Aug. 22, 2014 SIGN IN | REGISTER
Roll Call

Lawsuits, Debts Plague Rep. Bobby Rush

Many Court Cases and Debts Go Undisclosed

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Rep. Bobby Rush has been sued repeatedly in local courts for contract disputes including unpaid bills, but thanks to quirks in Congressional reporting requirements, his annual financial reports offer no hint of that fiscal turbulence. 

According to public court records and media reports, the Illinois Democrat has been named in nearly two dozen lawsuits since the early 1980s, most recently disputes over his home mortgages and bills owed by the Chicago church he leads. 

When the Chicago Tribune reported in 2006 that Rush had faced more than 20 lawsuits since the 1980s, including disputes over automobile loans, he told the newspaper: “I’m an easy target.” 

The lawmaker also told the Tribune that the lawsuits were frivolous, but he has had to pay off debts in several of the cases.

But Rush’s financial disclosure reports — in which Members detail their assets, liabilities and other personal information — offer no details on these debts. He generally lists on the annual forms a few trips, his spouse’s employment status and his posts on charitable organizations that he helped create. Rush has listed no assets or liabilities since his election in 1992. 

Most of the court cases, even those in which Rush has ultimately agreed to pay a debt, appear to be outside the bounds of financial reporting, either because the cases are tied to property that does not have to be reported on the forms — such as Rush’s primary residence — or otherwise fall below reporting thresholds. 

Among the most recent cases, Chicago-based New City Bank filed suit in November against Rush and his wife, Carolyn, alleging the couple had breached mortgage contracts on homes in Illinois and Michigan. 

The lawsuit, citing the couple’s failure to pay taxes on both properties, demanded the immediate repayment of both mortgages and a home equity line of credit valued at more than $600,000 combined. 

According to documents from the Cook County Circuit Court, the bank dropped its lawsuit in January.

“With respect to Congressman Rush, this really was not a big deal,” Stephen Gorman, the bank’s attorney, said Friday. “We filed a suit, his lawyers immediately contacted us, it was worked out within a matter of a few days.”

Cook County Treasurer’s Office records show Rush paid more than $1,900 in property taxes in November, eight months after the March due date. Rush paid an additional $1,800 in December.

Tax records from the Berrien County, Mich., government show the condominium association for Rush’s vacation home placed a lien on that property in February 2010 for nearly $3,700 in unpaid assessments. That lien was lifted in April 2010.

It is not the first time the homes have been the subject of legal proceedings.

The Chicago Sun-Times reported in 2005 that the Rushes had faced foreclosure lawsuits, brought by Washington Mutual, on the same two properties for failing to pay their monthly mortgages. 

A foreclosure sale was scheduled for the Michigan property but ultimately canceled. 

While lawmakers are required to disclose a wide range of personal financial data in annual reports — listing assets such as stocks and savings accounts as well as debts — certain items do not have to be disclosed, including personal and vacation homes.

That exemption applies to the value of the property and any related liabilities, such as mortgages or equity loans, so long as the homes don’t produce any rental income. 

In addition, Members are not required to report on a variety of debts — including taxes owed to the federal, state or local governments. 

Lawmakers are also allowed to leave out any “contingent liabilities” such as payments demanded in ongoing court disputes, as well as any debts they have guaranteed for another debtor.

Rush does not list the $25,000 sought by a Chicago-based electric company in his most recent financial disclosure, which covers calendar year 2009.

The Commonwealth Edison Co. brought a suit against both Rush and the Beloved Community Christian Church, the Chicago-based church where he is the pastor, in an effort to recoup more than $25,000 in unpaid bills.

That case was dismissed in February 2010 at “agreement” of all parties, according to documents in the Cook County Circuit Court. 

“ComEd worked directly with the customer to resolve the case,” ComEd spokeswoman Krissy Posey wrote Thursday in an e-mail. “The customer agreed to pay ComEd and the case was dismissed in Feb. 2010. In cases of non-payment, it is typical for ComEd to work with customers to establish a payment plan to pay off the unpaid balance.”

Posey did not respond to questions about the repayment amount or whether it would be made by Rush or the church. If the debt is to be repaid by the church, Rush would likely not have to list it on his financial disclosure form.

In a response to a series of questions about several lawsuits in which he has been named, Rush said via a spokeswoman that he was never sued by the electric company.

“I was not sued by Commonwealth Edison in 2009,” Rush said. The lawmaker also said he is not personally responsible for other debts held by the church.

Although the church, incorporated in Illinois in 2002 by Marlon Rush, the lawmaker’s brother, continues to operate, its business registration with the state lapsed in 2007 and it was formally dissolved by the state. 

Federal tax officials filed nearly $50,000 in liens against the church in 2010 for unpaid employment taxes. 

A spokeswoman said the Congressman’s office does not respond to inquiries about the church, citing a “bright line” separating the organization and Rush’s Congressional work.

A Tribune report in 2006 stated that Rush and his family are personally responsible for loans related to the church that exceeded $700,000 at that time.

Lawmakers are required to report on loans for which they have co-signed or are personally responsible, but they are not required to disclose business loans for which they are not personally responsible. 

Rush does not report drawing an income from the church, and he is not required to list his post as the church’s pastor on his financial disclosure forms. Although Members must report their memberships in a variety of organizations, religious, social and political groups are excluded.

From 2004 to 2008, Rush listed his seat on the board of directors of the Beloved Community Family Services Corp., one of several social services spinoffs affiliated with the church. He did not list the group on his most recent report.

He regularly donates to the church from his own campaign funds, however, providing more than $175,000 in gifts, an interest-free loan and other donations from 2004 to 2010. 

The Illinois lawmaker faced another lawsuit in 2006 when the Highland Community Bank alleged that he defaulted on a 2005 promissory note valued at more than $12,000. The bank sought repayment of more than $11,000.

Court documents indicate Rush and the bank reached an agreement in 2008 to settle for $13,000. But a 2009 document indicated the amount remained outstanding. 

The court subsequently sought to garnish Rush’s Congressional paycheck for those funds, but the case was closed in March 2009 and the bank reported Rush paid the full amount. 

Members are required to disclose debts that exceed $10,000 to a single creditor at any point in the calendar year, even if the loan is worth less at the end of the year. 

Rush said that he was not obligated to report the promissory note.

“I had no obligation to report this debt on financial disclosure documents,” he wrote in the statement. “I answered this question forthrightly and to the best of my knowledge.”

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