Feds investigating Pritzker tax assessment
Probing records from Berrios’ time as Cook assessor
Federal prosecutors in Chicago are amassing records related to property tax assessments conducted under former Cook County Assessor Joe Berrios, including a tax break given to Gov. J.B. Pritzker after toilets were removed from a Gold Coast mansion he owned.
In all, the U.S. attorney’s office requested records related to more than 100 properties, obtaining the information through emails sent to current Assessor Fritz Kaegi.
The records indicate that appeals of some of the assessments were handled by law firms led by House Speaker Michael Madigan or 14th Ward Ald. Ed Burke.
Federal investigations are swirling around allies of Madigan, head of the Illinois Democratic Party. On Friday, the U.S. attorney’s office announced ComEd was paying a $200 million criminal fine as part of a federal investigation into a “years-long bribery scheme” involving jobs, contracts and payments to Madigan allies.
As the former chairman of the Cook County Democratic Party, Berrios was a key ally of Madigan, and Burke held sway over the party’s endorsement of judicial candidates during Berrios’ years as chairman. Burke has been indicted by a federal grand jury on racketeering charges related to alleged abuse of his aldermanic powers and awaits trial.
Calls to Berrios for comment were not returned. A call for comment to Madigan spokesman Steve Brown was also not immediately returned, and Burke did not respond to a message left at his ward office.
A billionaire with vast holdings, Pritzker is an heir to the Hyatt hotel fortune, a global chain of hotels founded by the Pritzker family. His father, Donald, was chief executive and a driving force behind the chain.
In addition to seeking records on the assessments of Pritzker’s side-by-side mansions on Astor Street in the Gold Coast, the U.S. attorney’s office also requested information related to assessments and appeals filed by the Schmidt, Salzman & Moran law firm “on behalf of entities affiliated with the Pritzkers, including (the) Hyatt (hotel chain), Astor Street and Pritzker Group, from Jan. 1, 2016 to present,” according to documents provided to the Tribune through an open records request.
Prosecutors also sought all appeals filed by the law firm “for high value residential properties based on vacancy and uninhabitability from Jan. 1, 2014 through Dec. 31, 2016, and the results of those appeals.”
Calls to two of the firm’s named partners for comment were not returned.
Between 2012 and 2014, assessments on one of Pritzker’s neighboring Gold Coast mansions were dramatically lowered after five toilets were removed during a rehabilitation project and the assessor deemed the mansion uninhabitable. At the time, Pritzker and his wife were rehabbing the home while living in the other one.
The breaks, which initially saved Pritzker $330,000 in property taxes, were the subject of a 2018 investigation by Cook County Inspector General Patrick Blanchard in the wake of an earlier SunTimes story on the mansion’s tax breaks.
Blanchard found that Pritzker’s wife, M.K. Pritzker, asked a contractor in 2015 to remove the mansion’s toilets to make the home uninhabitable so it could be reassessed at a lower value.
M.K. Pritzker’s brother and her personal assistant later made “false representations” in sworn affidavits to the assessor about the mansion’s condition and when the toilets were removed, Blanchard found.
Blanchard characterized it as a “scheme to defraud” taxpayers.
Pritzker at the time denied doing anything wrong and suggested that the leaking of Blanchard’s document was politically motivated. But he nevertheless paid the county treasurer $330,000, the amount he had saved, as the issue swirled during his successful 2018 campaign against the then-incumbent governor, Bruce Rauner.
“There’s nothing new to tell you,” Pritzker said Friday when asked about the matter at an unrelated news conference. “I learned about this from a reporter. The facts about this matter have been public for some time and extensively have been discussed, as they were in the 2018 election.
“And they’ve been fully aired, and as I’ve always said, any review will show that all the rules were followed,” the governor added. “I’ve not been contacted by federal authorities, nor has my wife.”
Blanchard sent his findings to both federal and Cook County prosecutors. A federal source with knowledge of Blanchard’s report said it was unlikely to lead to any criminal charges. However, the source cautioned, the federal government has a number of ongoing public corruption investigations, and authorities do not know where all those efforts ultimately could lead.
Tandra Simonton, spokeswoman for the Cook County state’s attorney, said Friday that the office had not yet decided whether to pursue the case.
The monthslong effort by the U.S. Attorney’s Office in Chicago to obtain the records, first reported by the Chicago Sun-Times, appears to have sidestepped the usual practice of issuing subpoenas for the documents. Instead, they were requested through a series of emails sent by prosecutors to Kaegi between Jan. 17 and May 17.
Kaegi in 2018 defeated Berrios during a Democratic primary campaign in which Kaegi accused his predecessor of conflicts for taking campaign contributions from attorneys who file property tax appeals.
Kaegi, allied with the nontraditional reform wing of the city’s Democratic Party, also pledged fairer tax assessments in the wake of a Tribune investigation that found Berrios tended to value high-priced homes too low and lower-priced homes too high, unfairly shifting the tax burden to less affluent people.