McHenry County Blog

A press release from the U.S. Attorney’s Office:

SUBURBAN CHICAGO WOMAN SENTENCED TO FOUR YEARS IN PRISON FOR STEALING MOTOROLA TRADE SECRETS BEFORE BOARDING PLANE FOR CHINA

CHICAGO — A former software engineer for Motorola, Inc., now Motorola Solutions, Inc., a telecommunications company based in suburban Schaumburg, was sentenced today to four years in federal prison for stealing Motorola trade secrets relating to its proprietary iDEN technology.

The defendant, HANJUAN JIN, a naturalized U.S. citizen born in China, was secretly working for a Chinese company that developed telecommunications technology for the Chinese military when she was stopped by U.S. customs officials at O’Hare International Airport from traveling on a one-way ticket to China in February 2007.

Customs officials seized more than 1,000 electronic and paper Motorola documents found in Jin’s possession as she attempted to leave the country.

Jin, 41, of Aurora and formerly of Schaumburg, a nine-year Motorola software engineer, conducted a “purposeful raid to steal technology,” U.S. District Judge Ruben Castillo said in imposing the sentence in Federal Court in Chicago.

Jin was fined $20,000 and ordered to remain on home confinement with electronic monitoring until beginning her sentence on Oct. 25, 2012.

Jin was convicted of three counts of theft of trade secrets in a Feb. 8, 2012, ruling by Judge Castillo following a five-day bench trial in November 2011.

In a 77-page opinion, Judge Castillo found her not guilty of three counts of economic espionage for the benefit of the People’s Republic of China and its military.

At sentencing, however, Judge Castillo found by a preponderance of the evidence, that Jin “was willing to betray her naturalized country.”

Jin’s work for a Chinese telecommunications company and its Chinese military projects “demonstrates a lack of loyalty to the United States as well as Motorola.

It is clear that [Jin] knew that she would be dedicating her education, talents and experience to the betterment of the Chinese military.

“To better serve this effort, she opted to steal technology that she had access to at Motorola,” prosecutors argued in a sentencing document.

Prosecutors argued that Motorola had invested hundreds of millions of dollars in its iDEN push-to-talk technology, which, in turn, provided the company with hundreds of millions of dollars in revenue.

“This sentence reinforces the message that federal courts view the theft of trade secrets as a serious crime that warrants significant punishment,” said Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois.

“We will do everything we can to guard our economic and national security from the theft of American trade secrets, and this case shows that we can work with victim corporations to protect the trade secrets involved,” he added. Mr. Shapiro announced the sentence with William C. Monroe, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The U.S. Customs and Border Protection Service played a key role in the investigation.

According to the evidence, Jin began working for Motorola in 1998 and took a medical leave of absence in February 2006.

While on sick leave in 2006 and secretly from Motorola, Jin pursued employment in China with Sun Kaisens, the Chinese telecommunications company that developed products for the Chinese military.

Between November 2006 and February 2007, Jin returned to China and worked for Sun Kaisens on projects for the Chinese military.

During this same period of time, she was given classified Chinese military documents by Sun Kaisens to review in order to better assist with the Chinese military projects. After receiving these documents, Jin agreed to review the documents and provide assistance.

On Feb. 15, 2007, Jin returned to the United States from China.

On Feb. 22, 2007, just two days after she became a naturalized U.S. citizen, Jin reserved a one-way ticket to China for a flight scheduled to depart on Feb. 28, 2007.

The following day, on Feb. 23, 2007, Jin advised Motorola that she was ready to end her medical leave and return to work at Motorola, without advising that she planned to return to China to work for Sun Kaisens.

On Feb. 26, 2007, Jin returned to Motorola, purportedly to resume full-time work, and was given no assignments by her supervisor.

Between 9 a.m. and 2 p.m., Jin accessed more than 200 technical documents belonging to Motorola on its secure internal computer network.

At about 9 p.m. that night, Jin returned to Motorola and downloaded additional documents.

At approximately 12:15 a.m. on Feb. 27, 2007, Jin was recorded twice leaving a Motorola building with hard copy documents and other materials.

During the day on Feb. 27, 2007, Jin sent an email to her manager in which she appeared to volunteer for a layoff at Motorola.

