P. Nicholas Hurtgen, who helped oversee selection of bond firms as a state official, now is managing director for municipal finance at Bear Stearns' Chicago office. He and another Bear Stearns executive have helped organize Thompson's Chicago fund-raisers. Hurtgen declined an interview. Merrill Lynch employees also have given big to Thompson and done well with securing state bonding business. Selection of firms is ratified by the state Building Commission, which invariably approves the recommendations of the Department of Administration.
Critics charge that the shift opens the system to favoritism.
But Frank Hoadley, state capital finance director, said the shift to negotiated sales was due to more complex deals. He said the result has been better prices for the state. It also has provided more flexibility for the state. A recent state audit praised the prices the state has gotten on its bond sales, but raised questions about whether the negotiated method was being overused. In dismissing suggestions that state aid is dangled as a lure for campaign donations, Thompson campaign advisers said they don't target donors.