May 22 (Bloomberg) -- Now that former Governor Rod Blagojevich is out of the way, Illinois politicians are getting back to business as usual, Chicago style.

“I don’t believe we’ll see any real reform in my lifetime,” said Lupe Martinez, a 56-year-old crane operator, as he swept the sidewalk in front of his brick bungalow on Chicago’s southwest side. “Every time we think we’ve elected someone who will do the right thing, they turn out to be liars and thieves.”

Four months after legislators removed Blagojevich from office for abuses including an alleged attempt to sell President Barack Obama’s U.S. Senate seat, they are poised to reject limits on how much their leaders dole out to other lawmakers to ensure loyalty. The Illinois Senate is scheduled to vote on ethics measures today.

Researchers at the University of Illinois-Chicago tallied the price of corruption to state taxpayers: at least $500 million a year. Based on prosecution costs and estimates that 5 percent of state contracts go to the politically connected, that equals $109 per family. The total is enough to pay the average salary for 8,214 public school teachers.

The university’s May 13 report found that during the past four decades, graft convictions of elected officials or their cronies averaged three per month. Illinois ranked 18th per capita for the number of convictions on federal public- corruption charges from 1998 through 2007, according to an analysis by USA Today.

Political shenanigans hurt the state’s economic growth, said Duane Noland, a member of the Illinois Reform Commission appointed by Blagojevich’s successor, fellow Democrat Patrick Quinn.

Deters Investment

“When you have corrupt administrations, businesspeople become reluctant to invest and set up shop in the state because there’s so much uncertainty involved,” said Noland, chief executive officer of the Association of Illinois Electric Cooperatives in Springfield.

“If we can’t muster the strength to enact real reform after being exposed on a national scale for crime in government, when will we ever do it?” he said.

Good-government advocates, dismissed as “goo goos” in the local dialect, doubt that the Legislature will adopt an ethics crackdown before it adjourns May 31.

“It’s a matter of power, raw power,” said Dick Simpson, a political science professor and former Chicago alderman who led the team that compiled the cost report. Chicago, where the Obama family keeps a home, is the third-largest U.S. city, with 2.8 million people.

Leaders’ Stance

The two Democrats from Chicago who control the General Assembly, House Speaker Michael Madigan and Senate President John Cullerton, are signaling that they won’t approve several of the Reform Commission’s recommendations. The panel’s proposals include caps on how much money the most powerful lawmakers can raise and give to rank-and-file legislators. Illinois is one of just four U.S. states without limits on most types of campaign donations.

The person with the most to lose is Madigan, 67, who has been speaker of the Illinois House for 24 of the past 26 years. The commission’s limits would diminish his control of three campaign funds that doled out more than $7 million in 2008.

The cap would crimp Madigan’s role as the single biggest contributor to the state Democratic Party’s campaign finances. Friends of Michael J. Madigan gave $1.65 million to the state organization last year, or 41 percent of the total collected by the party, election board filings show. Steve Brown, a top aide to Madigan, said the speaker would not comment for this story.

Term Limits Proposed

The commission also called for term limits of 14 years for the four top legislative positions -- a proposal Madigan already has rejected.

“Perpetual occupancy of these positions tends to give disproportionate power to a few politicians,” the panel said in its April 28 report. “This concentration of power disenfranchises the average voter -- leading them to believe that without the ear of a select few politicians, their opinion effectively goes unheard.”

The Legislature is expected to pass some measures, such as stricter requirements on campaign-funding disclosures, Brown said. Lawmakers will resist caps on contributions such as the $2,400 recommended by the Quinn-appointed panel because they could force candidates to spend more time raising money, he said.

“The reality of contribution limits is that no one’s making campaigns any cheaper,” Brown said in an interview. Madigan opposes term limits for legislative leaders because they would put more power in the hands of lobbyists and staff, Brown said.

