Chicago Sun-Times (Sunday)

FEDS CAST WIDE NET ON BERRIOS

U.S. attorney’s office gets records on gov’s Gold Coast mansion, 118 other properties

- BY TIM NOVAK, STAFF REPORTER tnovak@suntimes.com | @tnovaksunt­imes

Federal prosecutor­s have made a series of requests to the Cook County assessor’s office over the past five months for records regarding the $330,000 property tax break that Gov. J.B. Pritzker got on a Gold Coast mansion — a break he got in part because the toilets were disconnect­ed during a stalled remodeling job.

Records obtained by the Chicago SunTimes show the U.S. attorney’s office in Chicago has asked Cook County Assessor Fritz Kaegi for all emails and any other communicat­ions dating to 2012 regarding the tax break that Kaegi’s predecesso­r, Joseph Berrios, gave Pritzker.

As they continue an investigat­ion prompted by a Sun-Times report in May 2017, they have asked for informatio­n including the name of every employee who, under Berrios, “worked, reviewed and/or approved” the tax break for one of the two mansions Pritzker owns on North Astor Street. Pritzker reimbursed Cook County the full value of the tax break in 2018.

Rather than obtain those names through subpoenas, prosecutor­s sent Kaegi’s staff a series of emails beginning Jan. 17 that cited a wide range of specific records, which he has agreed to turn over, records show.

The seven emails to the assessor’s office for records since then also show that, besides the investigat­ion of Pritzker’s tax breaks, prosecutor­s have sought records of other property tax appeals to Berrios between 2010 and 2018 made on 118 properties. Those include the United Center, Gibsons steakhouse on Rush Street, a Bob Rohrman auto dealership in Schaumburg and several homes, including the Rev. Jesse L. Jackson’s residence.

A spokesman for the federal prosecutor’s office wouldn’t talk about the records requests.

Many of the properties — but not all — got tax breaks during the eight-year tenure of Berrios, whom the Sun-Times reported in December is under federal investigat­ion. In most of those cases, the owners hired politicall­y connected law firms to make their case that the assessor was overvaluin­g their properties, and Berrios agreed.

A lower property assessment results in a lower tax bill.

The successful bids to get Berrios to cut his office’s estimation of how much those properties were worth brought those landowners savings that ranged from a few hundred dollars to nearly $2 million in property taxes for one year, according to a Sun-Times analysis.

Among the clout-heavy law firms involved in those appeals were Chicago firms headed by Illinois House Speaker Michael J. Madigan, D-Chicago, Ald. Edward M. Burke (14th) and Steve Pearlman, a close friend of former Mayor Richard M. Daley.

Six of the property owners hired Schmidt Salzman & Moran, the same firm that persuaded Berrios to slash the assessment on Pritzker’s mansion by arguing that it was uninhabita­ble — in part because the toilets had been disconnect­ed.

The governor and his family live in a

12,500-square-foot mansion in the 1400 block of North Astor Street that a Pritzker company called Astor Street LLC bought for $14.6 million 14 years ago.

An email from prosecutor­s that Kaegi received on May 17 asked for records of all appeals Schmidt Salzman & Moran filed with Berrios “for high-value residentia­l properties based on vacancy and uninhabita­bility” between 2014 and 2016. Kaegi’s staff responded with a list of more than 40 homes in Chicago and the suburbs, all worth substantia­lly less than either of Pritzker’s side-by-side mansions.

The same email also asked Kaegi for any other tax appeals since 2016 that Schmidt Salzman “filed on behalf of entities affiliated with the Pritzkers, including Hyatt, Astor Street, and Pritzker Group.” Kaegi’s staff said it didn’t find the firm had handled any other cases for the Pritzkers other than the governor’s mansions.

Schmidt Salzman didn’t return messages regarding Prtizker’s tax break or prosecutor­s’ requests for property tax records involving other clients.

“As I’ve always said, any review will show that all the rules were followed,” Pritzker said Friday, “but I’ve not been contacted by federal authoritie­s, nor has my wife.”

His tax break involved the 6,387-squarefoot mansion next door to his residence, which Pritzker’s company bought for $3.7 million in 2007. The governor started to do renovation­s, during which time it remained vacant.

Berrios put the vacant home’s value at $6.3 million in 2016.

That valuation was appealed by Astor Street manager Thomas Muenster, who’s the brother of Pritzker’s wife, and the Schmidt Salzman firm. They argued that the home was uninhabita­ble and offered photograph­s showing disconnect­ed toilets to prove that.

Berrios agreed, slashing his original $6.3 million assessment to under $1.1 million. The lower assessment saved Pritzker more than $330,000 on the property taxes he paid on the home between 2012 and 2016.

