Faced with pressure from state regulators and a multimillion-dollar deficit in a funeral trust fund, the Illinois Funeral Directors Association two years ago turned to Roland Burris for help.

Faced with pressure from state regulators and a multimillion-dollar deficit in a funeral trust fund, the Illinois Funeral Directors Association two years ago turned to Roland Burris for help.


Burris, appointed last month to the U.S. Senate from Illinois, met at least once in 2007 with state officials who had determined the IFDA’s pre-need funeral trust fund, set up to provide funerals for nearly 50,000 people in Illinois, had a $39 million shortfall as of the end of 2005.


Reached mid-afternoon Friday, Darrel Thompson, Burris’ chief of staff, said the senator was too busy with official duties to answer questions.


Just how effective Burris was as an IFDA lobbyist isn’t clear.


Five months after Burris met with officials from the state comptroller’s office and Department of Financial and Professional Regulation, Burris wrote Comptroller Daniel Hynes, requesting a meeting and saying his calls hadn’t been returned.


“My company has been retained by the Illinois Funeral Director’s Association to assist them in the very important matters of the Funeral and Burial Trust Funds that is pending with your office,” Burris wrote in the letter to Hynes dated July 16, 2007. “My client, IFDA is very willing to resolve this matter with the least amount of difficulties as possible. They retained me as a former State Comptroller to work with your office and state agencies to resolve these issues. Therefore, I am requesting a meeting with Assistant Comptroller (Peggy) Roth and you to see if we can work out a solution to this issue that is satisfactory to all parties that will protect the investment of 49,000 investors and be in compliance with state law.”


The requested meeting never took place, said Carol Knowles, Hynes spokeswoman. Knowles said Hynes has a policy of not meeting with lobbyists for entities regulated by the comptroller’s office.


“When he became aware of what the topic was, there were no further discussions,” Knowles said.


The IFDA refused to answer questions about Burris’ work as a lobbyist, responding to queries through an e-mailed statement sent by a public relations firm.


“Mr. Burris’ law firm was retained to lobby on behalf of IFDA beginning in 2007, and that contract expired in 2008,” wrote Eric Robinson, CEO of Frontline Media Strategies, in the e-mailed statement he said should be attributed to Duane Marsh, IFDA executive director. “As Trust issues are now in litigation, IFDA is answering questions through written statements as appropriate.”


Less than six weeks after registering with the state as an IFDA lobbyist, Burris attended a meeting in February 2007 that included officials from the comptroller’s office and the Department of Financial and Professional Regulation.


Knowles said the comptroller’s staff did not know in advance that Burris would be at the meeting with IFDA officials. The IFDA had been told by the comptroller’s office that management of the troubled trust was “intolerable.”


While Burris in his letter writes that he had spoken with Hynes about the trust, Knowles said she doesn’t believe that was the case.


“I’m not sure they talked at all,” Knowles said. “There was a message that came in that Mr. Burris had called, and the comptroller referred it to a staff person and wasn’t aware what the topic was. When he became aware what the topic was, there were no further discussions. The comptroller has a policy against talking to lobbyists regarding regulatory matters.”


The state comptroller’s office stripped the IFDA of its authority to manage the trust in September 2007, ruling that the association should never have been allowed to oversee the money. Burris was comptroller in 1980 when the IFDA got its license from the comptroller’s office.


As a state elected official, Burris, who was comptroller from 1979 until 1991, then attorney general from 1991 to 1995, accepted campaign contributions totaling less than $2,800 from the IFDA, its political action committee and IFDA Services, a subsidiary that administered the funeral trust. Funeral homes gave less than $9,400, according to records at the Illinois Board of Elections.


Hynes has accepted no contributions from the IFDA or its subsidiaries. Knowles said the comptroller does not accept contributions from entities regulated by his office.


After an internal audit of the trust that was reviewed by an outside CPA firm, the comptroller’s office in 2006 sent a letter to the association stating that the trust had a $39 million deficit and that the situation was “intolerable.” The deficit ballooned to $59 million last fall, when the trust’s value was written down by 25 percent.


The trust is heavily invested in life insurance policies on funeral home directors and IFDA insiders, and returns are not guaranteed. Rather, pay-outs are based on the performance of investments made with premium monies.


Six funeral home directors have sued the IFDA in Cook County Circuit Court, saying the trust was mismanaged and that they, not consumers, are on the hook for any financial losses. In Kane County, two women sued the IFDA in November and are seeking class-action status. Their attorney says consumers could lose money if funeral homes go out of business due to losses from the trust.


At a glance


Believed to total about $300 million, a pre-need funeral trust fund once managed by the Illinois Funeral Directors Association is in financial trouble.


In lawsuits filed against the IFDA by funeral home directors and consumers, plaintiffs compare the fund to a Ponzi scheme, saying new deposits were used to pay benefits while the fund’s value dropped.