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How elected leaders helped fuel Aaron Rossi's business growth

Aaron Rossi with Mark Luft
Eric Stock
/
WGLT
Reditus CEO Aaron Rossi , left, leads a tour of its coronavirus testing lab with Pekin Mayor Mark Luft, who also is a Republican state representative.

During the early days of the COVID-19 pandemic, Gov. JB Pritzker’s daily media briefings were appointment viewing for many.

There were fewer high-profile places to be than standing next to the governor as he updated Illinoisans on the state’s coronavirus response. On May 8, 2020, Reditus Labs CEO Aaron Rossi shared the stage with Pritzker. At the time, Reditus was emerging as one of the state’s leading companies for coronavirus testing.

“I’d like to congratulate the governor and state officials for reaching (testing) milestones that they have today,” Rossi declared during the news conference.

That wasn’t Rossi’s first interaction with an elected official, and it was far from his last. Rossi would transform a little-known company of fewer than 10 employees into a coronavirus testing behemoth, largely with taxpayer-funded state contracts.

Questions into how much government help Reditus and Aaron Rossi’s other companies received — and how Reditus got it — have come into focus now that Rossi faces federal charges that he lied about his income to the Internal Revenue Service and civil complaints from several business partners accusing him of extravagant personal spending and shady accounting involving Reditus and his other businesses.

One legislator who has been instrumental in assisting Reditus’ rise, Pekin mayor and state Rep. Mark Luft, has distanced himself from Rossi since those charged were filed.

Working with Pekin

Rossi’s companies have requested financial help from the city of Pekin three times since 2019. All three times the city approved.

In what appears to be Rossi’s first request for the city, he wanted to take over an orthotics company that had gone bankrupt, PAL Health Technologies.

Rossi convinced the city to grant the business $300,000 tax incentives, mostly through a tax increment financing (TIF) district. TIFs are a common government incentive whereby a business receives tax breaks on a development that advocates say would not happen without government intervention. A portion of that funding was tied to employment benchmarks, which PAL met.

The council’s vote was unanimous. Luft was on the council at the time. He did not become mayor until 2019.

Rossi’s second contact with the city of Pekin came in the spring 2020. It was early in the COVID-19 pandemic and Reditus Labs needed help to ramp up production for coronavirus testing. Pekin came to the rescue, approving a $100,000 loan to the company.

It was through that COVID testing that Reditus would make hundreds of millions of dollars, a big chunk of it through government contracts, including the Illinois Department of Public Health, the Illinois Department of Corrections and Illinois State University. Even private employers such as Illinois Wesleyan University were eligible to receive federal funding to pay for the coronavirus tests.

IDPH last week announced it would not renew its contract with Reditus after the allegations against Rossi surfaced. The state’s coronavirus testing site at the Interstate Center in Bloomington, run by Reditus, closes on Thursday.

The Pritzker administration did not respond to a request for comment.

The third project Rossi brought to the city of Pekin seeking help was for a craft cannabis operation. The state of Illinois had recently legalized the production and sale of marijuana and Rossi wanted to get involved. Rossi’s latest venture, called Riverway Craft Laboratories, wanted $500,000 in tax breaks if the state approved its cannabis license. The state did grant Rossi a license.

Then in September 2021, Rossi came back to the Pekin council and asked for less in tax breaks (only $150,000) but he wanted the city to sell him nearly 60 acres for the site for $100. The council approved in a 5-1 vote. Council member Dave Nutter cast the only “no” vote. He said he supported the cannabis site, but didn’t want the city to give away land he estimated was worth at least $500,000. Luft did not attend the meeting.

The craft cannabis site hasn’t opened as the state’s craft cannabis licenses have become tied up in court.

Luft said the city has had a good relationship with Rossi, noting Reditus and his other business ventures have added hundreds of jobs for the city.

“We had no idea who Aaron Rossi was when he came to Pekin, and decided to resurface PAL Health that had gone bankrupt and closed up and that was reopened and those jobs were brought back and added,” Luft said.

Bad vibe in Bloomington

Rossi did not always get government helped whenever it asked. Pekin became Rossi’s corporate home only after economic developers in McLean County were skeptical of his plans.

Mike O’Grady was interim chair and vice president of the Bloomington-Normal Economic Development Council in 2018. O’Grady said he and other economic developers met with several of Rossi’s business associates in 2018 about building an orthotics production facility in Bloomington. O’Grady said Rossi was not involved in the discussions.