The Sun-Times revealed Pritzker’s big tax break as the billionair­e venture capitalist was seeking the Democratic nomination to challenge then-Gov. Bruce Rauner.

That prompted an investigat­ion by Cook County Inspector General Patrick Blanchard, who concluded that the removal of the toilets was part of a “scheme to defraud” taxpayers, according to a report he released weeks before the November 2018 election.

Three days after Blanchard’s report came out, Pritzker’s company sent Cook County Treasurer Maria Pappas five checks totaling $331,432 — the value of the tax breaks he got from Berrios. He went on to unseat Rauner.

Berrios resigned as chairman of the Cook County Democratic Party after losing the Democratic primary to Kaegi.

Berrios has been under federal investigat­ion, the Sun-Times reported last December based on a subpoena prosecutor­s issued on Dec. 5.

About six weeks later, federal prosecutor­s began sending Kaegi emails seeking records.

Berrios says he wasn’t aware federal investigat­ors had been looking at specific appeals while he was in office filed by law firms that had contribute­d to his campaign funds. “It’s news to me,” he says.

The properties that prosecutor­s sought records about include:

† 1 N. La Salle St., a Loop skyscraper owned by ONL Properties. Burke’s law firm filed eight appeals between 2010 and 2017. During that time, Berrios moved to drasticall­y increase his estimation of the property’s value but backed down. That resulted in Burke getting more than $1.9 million in property savings for the owners. On top of that, he got them a tax refund of $101,951 last year when a Cook County judge agreed to lower the 2015 assessment, when the tax bill totaled $2,098,342.

Burke, who didn’t return calls seeking comment, has been indicted and is awaiting trial on federal charges that accuse him of using his aldermanic power to withhold constructi­on permits for a Burger King restaurant in his ward in a failed effort to get the restaurant to hire his firm to handle its property tax appeals.

Attorney Thomas D. Flanagan of the Flanagan/Bilton law firm took over the appeals in 2018, when Berrios initially raised the assessment by 60%. Berrios later slashed the increase to less than 2%. The owners ended up paying more than $2.9 million in property taxes last year — which was $1.5 million less than they would have under Berrios’ initial valuation.

† The United Center, home to the Bulls

and Blackhawks, filed seven appeals while Berrios was assessor. All were filed by two lawyers who were close friends of Daley — first Terry Newman and now Pearlman.

During Berrios’ final year in office, he initially moved to increase the assessment of the arena and the surroundin­g property the United Center owns by 30%. That would have seen the United Center’s total property tax bill rise from $6.9 million to nearly $8.9 million.

Pearlman appealed. And Berrios agreed to raise his valuation of the property to less than 9%. That meant the United Center avoided a tax increase. Instead, its tax bills remained at $6.9 million.

Pearlman responded to interview requests with a written statement from a public relations firm saying his law firm “has always been and will continue to be responsive to any government agency making inquiry about the firm and client matters. We cannot comment on specifics regarding any pending federal investigat­ion.”

Rocky Wirtz, an investor in the SunTimes, co-owns the United Center with Jerry Reinsdorf.

† 730 Franklin Building, a commercial building at 300 W. Superior St., filed five appeals to Berrios’ office, at first using Madigan’s law firm and then switching to Flanagan last year.

Twice, Madigan’s firm got Berrios to reduce his initial assessment increases, saving the building’s owners more than $153,317 in real estate taxes.

Flanagan saved them $248,819 in taxes when Berrios scrapped his initial plan to increase the assessment by more than 50% in 2018, instead raising it by just 4%. The building ended up with a tax bill last year of $416,343 — its lowest in three years. Flanagan didn’t return messages. Asked about federal prosecutor­s’ interest in the tax appeals on the property, Madigan’s law partner Vince Getzendann­er said: “We’ve never been contacted. This is our first knowledge of any file being requested. I’m not worried about it.”

† Bob Rohrman Kia, 1100 E. Golf Rd., Schaumburg. The car dealer filed seven appeals under Berrios, who initially planned to increase the assessment on one part of that property by 50% in 2018 and raise the assessment on an adjoining lot by nearly sixfold.

Attorney Thomas Battista filed an appeal, and Berrios sharply reduced his initial assessment increases. That saved Rohrman’s dealership more than $209,000 in property taxes last year, when the business paid $382,622.

“I wouldn’t be able to comment on that,” Battista says. “Nobody’s contacted me.”

In January, the Cook County treasurer’s office sent Rohrman three property tax refund checks totaling $70,085 after another law firm, Amari & Locallo, won three lawsuits to further reduce the dealership’s assessment­s for 2012, 2013 and 2015.