At about 10 p.m. that night, she returned to Motorola’s offices and downloaded numerous additional technical documents.

Jin was later recorded leaving a Motorola building with what appeared to be a laptop computer bag.

As she attempted to depart from O’Hare bound for China on Feb. 28, 2007, authorities seized numerous materials, some of which were marked confidential and proprietary belonging to Motorola.

Some of the documents provided a detailed description of how Motorola provides a specific communication feature that Motorola incorporates into its telecommunications products sold throughout the world.

At the same time, authorities recovered multiple classified Chinese military documents written in the Chinese language that described certain telecommunication projects for the Chinese military.

Many of these documents were marked “secret” by the Chinese military.

Authorities also recovered approximately $30,000 in U.S. currency that was in six different envelopes, each containing $5,000, all in hundred dollar bills.

The Government is being represented by Assistant U.S. Attorneys Steven Dollear, Sharon Fairley, and Christopher Stetler.

The big news out of the Tampa’s Methodist convention

• for friends of Israel and
• for those who know the impact of Motorola and Caterpillar on the Illinois economy

is the overwhelming defeat of liberal efforts to force Methodist investments out of those and other companies doing business with Israel.

The Institute of Religion and Democracy leads with that outcome of the meeting in its May 2nd report:

Good News! Despite massive lobbying by dozens of yellow shirted anti-Israel activists, the United Methodist General Conference decisively rejected anti-Israel divestment today by 685 to 246.

Sometimes the debate language was ugly.

One Western [West Coast U.S.] Jurisdiction delegate likened United Methodist policy to supporting firms helping Nazi Germany conduct the Holocaust.

So much for temperate argument.

But good sense prevailed in the final vote.

Here’s Jeff Walton’s report on yesterday’s rally for anti-Israel divestment featuring a United Methodist missionary claim he was more “conservative” than Billy Graham even as he speechified in the gay advocacy rally tent.

Debates over marriage, sexual ethics and homosexuality are expected tomorrow. Here’s Bart Gingerich’s report on a speech touting “queer people” here by radical theologian James Cone of Union Seminary.

And here’s a report from Jeff Walton about a “Church Within a Church” event for gay clergy who have unofficial ordinations.

Bart Gingerich blogged about hyper political correctness at General Conference.

But overall, the news here is mostly good.

United Methodism is slowly moving away from dying North American liberal Protestantism and towards growing, biblical Global South Christianity.

In the church restructuring approved today, overseas churches’ representation on church agency boards will increase from 10 percent to over 30 percent, more in line with their membership.

Long overdue!

Please keep praying, especially tomorrow.

With appreciation,

Mark Tooley
IRD President
Director, UMAction

P.S.: Please stand with us with a special online donation today, easily made here. We rely on you!

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Below is what the group Good News is reporting:

The 2012 General Conference of The United Methodist Church has been slowly dealing with legislative issues under the watchful eye of silent protesters.

As time is quickly slipping away, delegates are feeling the pressure to make the next several days really count since so many of the big-ticket issues have not been dealt with.

We have been hosting our Briefing Breakfasts every morning this week for the delegates, monitoring the legislation on the floor of the General Conference, and distributing our daily newsletter [newsletters are here] outside the convention center.

If you are watching the General Conference via live streaming and want to see a legislation tracking guide of issues of interest to the Renewal and Reform Coalition, click HERE.

The big agenda today is supposed to be the new Restructure Proposal called PlanUMC. You can read it HERE

Some of the actions that warrant your attention:

• Delegates voted to end the guaranteed appointment of United Methodist elders. To learn more, click HERE.
• Delegates decided not to approve a petition that would have created a new full-time role for the president of the United Methodist Council of Bishops. To learn more, click HERE.
• Delegates revised the Social Principles statement on abortion to say, “We mourn and are committed to the diminishment of high abortion rates.”
• Churches are encouraged to provide “age-appropriate sexuality education, advocacy in regard to contraception, and support of initiatives that enhance the quality of life for all women and girls around the globe.”
• Churches are also encouraged to support “crisis pregnancy centers and pregnancy resource centers that compassionately help women explore all options related to unplanned pregnancy.”
• Delegates opposed, 407 to 383, a longer preamble proposed for the Social Principles by a legislative committee. They agreed with a minority report that affirms “our unity in Jesus Christ while acknowledging differences in applying our faith in different cultural contexts as we live out the gospel.”
• Voting 532 to 414, delegates in a May 1 plenary session added a clause, “We stand united in declaring our faith that God’s grace is available to all — that nothing can separate us from the love of God in Christ Jesus.”
• Delegates created an additional episcopal area in the Congo Central Conference, increasing the number of bishops in the area from three to four.
• Delegates celebrated an April 30 decision to enter into full communion with the African Methodist Episcopal Church, the African Methodist Episcopal Zion Church, the Christian Methodist Episcopal Church, the African Union Methodist Protestant Church and the Union American Methodist Episcopal Church. To learn more, click HERE.

