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Cubs implicated in Blagojevich scandal

By on December 9, 2008 in Independent Baseball, News

Illinois Gov. Rod Blagojevich was arrested this morning on federal corruption charges, and one of the charges concerns an alleged offer to arrange state aid for the Cubs if team owner Sam Zell fired the editorial board of the Chicago Tribune. Meanwhile, a bankruptcy filing yesterday by the Tribune Co., which owns the Cubs and Wrigley Field, may end up delaying the long-awaited sale of the team — and if nothing else it puts a cloud over the proceedings.
Illinois Gov. Rod Blagojevich was arrested this morning on federal corruption charges, and one of the charges concerns an alleged offer to arrange state aid for the Cubs if team owner Sam Zell fired the editorial board of the Chicago Tribune.

Federal officials allege several improprieties by Blagojevich and his chief of staff, John Harris, including a trade of favors in exchange for an appointment for the Senate seat vacated by President-elect Barack Obama. But the more fascinating charge is Count Two in the indictment:

Beginning no later than November 2008 to the present, in Cook County, in the Northern District of Illinois, defendants ROD R. BLAGOJEVICH and JOHN HARRIS, being agents of the State of Illinois, a State government which during a one-year period, beginning January 1, 2008 and continuing to the present, received federal benefits in excess of $10,000, corruptly solicited and demanded a thing of value, namely, the firing of certain Chicago Tribune editorial members responsible for widely-circulated editorials critical of ROD R. BLAGOJEVICH, intending to be influenced and rewarded in connection with business and transactions of the State of Illinois involving a thing of value of $5,000 or more, namely, the provision of millions of dollars in financial assistance by the State of Illinois, including through the Illinois Finance Authority, an agency of the State of Illinois, to the Tribune Company involving the Wrigley Field baseball stadium; in violation of Title 18, United States Code, Sections 666(a)(1)(B) and 2.
 

(The full criminal complaint is attached to this story; click on the link below.)

Some background. Earlier this year Tribune owner Sam Zell, with the support of several state officials, floated a plan to have the state (through the same authority that owns U.S. Cellular Field, the home of the Chicago White Sox) buy Wrigley Field directly from Zell. That effort failed after MLB put a stop to a controversial financing plan involving the long-term sale of seat rights directly to fans.

It’s the latest in a bad week for the Chicago Cubs, as the team was rocked by the decision of Zell and the Tribune Co. to see bankruptcy. Technically, the Tribune Company’s filing of bankruptcy did not includ the team, Wrigley Field and a stake in a local sports cable network, but the filing will actually affect the impending sale of the team, as a bankruptcy judge will need to sign off on the sale.

The bankruptcy filing has a mixed effect for potential buyers. On the one hand, Zell was planning to avoid capital gains taxes through some financial machinations, but those tools are now limited once the team is in bankruptcy. But it may allow the Cubs sale to be delayed: Zell was under pressure to sell the team to make a huge debt payment in coming months, a payment that will be delayed under bankruptcy. And the final bids for the team certainly reflect that, ranging from $850 million to $950 million — but coming short of the billion-dollar bids floated in the first round of bidding, which came before issues in the credit markets.

The team issued the following statement:

"The Chicago Cubs are not included in Tribune’s restructuring and the business and baseball operations of the Cubs continue independent of Tribune’s decision to restructure its debt. The sales process for the team, ballpark and related assets continues and its timetable for completion remains unchanged by today’s announcement by Tribune. It is business as usual at Wrigley Field as the Cubs continue to prepare for the 2009 season. We remain exclusively focused on our singular goal of securing a World Championship for our fans and the city of Chicago."
More from the Chicago Tribune.

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