O’Grady said Rossi’s associates requested tax breaks, but wouldn’t give specifics and had no business track record.

“We were concerned because we were struggling to get answers from them on how many jobs, what kind of investment," O’Grady recalled.

O’Grady said the EDC isn’t going to advocate for government incentives for a company that can’t provide solid evidence that they have a plan for success. “It did not appear to us that that was going to happen,” said O’Grady, noting talks did not get very far.

O’Grady, who remains in economic development through the Wabash Valley Power Alliance, said Rossi’s associates decided not to pursue any further discussions after they accused the city of Bloomington of leaking information about the project.

When Rossi later went to Pekin seeking incentives to take over PAL Health, he complained that McLean County was dragging its feet on coming up with assistance.

Pekin’s mayor at the time, John McCabe, said he who hesitates loses. In O’Grady’s view, Bloomington just wasn’t interested and he believes the city made the right call, given Rossi’s current legal trouble.

“In hindsight, I’m certainly glad that it never progressed very far,” O’Grady said.

Campaign contributions

Another tool businesses often use to get the attention and support of lawmakers is through their pocketbook. According to online records with the Illinois State Board of Elections, Aaron Rossi and Reditus became actively involved in campaign funding for state and federal legislators and candidates starting in 2020, but they are all from the same party.

Rossi and Reditus made more than a dozen political contributions to Republican candidates or causes, including U.S. Rep. Darin LaHood of Peoria, then-Illinois Senate Minority Leader Bill Brady, House GOP leader Jim Durkin and state Rep. Ryan Spain. Rossi also made several contributions to Donald Trump’s re-election campaign for president. That included a $500 donation in December 2020, after Trump lost the election.

The latest contribution tied to Rossi was on March 16. State records show Reditus gave $12,000 to Luft’s re-election campaign for the Illinois House. That was one day after Rossi was charged in a federal indictment with tax fraud. He allegedly underreported his income to the IRS from 2015 to 2017, before he owned PAL Health or Reditus.

Luft, who represents Pekin and areas west of Peoria in the Illinois House and is seeking re-election, said he won’t accept the contribution. “We don’t always know if our treasurers and our campaign teams take those donations,” Luft said. “When I was made aware of that, we instantly decided that donation is not going to be accepted under the terms that have come out, (I) had no idea that was going to come out.”

Luft’s wife also is the vice president of marketing for Rossi’s latest business venture, AJR Brands, a printing and marketing company.

Luft faces a Republican primary challenge in June for the Illinois 93rd House District against Travis Weaver of Edwards.

Elections records show Aaron Rossi gave Luft’s previous Illinois House campaign $2,000 in 2020, one month before the city of Pekin initially approved tax incentives for Rossi’s craft cannabis operation. State records show that donation was not returned.

David Griesing
David Griesing

Conflicts of interest

A good government expert says it’s rare that candidates return campaign contributions from private citizens or companies that run into legal trouble, but he said it can be a good way to restore public confidence in government if those donations suggest an attempt at legislative influence.

“One can argue that even the appearance of a conflict is a problem and if they want to be exemplary, perhaps they should consider giving money back even if it is only the appearance of a conflict,” said David Griesing, president and CEO of the Better Government Association.

Representatives for Reps. Durkin and Spain and LaHood’s campaign did not respond to requests for comment on whether they plan to return contributions from Rossi or Reditus.

LaHood later told WJBC Radio that he has since returned the donations from Rossi.

Griesing said there’s no clear indication of any wrongdoing with these contributions from Rossi and Reditus, as he noted the contributions were all to Republicans, who are heavily outnumbered by Democrats in the state legislature. But he said the donations are another example of why Illinois needs more transparency in financing political campaigns.

“Just because this is the way the sausage gets made, doesn’t mean we ought to accept it,” Griesing said. “We have to revolt against it.”

Reditus did not respond to a request for comment for this story.

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Updated: March 30, 2022 at 10:29 AM CDT
This story as been updated to indicate PAL Health Technologies received $300,000 in incentives from Pekin and LaHood's statement that he has returned contributions from Aaron Rossi.
Eric Stock is the News Director at WGLT. You can contact Eric at ejstoc1@ilstu.edu.
Maggie Strahan is a Public Affairs Reporting program intern for WGLT and WCBU.
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