Big donors get front row seats at tax sales

News-DemocratJanuary 2, 2011 

BELLEVILLE — When it comes to St. Clair County sales of delinquent property taxes, the county’s biggest tax buyers — based on how much money each spends per year on the purchase of late taxes — get the best seats in the house, just inches from the auctioneer.

It’s based on a seating chart system set up and enforced by the staff of Treasurer Charles Suarez, who oversees tax sales held in the County Board meeting room at the St. Clair County Building.

And in a verbal bidding system based on the haste with which buyers can shout out their bids, where you sit can make all the difference.

Just ask Ken Brosh, a part-time tax buyer from Mascoutah.

“There is no question I’ve seen other people get their bid in faster, louder,” Brosh said. “Nope, it always goes to the front row participants. … There’s no question that front row people clean up.”

Those “front row” people comprise a Who’s Who of Illinois tax buyers: John Vassen, of Belleville; Scott McLean, of East St. Louis; Dennis Ballinger, of Decatur; John Sieron, of East St. Louis; and Barrett Rochman, of Carbondale, according to a copy of the seating chart for November’s tax sales, which Suarez provided at the News-Democrat’s request.

The seating chart is based on campaign donations, Brosh said.

“There is no question I’ve seen other people get their bid in faster, louder,” Brosh said. “Nope, it always goes to the front row participants. … There’s no question that front row people clean up.”

Those “front row” people comprise a Who’s Who of Illinois tax buyers: John Vassen, of Belleville; Scott McLean, of East St. Louis; Dennis Ballinger, of Decatur; John Sieron, of East St. Louis; and Barrett Rochman, of Carbondale, according to a copy of the seating chart for November’s tax sales, which Suarez provided at the News-Democrat’s request.

The seating chart is based on campaign donations, Brosh said.

“Everybody knows the more you donate, the better seating you get, the more your voice is heard,” Brosh said.

Suarez denied campaign donations made a difference. Instead, the seating chart is based on each tax buyers’ level of experience and familiarity with the St. Clair County real estate market, he said.

“We’ll give those people with the longevity, and the larger buyers, we will give them preference,” Suarez said. “You have to deal with these people all the time.”

Even so, all donations to Suarez’s re-election fund from tax buyers since 2003 — a total of $22,200 — came exclusively from the tax buyers that Suarez has assigned to the front row, campaign disclosure records show.

Ballinger, who gave $5,000 since 2005, was the single biggest donor to Suarez among tax buyers, the records show.

How sales work

Tax sales work like this: Each of the state's 102 county treasurers conduct sales of unpaid taxes owed to the county by property owners.

With few exceptions, these sales are conducted like reverse auctions, during which investors bid down the interest penalty rates they may charge the property owners.

These investors are buying the right to pay the unpaid property taxes. The investors make money by charging a penalty to the property owners. If the property owner doesn't pay the taxes and the penalty, the investor can take the property.

The tax buyers base their bids on the quality of the home with the late taxes, as well on the quality of the neighborhood where the house is located. Generally, the better the neighborhood, the lower the interest penalty charged the property owner.

But when a dozen bidders shout at once with the same bid, proximity to the auctioneer can make all the difference, according to Eric Cissell, a rookie tax buyer from Millstadt.

Cissell, a retired Air Force noncommissioned officer, found himself in the room's third row, on the left, during the tax sale Nov. 8.

Although no one explained to him why he was assigned his seat, he figured out the reason pretty quickly, he said.

"They place those people by knowledge and experience up front," Cissell said.

Not only does their proximity to the auctioneer give them an edge, but these big tax buyers also have multiple representatives bidding on the same properties, making it even harder for small tax buyers to bid against them, Cissell said.

"There might be three people there for the same company. They'll hand signal each other," he said, adding that as a result, "The people in the front row, yeah, they get the good properties."

Suarez defended the seating chart for tax sales. If property owners plan to redeem their taxes through payment plans, "it's much easier dealing with those local tax buyers because they understand the system, and understand the area," he said.

Suarez also denied that those who were assigned the front seats during the tax sales enjoyed an advantage over tax buyers seated further back.

"I don't hear any complaints," Suarez said. "Some people want the second row. Some people want center. Some people want to be on the right hand side. ... Who knows."

But on this point Rochman, a tax buyer accorded front row status in St. Clair County tax sales, disagreed with Suarez.

A seat close to the auctioneer does indeed give an edge to tax buyers in verbal bidding situations, said Rochman, whose firm, Sabre Group, has donated $3,000 to Suarez's campaign fund since 2004.

"Yes, absolutely there is" an advantage to being seated in the front row, Rochman said. "Because your voice will be heard."

Rochman, however, denied that his donations to Suarez had anything to do with his receiving preferential seating.

Instead, where tax buyers are assigned to during the county tax sales was about fairness, he said.

"Why should a guy who wants to bid the lowest number and maybe get that number out and maybe bid the most competitive rate, be forced to sit four rows back?" Rochman said. "And why should the guy who bids only nine items sit in the front row?"

Champaign County Treasurer Dan Welch said he's never heard of a seating chart system used in a tax sale.

"I would never do anything like that," said Welch, the president of the state county treasurers' association. "I don't even know how you'd do a seating chart."

Welch called a tax sale seating chart "an odd thing," but also acknowledged "there's an advantage to being toward the front."

State law gives almost total discretion to county treasurers in determining how they set up and oversee delinquent property tax sales.

"The law in the state of Illinois is the treasurer can conduct the sale in the style he sees fit," Rochman said.

Fred Bathon, a former Madison County treasurer, enforced a seating chart system at the tax sales he oversaw up until his resignation a year ago.

In 2006, Republican treasurer candidate Kurt Prenzler, condemned Bathon's seating chart system, alleging that Bathon, a Democratic, gave the best seats to those who gave the most money to Bathon's election fund and to a charity named after his late daughter.

Bathon called Prenzler's criticism at the time "a baseless attack and accusation" and denied any connection between front row seating and campaign donations.

"I don't care if a guy gives me something or he gives me nothing," Bathon said at the time, a few days before his re-election. "He'll get a fair shake at the tax sale."

Even so, one of the first things Frank Miles did when he was sworn in as the county treasurer in January 2010 was to end the seating chart system.

Miles enacted a series of other reforms aimed at making tax sales more transparent and fair, but Prenzler defeated him anyway in November's treasurer election.

Contact reporter Mike Fitzgerald at mfitzgerald@bnd.com or 239-2533.

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