Medicaid]) has already paid significantly toward it.
Interestingly, Gregg listed in his assets (Schedule C/Property claimed as exempt) as a “lift chair” that one Harrisburg resident actually purchased for Gregg so he could get up and down comfortably in his home after his hospital stay.
However, a vehicle listed under Schedule D/Creditors holding secured claims (loans that have an item that can be repossessed, as opposed to credit card purchases) is part of his restructuring; Gregg is said to have financed the 2011 Hyundai Sonata through Farmers State Bank shortly after his hospital stay and subsequent donations in 2012.
Makes a lot, has a lot, owes a lot
On his recent bankruptcy schedules, filed Dec. 22, Gregg indicates that he and his wife make $157,020 annually.
He claims to have $61,725 in assets (including a house, cars, furniture and other sundry items) and $138,066 in total liabilities, some of which include owings to a couple of southern Indiana collection agencies. (Disclosure was unable to find open collection cases having been filed in Vanderburgh or any other Indiana county).
The law office of Brad Olson, to whom Gregg has paid $150 of a $4,500, has signed on as the attorney of record. However, court documents on file make it clear that Gregg has been court-ordered to make a $1,000 payment per month, in the form of a money order, to Olson in order to pay off THAT debt.
Why Gregg, with assets and income exceeding his current debt load, can’t seem to make ends meet, especially with a steady paycheck courtesy of the taxpayers of Illinois, is beyond most people’s ability to reason.
Whether this will impact his apparently already-tenuous position on the PRB also remains to be seen.
However, the PRB puts up with a lot…and seems to have about as rummy a staff of gubernatorial appointees as any board in the state, as evidenced by information Disclosure received at the end of December.
An inmate speaks of first hand experience with PRB employee
At that time, Disclosure received correspondence from the ex-husband of another PRB-associated person, Robin Miller, who has been a state employee for 27 years and a PRB “institutional liaison” for a significant portion of that time.
In the letter, Jon Mettler, who is currently in prison on a burglary conviction out of Menard County, explained that when he and Miller were married, and she was in charge of ensuring that correspondence from inmates and their families was getting to the proper destination for consideration of clemency (which is what the Prisoner Review Board does), she would trash entire boxes of said correspondence—and he helped.
“(Robin) would remove copy boxes from her office (at PRB in Springfield) full of unopened and opened mail from inmates and their families, inmates from Graham Correctional Center and Centralia Correctional Center, transporting that mail from employees in Springfield to her residence in Athens, Illinois, and destroying thousands of letters by burning them in order to destroy them so she wouldn’t have to read or respond to them,” Mettler said about an incident dating back to August of 2013. “I witnessed this first hand because I did the yard work and burned brush. Robin on one occasion put two boxes under the brush in my burn area, and when I tried to rake the pile to find out why it wouldn’t burn, I discovered the mail, and when I asked her why she was doing it, she said she had been doing it for years and there was no way to read it all, and she acknowledged she would get in trouble if anyone found out.”
Mettler advised that there is a significant problem with those on staff at PRB, both on the review board as well as those in the administrative office positions.
Disclosure contacted a staffer for governor-elect Bruce Rauner to learn if the new governor has the option of wiping out the Blagojevich and Quinn appointees on the PRB and replacing them with his own picks. The staffer had yet to contact this paper as of deadline.
Between people like Robin Miller and Eric Gregg, it’s become apparent that there are a lot of poor choices seated in well-paying positions at the state level. Whether Rauner can make a difference to the people of Illinois as regards this kind of systemic mess or not remains to be seen.