Madigan’s Methods

Madigan’s methods were on display during the fight to fill Obama’s Senate seat. As he assembled a committee in December to impeach Blagojevich, the speaker withdrew plans for a special election. Instead of voters selecting their new senator, the choice was left in the hands of Blagojevich, who tapped lobbyist and former state Attorney General Roland Burris, 71.

Republicans complained that Madigan’s top deputy, House Majority Leader Barbara Flynn Currie, had failed to notify colleagues about an affidavit Burris submitted that shed new light on his relationship with Blagojevich. Currie, 69, said at the time that she didn’t read Burris’s responses promptly because she assumed they would be routine.

Another Madigan deputy then called on local prosecutors to investigate whether an unnamed legislative leader sought a state job for a girlfriend.

Blagojevich Charges

Blagojevich, 52, served six years as governor before his removal Jan. 29. He pleaded not guilty after being indicted April 2 for racketeering conspiracy, extortion and other charges, including allegations that he attempted to auction Obama’s Senate seat.

U.S. Representative Jesse Jackson Jr., 44, said last month that he is the subject of a House ethics probe into his contacts with Blagojevich about the seat.

Separately, Jackson paid at least $247,500 in salary to his wife, a Chicago alderman, since 2001 in a way that pushes the limits of propriety, according to Citizens for Responsibility and Ethics in Washington. Jackson denied wrongdoing in a statement last month, saying, “I have done nothing wrong and reject pay-to-play politics.”

The disenchantment with governance in Illinois is acute in Hyde Park, the epicenter of the city’s self-styled reformers. Currie, who represents Obama’s home neighborhood, is under fire over campaign-finance legislation.

Leader’s Responsibility

“She is the House majority leader: She should lead,” Jay Mulberry, a Hyde Park activist and retired school principal, wrote in a recent e-mail to neighbors, urging them to ask Currie to support the ethics bills. Between her “two constituencies” -- Madigan and voters -- “he has the edge,” Mulberry wrote.

Mulberry said he later met with Currie but remained disappointed.

“She’s authentically an icon in our neighborhood, and I always thought she was one of the great liberal leaders,” he said. “But what has she done?”

Currie said she is doing what her constituents want by supporting campaign contribution limits. She said she would back caps as high as $10,000.

“I don’t think my vote is going to be bought for $5,000 or $10,000,” Currie said.

It all comes down to money, said George Bosh, a 73-year-old retired Chicago police detective who lives in the Clearidge neighborhood.

‘The Bottom Line’

“What we need and what they’re going to give us are two different things,” Bosh said. “Money is the bottom line for those guys and I don’t care if it’s Democrats or Republicans in power, all any of them cares about is getting theirs.”

The 95-page list of recommendations issued by the Reform Commission was meant to change that. The panel was led by Patrick Collins, the former federal prosecutor who put Blagojevich’s predecessor, Republican George Ryan, behind bars on corruption charges in 2006.

Madigan, whose district includes Chicago’s Midway International Airport and industrial suburbs such as Hodgkins and Bedford Park, has never been tainted by scandal in 38 years in office, said Charlie Wheeler, an associate professor at the University of Illinois-Springfield.

“He can be punitive against people and is not above taking retribution when someone displeases him,” said Wheeler, who has been following Illinois politics for four decades. “But it’s not to line his own pockets like Blagojevich.”

Blagojevich became the first Illinois governor thrown out of the job in the 191-year history of the state when legislators removed him from office in January, seven weeks after his arrest.

Cleaning House

Madigan introduced a plan May 7 to fire more than 3,000 department heads, secretaries and other state workers hired by Blagojevich and Ryan from 1999 through January. He criticized the new governor, Quinn, for not taking action earlier.

“I’m not satisfied with the pace of change,” Madigan told reporters. “I think it has to be accelerated, and that’s the purpose of the legislation.”

Madigan’s daughter, state Attorney General Lisa Madigan, has said she is looking at either running for the U.S. Senate or challenging Quinn next year.

To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net