We covet your prayers for our United Methodist Church.

If you would like to receive an introductory issue of Good News free of charge, please request it at info@goodnewsmag.org.

Thank You

Thank you for your prayers and the financial support that sustain this ministry. Your support and participation make it possible for Good News to be your advocate for Scriptural Christianity within the United Methodist Church and beyond.

If you would like to subscribe to Perspective, click HERE.

If you would like to support the work of Good News with an online gift, click HERE

If you would like to be a part of Good News’ prayer ministry and receive monthly prayer updates, please email Ginny@goodnewsmag.org

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The Confessing Movement reports some of the same information, but with a different viewpoint, as well as additional happenings on May 2nd:

Wednesday, May 2 – Day 8 of General Conference

Update (9:30 pm):

The gay, lesbian, transgender, bisexual groups and their supporters have been here from the beginning of General Conference.

They have engaged in numerous actions such as walking around the area designated for delegates and conference officials only holding signs, handing out pro gay materials and lining up so delegates must walk through their silence demonstrations but they had not violated the General Conference rules.

At about 5:30 today as the delegates were going to break for dinner, the demonstrators entered the restricted area violating General Conference rules.

The conference agenda for tomorrow morning is scheduled to deal with sexuality issues including the practice of homosexuality.

JUST IN (12:35 pm) After 3 hours of debate, restructuring for The United Methodist Church has passed with a vote of 567 in favor (59.6%) to 384 against.

The pace of General Conference thus far has been very slow.

The agenda includes many items and activities that keep petitions from getting considered.

At previous General Conferences this has also occurred, forcing many important issues to the end when there is little time for discussion and debate. 
The proposal to require restructuring of the general church is scheduled to occur today. After hours of committee discussion and work outside of the committee a compromise has been reached with one proposal being presented rather than a major and minor report.

The debate on restructuring began about 9:30 this morning. A motion to refer this report for action in 2016 was defeated with 555 delegates voting against this proposal to kill restructuring this year.

Other important developments include:

1. The United Methodist Women (UMW) petition to become an autonomous organization passed by an overwhelming vote, 889 to 20. This means the UMW will no longer be a division within the General Board of Global Ministries but will be a stand-alone autonomous agency. There appear to be a number of reasons for the desire to be autonomous. The UMW has been subsidizing the World Division and the National Division for a number of years and this has become more difficult since giving is down for UMW. Furthermore, it was uncertain what restructuring would do with UMW. At the moment UMW selects one third of the board and this would change in restructuring. For its part, many in Board of Global Ministries think the UMW has had too much dominance (since it selects so much of the board) and that the board might be more effective if UMW were independent. As part of the change the Deaconess and Home Missions Program, which were part of the board, will be moved to the jurisdiction of UMW.
2. 

   In Illinois, the Chicago Tribune reports May 2, 2012, there are 314,461 Methodists as of 2010. During the decade, the church lost 50,721 members in Illinois. That's almost 14%. The Northern Illinois Conference is under the control of some of the most liberal Methodists in the world.

   The final budget has not yet been set for the General Church (it is usually the last agenda item) but the General Council of Finance and Administration (GCFA) is recommending a 6.04% reduction [emphasis added]. This is the first General Conference in recent times that has recommended a reduction. The question still to be answered: how will the monies in the budget be divided up? Boards and agencies have already needed to cut back on staff. In 1971 there was a total of 3,139 staff serving general agencies. By 2010 this number had been reduced to 1,384.

