BLOOMINGTON — Before the City Council voted unanimously in October 2005 to award Central Illinois Arena Management a 10-year contract to operate the city-owned arena, there were questions about the company's ability to be transparent.

"I do remember some controversy over a private company that is a contractor to the city and how much of their bookkeeping needed to be made public," said former Bloomington Mayor Steve Stockton, who took office in May 2005.

The concern over whether there was enough transparency to ensure arena revenues were properly accounted has taken on more significance in light of 111 criminal charges against five managers of what was then U.S. Cellular Coliseum.

The charges outlined what Bloomington city attorney Jeff Jurgens described as a “deeply complex, ongoing criminal scheme against the city” involving the managers, including the firm's owner, John Y. Butler.

"It is alarming to me, in retrospect, when an employer or contractor is accused of taking advantage of their position," said Stockton, who served two terms as mayor from 2005 to 2013.

While he can't recall specific details after more than 10 years, Stockton said he remembers "in general sometimes being very frustrated that the contract did not have enough specificity to be able to require certain information be released."

Mike Matejka, a Ward 2 alderman at the time, said he thought the city had the ability to access the facility's financial books and other documents.

“At the time of the vote, I asked the question: Will the city have access to all of the Coliseum accounts to ensure that we've got a really clear picture of what's coming in and what expenses are? And I was told those books would be open to us.”

When CIAM came back with its first financial reports Matejka said he asked if they included everything.

“Does it include food, beverage, all of the potential sales? And I was told at that time that was proprietary information,” said Matejka, who was alderman from 1989 until 2007.

“So I was dismayed and felt somewhat betrayed when I found out later that information I presumed would be accessible to city staff was proprietary and not available."

After the arena opened in March 2006, then-City Manager Tom Hamilton told The Pantagraph in October 2007 that event reports were not being released because they contained proprietary information, including the total contract amounts paid to entertainers, that the city and CIAM did not want competing venues to see.

"To have the details about a contract with a particular performer, that's between the management company and the performer," Matejka said this week.

"But to know the details of what Central Illinois Arena Management did and how they kept their own books, my expectation was that would be accessible to the city staff." 

Todd Greenburg, who was the city's lead attorney from 1990 to 2013, said that safeguard and others were in the contract that he drafted and had several outside attorneys review.

“The city had the right to examine the books and look at every scrap of paper generated by the Coliseum related to revenues and expenses,” said Greenburg.

The contract also required CIAM to file reports of its activities and finances monthly and event reports within three days after an event. 

But another provision of the contract said the parties would agree to keep secret and confidential all documents that CIAM marked as "confidential and proprietary," except as required by law. 

That meant if the city felt the information that CIAM wanted to keep confidential should be made public, it could do so under the Freedom of Information Act (FOIA), said Greenburg.

But among things FOIA exempts from public disclosure are "trade secrets or commercial or financial information (that) are furnished under a claim of that they are proprietary, privileged or confidential," and that such disclosure would cause competitive harm to the person or business providing the information.

"It was the city manager's call about whether the information that CIAM thought was proprietary should be released to the public," said Greenburg. "That is a separate issue from whether the city had access to that information. The language that I drafted gave the city the authority to get that information."

Greenburg said he does not know whether CIAM ever failed to provide the city with information required under the contract, and that no city official ever instructed him to provide CIAM with a breach-of-contract notice.

In 2016, the issue of concession sales was the focus of local blogger Diane Benjamin's lawsuit that challenged CIAM and the city for not releasing that data and other information that she asked for in a FOIA request.

In court documents, CIAM continued to contend that the public release of information about "a specific show, including ticket revenue, in-kind services provided for the event, merchandise and concession revenue" would cause the company competitive harm.

At that point, the city disagreed with CIAM's position and continued to push for voluntary release of the information, which CIAM formally agreed to do on Aug. 22, 2016 — about four months after VenuWorks took over arena management after CIAM opted to not renew its 10-year contract

"We had ambiguity and we could not get financial information that people were asking for," Mayor Tari Renner said last year. "We're now getting that information from (the city's new arena manager) VenuWorks, but in closing the books that is why, in part, this is coming to light."

Rob Fazzini, who served as Ward 8 alderman from 2011 to 2013, said he thinks Hamilton and his successor, David Hales, who took over as city manager in December 2008, didn't ask enough questions or seek more oversight of Coliseum's finances.

Hamilton could not be reached for comment.

A statement issued by the city Wednesday said Hales and other city officials are not commenting to protect the integrity of the criminal proceedings in court.

"The city’s primary focus is to ensure any potential unlawful acts, including theft from the taxpayers, are uncovered and prosecuted," the city said in the statement.

Follow Maria Nagle on Twitter: @pg_nagle



Reporter for The Pantagraph.

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