Contractor Challenges Illinois Campaign-Finance Law

CHICAGO (CN) – An Illinois anti-corruption law prohibiting government contractors from making campaign contributions is being challenged as unconstitutional after a public housing management firm lost a contract because its founder made contributions to Democratic gubernatorial candidates.

The Habitat Company is a Chicago-based real estate firm that manages approximately 22,000 units in the city, including 5,000 public housing units.

The company is no stranger to winning government contracts – from 1987 to 2013, it served as the court-appointed receiver for the Chicago Housing Authority, exercising the authority’s powers to develop thousands of new mixed-income housing to replace the city’s demolished high-rises that became infamous for crime and violence.

Since 2010, Habitat has managed a building called Lake Shore Plaza, a mixed-income building with 20 percent of its units reserved for low-income, Section 8 tenants.

Last year, Habitat was again awarded the one-year management contract for Lake Shore Plaza for 2019.

But on Dec. 28, 2018, Ellen Daley, Illinois’ chief procurement officer for general services, notified the company that its founder Daniel Levin’s campaign contributions to Democratic gubernatorial candidates in 2018 violated the Illinois Procurement Code and required voiding the 2019 management contract.

Habitat and Levin, represented by Edward Feldman with Miller Shakman & Beem, sued in Chicago federal court on Friday to challenge Daley’s decision and the Illinois law banning government contractors or affiliated persons from making any contribution to a political committee of the officeholder responsible for awarding their contracts.

“Daley’s decision to void the 2019 contract is arbitrary, capricious and, if allowed, would violate plaintiffs’ First and Fourteenth Amendment rights,” the complaint states.

Levin made five contributions to Democratic gubernational candidate Chris Kennedy, and one contribution to Democratic gubernatorial nominee J.B. Pritzker in 2018.

But neither Kennedy or Pritzker had any authority over awarding the Lake Shore Plaza contract to Habitat because the company won the contract during Governor Bruce Rauner’s Republican administration. In fact, the contributions were made to candidates who ran against Rauner, who lost to Pritzker in November.

“Defendants’ decision to void the 2019 contract infringes on Levin’s First Amendment rights of speech and association, and chills him and other Illinoisans from exercising their right to contributing to candidates of their choosing,” the lawsuit states. “Additionally, the decision deprives Habitat of property without due process of law in that, inter alia, it vests unfettered discretion in a chief procurement officer to void contracts without any rational relationship to a legitimate state interest.”

Habitat seeks a temporary restraining order and a preliminary injunction to void Daley’s decision and prevent the Illinois Housing Development Authority, which owns Lake Shore Plaza, from entering into a property management contract with another company.

The state housing authority did not respond Friday afternoon to a request for comment.

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