Race for Madison County Treasurer becoming fierce battle; Contenders sling accusations of misconduct and fraud

The race for Madison County Treasurer is one of the nastiest contests around.

Republican incumbent Kurt Prenzler, who blew the whistle on a predecessor's bid rigging scheme, is now getting hammered for allowing a single tax parcel sale to take place privately before the 2013 public auction.

His opponent, Democrat Marleen Suarez, has called for Prenzler to resign saying the "illegal" sale benefited friends and political allies, attorneys Don Weber and James Craney, while "subverting" the competitive bidding process, "which Mr. Prenzler has made his central accomplishment and campaign point in office,” she said.

Prenzler was first elected in 2010, succeeding Democrat Frank Miles who served as Treasurer by appointment following the resignation of Democrat Fred Bathon in 2009. Prenzler was the first one to alert federal authorities to Bathon's tax sale practices, pointing to inflated interest rates charged to distressed property owners. A federal investigation ensued and in February 2013, Bathon pleaded guilty to rigging tax sales between 2005 and 2008, in a scheme so pervasive, that nearly every property tax lien sold was sold at the statutory maximum interest rate - 18 percent. Under the scheme, tax buyers, who provided Bathon with campaign contributions, did not submit competitive bids to lower rates for distressed property owners.

Bathon is serving 30 months in federal prison. Three tax buyers associated with the scheme also pleaded guilty and are serving time.

Regarding the Weber parcel that Suarez says was illegally sold, Craney purchased the delinquent tax owed for property jointly owned by Weber and his ex-wife Virginia Weber with zero interest before the public auction on Feb. 19, 2013. The Edwardsville property is occupied by Virginia Weber.

Prenzler denies that the sale was improper, noting that it took place during regular business hours in the lobby of his office at around 12:30 p.m. He also said that a deputy treasurer met twice with assistant state’s attorney John McGuire to discuss the procedure and that McGuire did not advise against the practice.

Madison County State’s Attorney Tom Gibbons told the Belleville News-Democrat that he “took issue” with Prenzler’s statement that his office condoned the single parcel sale.

Prenzler contends that single parcel sales - for buyers interested and registered to only purchase a single parcel - have been a "long-standing" tradition preceding annual tax sales in Madison County and other counties. He said single buyers are often family members or friends of people who are not able to pay their taxes.

Prenzler also said that single buyers cannot be employees of the county or relatives of employees. He said that Craney is neither.

"My opponent’s accusations reveal her inexperience and lack of understanding of the treasurer’s office and its history," Prenzler said. "Permitting single buyers to purchase taxes at zero percent on single parcels is a long-standing tradition in Madison County and other counties in the state. In Madison County, every past treasurer that we know of, including now-Congressman John Shimkus, Bill Ayres, Fred Bathon and Frank Miles, began their tax sales with a sales to single parcel buyers."

Yet, Suarez claims that Prenzler violated a statute that was specifically enacted in January 2013 to remedy Bathon-type bid rigging.

She says that Prenzler’s actions may constitute official misconduct under a state statute - a Class 3 felony, because she claims he performed a "private" sale and did a "favor for a political friend who benefited from a zero percent tax sale."

In connection with Suarez's accusations, Madison County Board Member Kelly Tracy on Wednesday filed a complaint with the Madison County State’s Attorney office.

Prenzler said there is "nothing" to Suarez's accusations.

"This is a political witch hunt," he said.

"I’m the one who blew whistle on Fred Bathon’s criminal tax sales, and as the result Fred Bathon is in prison. I’m the only independent voice in the county administration building.

"...The Democrat machine is frantic to get me out of here, so they can get back to business as usual."

While Suarez hurled accusations against Prenzler at a Wednesday press conference, Prenzler held one on Thursday saying Suarez profited as a "Chemetco insider," a bankrupt copper smelter in Hartford and one of the worst polluters ever in Madison County. Prenzler also says Chemetco still owes the Treasurer’s office $388,000.

It prompted a strong response from Suarez who said, "The implication that I am an insider is far-fetched and absurd." She said "insider" is a legal term used in bankruptcy proceedings.

She said that Prenzler was "grasping at straws."

"This is another feeble attempt to deflect attention away from his own illegal and unethical behavior," she said.

 

According to federal court documents, Daniel Suarez, husband Marleen Suarez, settled a fraud claim in bankruptcy court for $110,603, but succeeded in clearing her name.

A settlement that Daniel Suarez and bankruptcy trustee Laura Grandy reached in 2005 included a provision dismissing Marleen Suarez from a complaint that originally named husband and wife.

Grandy, who is now bankruptcy judge, alleged in 2003 that they improperly received $89,595.99 from Chemetco that belonged to Daniel’s cousin, John Suarez.

Grandy wrote that Chemetco was insolvent when it made transfers to Daniel and Marleen Suarez, or that it made the transfers to delay collection of claims or defraud its creditors.

“The transfers were made without consideration and without receiving a reasonably equivalent value in exchange for said transfers," Grandy wrote.

She pressed a similar charge against B. Garcia Trucking Inc., a business Daniel Suarez owns.

She separately declared Daniel Suarez liable as an active participant in a slag supply contract between Chemetco and another of his cousin’s businesses, PAR Services Inc.

“The transaction was not an arm’s length transaction as all of the benefits and profits of the contract passed to PAR Services Inc., while PAR Services Inc. added no value to the contract,” she wrote.

Grandy called for an accounting of slag transactions back to 1994.

Chemetco filed a bankruptcy petition in 2001, after federal regulators filed a pollution suit.

In 2003, Grandy filed 30 adversary proceedings against parties that dealt with Chemetco.

She alleged improper transfers not only against Daniel and Marleen Suarez but also against John Suarez, Mary Lee Suarez, Alexis Suarez, and Toben Suarez.

In 2004, suspicious of the apparent transfers, she demanded proof of Chemetco’s insolvency.

Bankruptcy judge Kenneth Meyers set two trials, one on insolvency and one on all other matters.

In 2005, Grandy asked Meyers to require responses to discovery requests.

She wrote that she scheduled examinations of former Chemetco employees, and several of them indicated they would assert Fifth Amendment privilege against self incrimination.

On the date when the insolvency trial would have started, Grandy announced a settlement.

She wrote that Par Transportation consented to a judgment of $2,044,851.21, and that it waived any claim against Chemetco’s estate.

She wrote that, John Suarez, Par Services, and 11 other parties jointly offered $650,000.

“In reaching this settlement, no finding of fraud or breach of fiduciary duty was made,” she wrote.

She wrote that Daniel Suarez, B. Garcia Trucking Company, A-Z Lawn Care, and Bob Lotz agreed to pay $110,603. She wrote that they could file claims against the estate up to that amount.

“The trustee further agreed, subject to court approval, to dismiss the complaint as to Marleen Suarez, with prejudice,” she wrote.

In response, candidate Suarez said that she and her husband have never had any ownership or fiduciary relationship to Chemetco, and neither has any business they own.

She said that the fact that Chemetco owes back taxes "is not related to me."

"Chemetco was owned by a man with the same last name as my husband," she said.  "He is a distant cousin with no ongoing relationship to our family. I have never been involved in Chemetco in any way."

Read Suarez's Chemetco statement here.

Read Prenzler's tax sale statement here.