CHICAGO - The Illinois Finance Authority board is expected at its meeting today to name Illinois chief operating officer John Filan - the state's top fiscal officer since Gov. Rod Blagojevich took office in 2003 - as its new executive director, according to sources.

State officials, including Filan, could not be reached to comment Tuesday as state offices were closed in observance of Veteran's Day. Consideration of an executive director appears as an item on the IFA agenda for its meeting today, but IFA spokeswoman Diane Hamburger declined to comment further.

Filan joined the Blagojevich administration as director of the Office of Management and Budget when the governor took office in January 2003, helping steer the state through multibillion-dollar deficits in the early years and shepherding a $10 billion general obligation pension bond issue through legislative approval to market.

The deal helped bring down the state's mammoth unfunded pension liability, but the budget office faced a legislative backlash for it and other debt tactics that included extending bond maturities, and lawmakers placed new debt structuring restrictions on the office the next year. Filan has defended the moves as better options than cutting health care and education to meet the governor's pledge not to raise the sales or income tax.

He also led the push to consolidate a handful of statewide conduit authorities into the new IFA agency that opened its doors in January 2005. It was the second-ranked issuer last year in the Midwest, selling $3.6 billion of debt in 85 transactions and was first in 2006, selling $2 billion of debt in 70 transactions, according to Thomson Reuters.

Filan, who had previous government experience working for former Gov. Dan Walker, left the accounting and financial advisory firm FPT&W, which he part-owned, to join the administration after chairing Blagojevich's budget advisory group.

In early 2007, Blagojevich elevated Filan to a senior advisory position with the title of chief operating officer overseeing state agencies that manage capital planning, infrastructure, and economic development. Although Ginger Ostro was named to fill the budget director's position, Filan has remained the key decision-maker on fiscal issues such as debt policies, capital planning, and underwriting teams. The state's debt manager is Phil Culpepper.

Sources have said Filan sought the elevated status because of clashes with John Harris, who left his position as Chicago budget director in the summer of 2005 for the newly created post of chief operating officer overseeing the day-to-day operations of all state agencies under Blagojevich's authority.

Harris and Filan have continued to clash. Filan had been looking for a new position and sought out the IFA appointment, sources said, adding that the appointment provides a smooth transition out of the administration.

Both men have remained with the administration amid an escalating federal investigation into state corruption and pay-to-play tactics involving state appointments and pension investment contracts. The former head of the IFA, Ali Ata, testified at the recent trial of former Blagojevich fundraiser Antoin Rezko that the governor gave him his job after substantial political contributions.

Under IFA statutes, the governor names two candidates for IFA consideration to fill the executive director's post. That position has been vacant for several months since Kym Hubbard announced her resignation in July to return to the private sector. Some have speculated that Filan's ties to President-elect Barack Obama's chief political strategist, David Axelrod, may help land him a Washington job.

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