3. The General Conference referred to the Commission on the Status and Role of Women a petition that would amend Article IV of the Constitution on “Inclusiveness.” The petition, submitted by the Status and Role of Women would have added “gender” and “age” to the categories that are welcomed into United Methodist Churches. The additional words were unnecessary in the minds of many of the delegates. Referral basically kills the petition. Another petition on the paragraph wanted to add sexual orientation, gender choice, and gender identity to the category of persons needed to be included. This petition failed.
4. By a vote of 879 to 25 the General Conference voted to enter into full communion with five predominately black Methodist denominations: Africans Methodist Episcopal, African Methodist Episcopal Zion, African Union Methodist Protestant, Christian Methodist Episcopal, and Union African Episcopal Church. Each of the denominations will recognize each other as part of the one true apostolic faith, recognize the authenticity of each other’s sacraments, recognize the ordination of each denomination, and enter into cooperative ministry where possible. A service of celebration and recognition was held in the afternoon of May 1. At one time there was some talk of merger but the other denominations would not favor that.
5. Five more resolutions have been passed to bulk up the Book of Resolutions, which is already 1048 pages long. A number of others are recommended for passage but have not yet made it to the floor. One of these is on “Just War” which, if passed, would move the United Methodist from a pacifist position (presently no support for any war). The Publishing House has indicated the Book of Resolutions is so big that it would cost $70,000 to translate it per language and that would not include printing costs. Only 21,000 copies of the book sold after the 2008 General Conference and this is supposed to be a an important book on United Methodist positions. Only 32% of UM pastors feel they understand it.

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Other articles that may be of interest:

• 4/24/12 Methodist Convention This Week in Tampa – Unity Not on the Agenda
• 4/27/12 The Disconnect Between American Liberals and Africans in Tampa’s Methodist Convention
• 4/28/12 Conservative Methodists Making Headway in World Conference, Big Fight on Homosexuality in Offing
• 4/29/12 Update from United Methodist Church General Conference in Tampa – Conservatives Winning Most Votes, Setbacks for Abortion & Israeli Divestment Supporters
• 4/30/12 Good News Reports Most Endorsed Candidates for Methodist “Supreme Court,” University Senate Win
• 4/30/12 Conservatives Take Three of Four Vacancies on Methodist Judicial Council, Vote on Homosexuality Imminent
• 5/2/12 Methodists Vote Almost 3-1 Against Ending Investments (Divestment) in Motorola and CAT, Proportional Representation for Africans on Ruling Bodies, Preacher Tenure Ended
• 5/3/12 53% Reject Homosexual Liberalization at Tampa World Methodist Conference
• 5/3/12 Homosexuals Take over Methodist Tampa Convention Floor after Losing Vote
• 5/4/12 Coverage of Conservative Methodists’ Victory over Homosexual Activists Missing in Newspapers

 

A press release from the U.S. Attorney’s Office:

SUBURBAN CHICAGO WOMAN CONVICTED OF STEALING TRADE SECRETS FROM MOTOROLA BEFORE ATTEMPTING TO TRAVEL TO CHINA

CHICAGO — A former software engineer for Motorola, Inc., now Motorola Solutions, Inc., a telecommunications company based in Schaumburg, was found guilty today of stealing Motorola trade secrets.

The defendant, Hanjuan Jin, a naturalized U.S. citizen born in China, possessed more than 1,000 electronic and paper Motorola proprietary documents when she was stopped by U.S. customs officials as she attempted to travel on a one-way ticket to China in February 2007.

The documents were later seized by U.S. customs officials at O’Hare International Airport.

Jin, 41, of Aurora and formerly of Schaumburg, was found guilty by U.S. District Judge Ruben Castillo following a five-day bench trial from Nov. 7 to 15, 2011.

Jin “criminally betrayed Motorola by stealing its trade secrets,” Judge Castillo said in finding her guilty of three counts of theft of trade secrets.

In a 77-page opinion, Judge Castillo found her not guilty of three counts of economic espionage for the benefit of the People’s Republic of China and its military. She faces a maximum penalty of 10 years in prison on each count of stealing trade secrets.

Jin was ordered to remain in home confinement with electronic monitoring pending sentencing, which was scheduled for April 18 in Federal Court. The government is seeking forfeiture of assorted computer hardware and equipment that Jin possessed in February 2007, which contained a variety of Motorola’s proprietary information.