† Gibsons, 1028 N. Rush St., a steakhouse popular with

Chicago’s movers and shakers, has long been represente­d by property tax attorney Michael

Crane, whose nephew Christophe­r Crowley was Berrios’ chief of staff in the assessor’s office.

Crane lost five of the six appeals he filed with Berrios, who agreed to a slight reduction in his assessed value for the restaurant in 2015, shaving $3,693 off the tax bill, which ended up being $88,416.

Crane also got the restaurant refunds totaling $52,244 by going to court and getting judges to agree the assessment­s for 2011 and 2015 were too high.

The property is owned by a Florida company whose lawyer says the restaurant is responsibl­e for challengin­g the property assessment­s and paying the real estate taxes, which totaled $119,003 last year — its lowest in three years. Gibsons chairman Steven Lombardo III and Crane didn’t return calls.

† Erie Cafe, 530 E. Erie St., a steakhouse where Berrios is among the clout-heavy regulars. It was also the site of his retirement party before he left office in December 2018.

During the time Berrios was assessor, Burke’s law firm lost two of the three appeals filed to contest Berrios’ assessment­s for the restaurant, whose tax bill has steadily risen, from $87,042 in 2015 to $176,469 last year.

But Burke did get the restaurant a total of $46,456 in refunds for the restaurant by filing six successful appeals with the Illinois Property Tax Appeal Board since 2012.

Ronald Lenzi, whose family owns the restaurant, says he never discussed his property taxes with Berrios.

“To say that because Joe Berrios is a customer and has been coming here for a while, that we got any preferenti­al treatment would be flat out wrong,” Lenzi says.

† A small apartment building in the 2600 block of West Fullerton Avenue that was sold a year ago by Ald. Felix Cardona Jr. (31st), who worked for Berrios in the assessor’s office, and Cardona’s father.

A few months before the Cardonas sold the property in June 2019, Berrios initially decided on a 45% increase in the assessed value. The Cardonas appealed, and Berrios decided to increase the value by 36%. That gave the Cardonas a $620 break on their taxes, which totaled $4,292 in 2018.

Cardona was Berrios’ director of special assessment­s in the assessor’s office before running for alderman in 2019. He also was the campaign treasurer for Berrios’ daughter, former state Rep. Maria “Toni” Berrios.

A few months before Cardona was elected alderman, the county treasurer issued four checks totaling $4,967 in property tax refunds to “Felix Cardona” after Berrios agreed that the property owner was entitled to senior citizen homestead exemptions between 2014 and 2017.

The alderman says he doesn’t know why federal prosecutor­s want to review the assessment reduction Berrios gave them.

“It was my father’s property,” the alderman says. “I had co-ownership in the property. My dad handled everything.”

† Sixteen properties, including condos, in Bridgeview and Justice owned by Sebastian Jachymiak — the owner of Technicraf­t Collision Repair Experts, a body shop in Justice that provides towing services for several suburbs — and his business partners. Jachymiak has been named in search warrants federal agents served on McCook, Lyons and former state Sen. Martin Sandoval, D-Chicago.

Jachymiak and his business partner Kinga Bartoszek hired former Chicago Ald. Ambrosio Medrano in 2012, seeking to lower their property taxes by appealing the assessment­s Berrios had placed on seven properties. Berrios rejected all of Medrano’s appeals.

In May, Medrano, who has been convicted in three corruption cases, got an early release from his 13-year federal prison sentence, after serving five years, because of the risk posed by the coronaviru­s pandemic.

Jachymiak, Bartoszek and Medrano couldn’t be reached for comment.

† A two-story home in the 6800 block of South Constance Avenue owned by the Rev. Jesse L. Jackson and his wife, Jacqueline.

During the time Berrios was assessor, the Jacksons never filed an appeal to contest the value of their home in Jackson Park Highlands.

In 2018, Berrios lowered the home’s assessed value by about 8.6% when he reassessed the entire city of Chicago. That saved the Jacksons about $1,055 in property taxes.

The county treasurer issued Jackson four checks totaling $1,181 last year because he and his wife had failed to apply between 2014 and 2017 for senior homestead exemptions, small property tax breaks allowed under state law.

But Jacqueline Jackson says she’s perplexed by the interest from federal prosecutor­s in their home: “What would they like to know?”

Rissi Pacheco didn’t think her voice mattered despite attending protests. Pacheco, 30, lived in fear because of her immigratio­n status. But that all changed because of a ceremony that took less than 10 minutes.

“I’ve been wanting to fight full force, but I haven’t been able to because I can’t get arrested,” said Pacheco, who was sworn in this past week as a U.S. citizen. “I’m unleashed.”

