$248,000 Rialto Contract For Mudron Violated Ethics Code: Inspector General

JOLIET, IL — A 78-page report prepared by Joliet's Westmont-based inspector general has determined two-term Joliet City Councilman Pat Mudron violated the city's code of ethics by obtaining a no-bid $248,000 contract in April to provide the Rialto Square Theatre with insurance coverage.

Mudron is the Joliet City Council's liaison to the Rialto, and he also operates a Joliet insurance company, Mudron Kane Insurance, at 113 Republic Ave.

Page 3 states that Joliet's inspector general "Sean Connolly asked Councilman Mudron whether he believed he had a duty to disclose this business arrangement to the Joliet City Council; Council Mudron stated he did not believe he had such a duty. During the interview, Councilman Mudron explained that as the Liaison to the (Rialto board), he was a non-voting individual and had a duty to report back to the City Council regarding the Rialto."

The inspector general's report, which has asked the Illinois Attorney General's Office to investigate Pat Mudron, as well as Rialto board chairman Bob Filotto, indicated the Rialto may have been on the verge of closing this year after Rialto officials realized their insurance premiums could be skyrocketing by as much as 600 percent.

"What is also concerning, is whether the public, the (Rialto) board or the Joliet City Council would have ever known that Mr. Filotto signed a contract with Mudron Kane for $248,000 per year had the anonymous caller not contacted the Joliet Inspector General to voice a concern about a possible conflict of interest," states the report by Joliet's Inspector Generals, attorney Sean Connolly and private investigator Martin Walsh.

Joliet Patch left voicemail messages seeking comment from Mudron and Filotto on Wednesday. Mudron did not call back. Filotto sent Joliet Patch a short statement that read:

"The only comment I would have is that the action I took, later ratified unanimously by the (Rialto) authority board, saved the Rialto several hundred thousand dollars in insurance premiums. I am thankful that Mudron and Kane was able to help us secure this policy just days before our precious insurance policy expired."

The inspector general's report had a different take on the matter.

"Even if Mr. Filotto, as Board Chairman, had the legal authority to sign the contract under 'emergency' conditions, he failed to call a board meeting at the earliest opportunity to seek board approval or ratification of his actions," the inspector general report sent to the Illinois Attorney General's Office noted. "His failure to do so most likely violated the Open Meetings Act."

The inspector general's report points out that downtown Joliet's 96-year-old theater does not have any sprinkler system in case of a major fire.

Both Filotto and Mudron were interviewed as part of the inspector general's investigation. Mudron remarked during his interview that he does not believe that obtaining the $248,000 insurance contract from the Rialto was a violation of Joliet's ethics laws governing elected officials.

Another high-ranking official with the Rialto, now-former executive director Valerie Devine, was also interviewed by the inspector generals for Joliet.

Connolly's inspector general report contains the following summary of Devine's interview from July 27. "Ms. Devine said the insurance was a priority, and she understood the consequences if the Rialto's insurance was cancelled. The theater would close, and it would be very difficult to secure insurance after cancellation. She also understood the theater could not afford to pay $450,000 in premiums, which was the number submitted by Larry Jungles of Brown & Brown.

"She said Mr. Jungles did what he could as a broker to help the Rialto. Ms. Devine recalled many conversations with Mr. Jungles about the insurance problem for a year. She also said she had conversations with Councilman Mudron and Mr. Jungles together. Ms. Devine does not believe Councilman Mudron was soliciting the Rialto’s insurance business, rather, she viewed him as a resource."

When asked about Mudron's influence at the Rialto, Devine told the inspector general's private investigator, "I wouldn't consider him a force. He was a presence."

Devine also said she was in a state of "panic and desperation" with regard to the insurance problem for the Rialto, the inspector general's report reflected.

"Councilman Mudron secured a quote for $248,000, $202,000 less than Brown & Brown’s best quote," the report noted.

After overseeing the Rialto for five years, Devine announced her departure this spring and left in May. In July, she took a new job, special projects coordinator at the Joliet Public Library.

In any event, Connolly's report has been sent to the Illinois Attorney General's Office in hopes of taking action against Mudron.

The report notes the Rialto is partially funded by Joliet, which is funded by taxpayers.

"The business of the people must be conducted in the open, especially when tax dollars are being used to fund a $248,000 contract, with an insurance agency in which a Joliet Councilman is a principal," Connolly declared.

"Mr. Filotto believed he had the authority to sign the contract, without board approval, because he viewed the insurance situation as an emergency, however, he was unable to state any bylaw or provision which provides such authority in what is perceived to be an emergency. The (Rialto) board bylaws do not grant emergency authority to the Board Chairman."

According to Connolly and Walsh's report, the following events led to Councilman Mudron obtaining the no-bid $248,000 contract for his insurance agency:

Early this year, the Rialto faced a massive insurance premium increase; its insurance premium in 2021 was $72,000 and the quote given by its insurance provider at the time, Brown & Brown, for 2022 was $450,000 because of the Rialto's lack of having a fire sprinkler system.

The Rialto's board did not have ability to pay an annual insurance premium of $450,000.

Around March or April, after receiving Brown & Brown’s $450,000 insurance quote, Rialto board chairman Filotto reached out to Mudron, someone he has known most of his life and trusted, to see if he could help the Rialto secure a lower insurance premium.

Mudron stated he told Filotto he could not give him a quote, but his son could. Filotto denied that Mudron made this statement.

It is undisputed that Mudron Kane provided the Rialto with an insurance quote of approximately $248,000, which was significantly lower than Brown & Brown’s quote of $450,000.

Filotto accepted this quote on behalf of the Rialto and signed a contract with Mudron Kane.

Filotto did not discuss the Mudron Kane quote with the other Rialto board members, except Jeff Pierson, and did not present the matter to the board for a vote.

Filotto stated he felt it was an emergency situation because the current insurance policy was set to lapse the next day; this is why he made the unilateral decision to sign a contract with Mudron Kane, even though the Rialto's board members knew for over a year that insurance premiums were expected to drastically increase.