“The verdict establishes that Jin stole valuable trade secrets from an American company, and we will do everything we can to guard our economic and national security from the theft of American trade secrets.

“This case is a successful example of how we can work with victim corporations to prosecute these cases while protecting the trade secrets involved,” said Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, who announced the verdict with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

According to the evidence at trial, Jin began working for Motorola in 1998, and she took a medical leave of absence in February 2006.

Between June and November 2006, while still on sick leave, Jin pursued employment in China with Sun Kaisens, a Chinese telecommunications company that developed products for the Chinese military.

Between November 2006 and February 2007, Jin returned to China and did work for Sun Kaisens on projects for the Chinese military.

During this same period of time, Jin was given classified Chinese military documents by a Sun Kaisens employee to review in order to better assist with the Chinese military projects.

After receiving these documents, Jin agreed to review the documents and provide assistance.

On Feb. 15, 2007, Jin returned to the United States from China.

On Feb. 22, 2007, Jin reserved a one-way ticket to China for a flight scheduled to depart on Feb. 28, 2007.

The following day, on Feb. 23, 2007, Jin advised Motorola that she was ready to end her medical leave and return to work at Motorola, without advising that she planned to return to China to work for Sun Kaisens.

On Feb. 26, 2007, Jin returned to Motorola, purportedly to resume full-time work, and was given no assignments by her supervisor.

Between 9 a.m. and 2 p.m., Jin accessed more than 200 technical documents belonging to Motorola on its secure internal computer network.

At about 9 p.m. that night, Jin returned to Motorola and downloaded additional documents.

At approximately 12:15 a.m. on Feb. 27, 2007, Jin was recorded twice leaving a Motorola building with hard copy documents and other materials.

During the day on Feb. 27, 2007, Jin sent an email to her manager in which she appeared to volunteer for a layoff at Motorola.

At about 10 p.m. that night, she returned to Motorola’s offices and downloaded numerous additional technical documents.

Jin was later recorded leaving a Motorola building with what appeared to be a laptop computer bag.

As she attempted to depart on Feb. 28, 2007, from O’Hare bound for China, authorities seized numerous materials, some of which were marked confidential and proprietary belonging to Motorola.

Some of the documents provided a detailed description of how Motorola provides a specific communication feature that Motorola incorporates into its telecommunications products sold throughout the world.

At the same time, authorities recovered multiple classified Chinese military documents written in the Chinese language that described certain telecommunication projects for the Chinese military.

Many of these documents were marked “secret” by the Chinese military.

Authorities also recovered approximately $30,000 in U.S. currency that was in six different envelopes, each containing $5,000, all in hundred dollar bills.

The Government is being represented by Assistant U.S. Attorneys Steven Dollear, Sharon Fairley, and Christopher Stetler.

That was Thursday’s Chicago Tribune’s headline for an article on the Motorola complex in Harvard.

Then, later yesterday, the Northwest Herald announced that the campus had been sold.

No buyer was named at first.

But, later, Miami-based Optma International was identified by reporter Kelly Mahoney as the purchaser.

The story quotes the Cleveland Plain Dealer about Optima:

“Optima International is the U.S. branch of a private, global company heavily invested in oil, gas, telecommunications and manufacturing in Eastern Europe.”

John Blanchard’s NASA Education tried to line up financing to buy the building. He envisioned making it a place homeless veterans could live, maybe enough to justify a Veterans Department medical clinic. But apparently he could not line up sufficient financing.

That use could have brought big income bucks from state government to the city’s coffers.

Now, I guess they will have to be satisfied with real estate taxes. Hard to imagine its being turned into a big shopping mall that would generate sales taxes.

Current owners American Assets paid Motorola $14 million for the property in 2005, the NW Herald reports.

State government kicked in $35 million, if memory serves me correctly. Daily Herald reporter Lenore Adkins writes the building originally cost $100 million to build in 1997.

The Northwest Herald reported on its web site Friday that the building sold for $16.7 million.

That was Thursday’s Chicago Tribune’s headline for an article on the Motorola complex in Harvard.

Then, later yesterday, the Northwest Herald announced that the campus had been sold.

No buyer was named at first.

But, later, Miami-based Optma International was identified by reporter Kelly Mahoney as the purchaser.

The story quotes the Cleveland Plain Dealer about Optima:

“Optima International is the U.S. branch of a private, global company heavily invested in oil, gas, telecommunications and manufacturing in Eastern Europe.”

John Blanchard’s NASA Education tried to line up financing to buy the building. He envisioned making it a place homeless veterans could live, maybe enough to justify a Veterans Department medical clinic. But apparently he could not line up sufficient financing.

That use could have brought big income bucks from state government to the city’s coffers.

Now, I guess they will have to be satisfied with real estate taxes. Hard to imagine its being turned into a big shopping mall that would generate sales taxes.

Current owners American Assets paid Motorola $14 million for the property in 2005, the NW Herald reports.

State government kicked in $35 million, if memory serves me correctly. Daily Herald reporter Lenore Adkins writes the building originally cost $100 million to build in 1997.

The Northwest Herald reported on its web site Friday that the building sold for $16.7 million.

McHenry’s Steve Stanek shared two email attempts to persuade the Northwest Herald to provide balanced coverage on McHenry County College’s attempt to put a baseball stadium in Crystal Lake.

In the first, sent on November 21st, Stanek finds an issue paper written by MCC consultant Economics Research Associates. At the last board meeting, ERA tried to expand its role from 3rd party reviewer to baseball stadium promoter. The email is to Group Editor Chris Krug.

Mr. Krug:

This is from the March 19, 2006 Boston Globe article on the foolishness of sports facilities subsidies to which I sent you a link last week:

ACCORDING TO [Vanderbilt University economist John] Siegfried, there’s a remarkable agreement on these points. In economics, he says, ”with most empirical issues there’s lots of debate. Does the minimum wage cause unemployment? There’s lots of debate about that issue. Here there’s no debate.” Even the consulting firm ERA put out an issue paper, back in 1995, cautioning against ”over- blown claims of the economic value of major league sports teams” and concluding that, ”Compared with more traditional public investments of scarce economic development dollars. . .sports facilities are a rather poor investment.”

First note that we have a Vanderbilt University economist saying “there’s no debate” on the public funding of sports facilities. The overwhelming consensus of liberal, conservative and libertarian economists and public policy researchers is that public funding of sports facilities is terrible economic and public policy.

Second, note that we have Economics Research Associates (MCC’s consultant) acknowledg- ing sports facilities are a poor investment of public funds. Yet according to your own newspaper, the ERA rep a few days ago apparently tried to suggest to the MCC board ways to save the sports stadium (no doubt in hopes of collecting a fee). ERA is engaging in “rent seeking,” as is Mark Houser and his baseball stadium associates.

Rent seeking is the term economists use to describe businesses, groups and individuals who use government to give themselves certain advantages. (Here is a good definition for you from Auburn University.) This can happen through government contracts, direct subsidies, regulations that hinder competitors or hurt consumers, etc.

They often cast their rent seeking in t erms of “public-private partnership” or some such thing, but the main aim is to get government to give them advantages and assume risks.

Public benefit is often the excuse that is used to justify rent seeking, even in the face of clear evidence that the rent seekers’ private gain will come at the public’s expense (through higher taxes, higher prices for goods and services, slower economic growth in other areas, etc.).

Businesspeople who engage in rent seeking, and government officials who aid them, often call it “economic development.” They do this even though economists overwhelmingly conclude there likely will be no net economic gain, as in the case of subsidized sports facilities.

Motorola in the mid-1990s engaged in rent seeking, receiving taxpayer “incentives” worth well over $50 million (in inflation-adjusted dollars) for the cell phone plant in Harvard. (This does not include several million dollars of road work done at Motorola’s request after the plant opened.) Have those incentives created the promised number of jobs? Generated the promised tax revenues? Sparked the promised ancillary development? No, no, and no.

Given this sorry record and the cheerleading the Northwest Herald did for the Motorola plant subsidies, I would expect the newspaper to be more circumspect about this whole stadium/entertainment issue.

Maybe it would help to bar executives at your newspaper from serving on the board of the county’s economic development corporation. This way perhaps the newspaper would take a more clear-eyed and balanced look at such issues.

Regards,

Steve Stanek

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Northwest Herald Group Editor Chris Krug is seen top left.

Economics Research Associates spokesman Richard Starr is seen trying to tie a baseball stadium into McHenry County College’s mission statement, which is etched in the glass panel. Earlier his firm submitted a devastating 3rd party review of the Equity One feasibility study.

At the bottom are two views of the now underutilized Motorola campus in Harvard. In the bottom photo, note that the driveway was blocked by gates when I took this photograph in early October of 2006.

McHenry’s Steve Stanek shared two email attempts to persuade the Northwest Herald to provide balanced coverage on McHenry County College’s attempt to put a baseball stadium in Crystal Lake.

In the first, sent on November 21st, Stanek finds an issue paper written by MCC consultant Economics Research Associates. At the last board meeting, ERA tried to expand its role from 3rd party reviewer to baseball stadium promoter. The email is to Group Editor Chris Krug.

Mr. Krug:

This is from the March 19, 2006 Boston Globe article on the foolishness of sports facilities subsidies to which I sent you a link last week:

ACCORDING TO [Vanderbilt University economist John] Siegfried, there’s a remarkable agreement on these points. In economics, he says, ”with most empirical issues there’s lots of debate. Does the minimum wage cause unemployment? There’s lots of debate about that issue. Here there’s no debate.” Even the consulting firm ERA put out an issue paper, back in 1995, cautioning against ”over- blown claims of the economic value of major league sports teams” and concluding that, ”Compared with more traditional public investments of scarce economic development dollars. . .sports facilities are a rather poor investment.”

First note that we have a Vanderbilt University economist saying “there’s no debate” on the public funding of sports facilities. The overwhelming consensus of liberal, conservative and libertarian economists and public policy researchers is that public funding of sports facilities is terrible economic and public policy.

Second, note that we have Economics Research Associates (MCC’s consultant) acknowledg- ing sports facilities are a poor investment of public funds. Yet according to your own newspaper, the ERA rep a few days ago apparently tried to suggest to the MCC board ways to save the sports stadium (no doubt in hopes of collecting a fee). ERA is engaging in “rent seeking,” as is Mark Houser and his baseball stadium associates.

Rent seeking is the term economists use to describe businesses, groups and individuals who use government to give themselves certain advantages. (Here is a good definition for you from Auburn University.) This can happen through government contracts, direct subsidies, regulations that hinder competitors or hurt consumers, etc.

They often cast their rent seeking in t erms of “public-private partnership” or some such thing, but the main aim is to get government to give them advantages and assume risks.

Public benefit is often the excuse that is used to justify rent seeking, even in the face of clear evidence that the rent seekers’ private gain will come at the public’s expense (through higher taxes, higher prices for goods and services, slower economic growth in other areas, etc.).

Businesspeople who engage in rent seeking, and government officials who aid them, often call it “economic development.” They do this even though economists overwhelmingly conclude there likely will be no net economic gain, as in the case of subsidized sports facilities.

Motorola in the mid-1990s engaged in rent seeking, receiving taxpayer “incentives” worth well over $50 million (in inflation-adjusted dollars) for the cell phone plant in Harvard. (This does not include several million dollars of road work done at Motorola’s request after the plant opened.) Have those incentives created the promised number of jobs? Generated the promised tax revenues? Sparked the promised ancillary development? No, no, and no.

Given this sorry record and the cheerleading the Northwest Herald did for the Motorola plant subsidies, I would expect the newspaper to be more circumspect about this whole stadium/entertainment issue.

Maybe it would help to bar executives at your newspaper from serving on the board of the county’s economic development corporation. This way perhaps the newspaper would take a more clear-eyed and balanced look at such issues.

Regards,

Steve Stanek

= = = = =

Northwest Herald Group Editor Chris Krug is seen top left.

Economics Research Associates spokesman Richard Starr is seen trying to tie a baseball stadium into McHenry County College’s mission statement, which is etched in the glass panel. Earlier his firm submitted a devastating 3rd party review of the Equity One feasibility study.

At the bottom are two views of the now underutilized Motorola campus in Harvard. In the bottom photo, note that the driveway was blocked by gates when I took this photograph in early October of 2006.