But many others hoping to become citizens are stuck in limbo — for some possibly until after November’s presidenti­al election — because of coronaviru­s shutdown-related delays that have helped fuel a big backlog for naturaliza­tion.

Nationwide, more than 700,000 people had pending naturaliza­tion applicatio­ns as of March 31, according to the most recent data available from U.S. Citizenshi­p and Immigratio­n Services. In Chicago, there were 21,977 pending applicatio­ns.

The Chicago figure was down from the same time period in 2018, when 27,238 applicatio­ns were pending. The number of naturaliza­tion applicants denied rose from 479 in the first three months of 2018 to 1,008 in the first three months of 2020, according to USCIS.

It will be almost impossible for those who applied in January to have their applicatio­ns processed in time for the election, said Eréndira Rendón of the Resurrecti­on Project, a community organizati­on that focuses on immigratio­n. Typically, election years see an uptick in these applicatio­ns.

“People may have filed their citizenshi­p applicatio­ns late last year and earlier this year fully expecting to be processed and be sworn in time to vote in November,” said Fred Tsao, the senior policy counsel for the Illinois Coalition for Immigrant and Refugee Rights, an advocacy group. “Having the agency shut down essentiall­y for four months throws a huge wrench into those plans.”

In recent weeks, USCIS has begun conducting smaller and shorter ceremonies, like the one where Pacheco was sworn in, to adhere to social distancing guidelines.

The backlog has prompted Democratic and Republican politician­s to urge the Trump administra­tion to take steps to end the delays to citizenshi­p, some suggesting remote ceremonies, The New York Times has reported.

USCIS also faces a budget crisis that could see as many as 13,000 workers furloughed.

Some delays — such as fingerprin­ting applicants — are directly tied to pandemic restrictio­ns, Tsao said.

But immigratio­n organizati­ons in Chicago say that, over the past few years, the federal agency increasing­ly has demanded more paperwork to prove work or school history in what some think is an effort to slow down the citizenshi­p process. Tsao said some applicants have been asked more than once for the same documents.

The Migration Policy Institute said in a recent report that delays also have been caused by issues with interview notices, longer interviews and government workers asking questions not directly related to citizenshi­p eligibilit­y.

Rosalind Gold, the chief public policy officer for the NALEO Educationa­l Fund, said the processing time for applicatio­ns has increased from six months in 2016 to more than 13 months currently.

In Chicago, some applicatio­ns could take four years to process, USCIS tells applicants.

In Latino communitie­s, research has shown that naturalize­d citizens have higher rates of voter participat­ion than Latinos born in the United States, according to Gold.

“With the right to vote being one of the main reasons that legal permanent residents apply,” she said, “the less newly naturalize­d citizens there are, the [smaller] the pool of eligible voters there would be for upcoming elections.”

Karina Ayala-Bermejo, president and chief executive officer of the Instituto del Progreso Latino, said the pandemic stopped the Chicago organizati­on from continuing to hold forums, at which they used to process hundreds of applicatio­ns. Since the pandemic began, the organizati­on has submitted only 28 citizenshi­p applicatio­ns.

Ayala-Bermejo said many immigrants the group works with also are concerned for relatives because of the uncertaint­y of how changes to immigratio­n policy might affect non-citizens.

“It’s a race to get the family in the most stable immigratio­n position because of all the recent changes and the uncertaint­y of what tomorrow might bring,” she said.

This past Monday in the South Loop, Paul Phillips, the branch chief of customer service for USCIS, wore a mask and gloves as

he wiped down plastic chairs and prepared for a citizenshi­p oath ceremony. The agency used to swear in more than 100 citizens at once. Now, the events are limited to 10 to 35 people because of social distancing.

The federal courts in Chicago, which also can conduct naturaliza­tion ceremonies, hasn’t scheduled any since the onset of the pandemic.

Presiding over the ceremony, Phillips told the group that typically the events are loud and filled with relatives and friends. But they no longer can. And they now skip over videos about American history.

This ceremony was done in just seven minutes.

After leading the group in repeating the oath of allegiance to the United States, Phillips told the gathering, “Congratula­tions, you are now United States citizens.”

And everyone started clapping. Claudia Quintero, 46, of Cary, was among the new citizens. She’d applied in September, hoping to make it easier to apply for graduate school.

“There’s nothing better than to be a citizen of the country where you are living,” said Quintero, who was met after the ceremony by her husband and son.

Pacheco waited eight months to become a citizen. It had taken most of her life to get to that point, in part because she had difficulty paying the required fees. In February, she was told her applicatio­n was approved. Months passed until she got a letter from the agency — which came in late June, on her 30th birthday — informing her about the ceremony.

“I really have been up in the air as to when that would happen, so getting the letter on my birthday really was a surprise,” Pacheco said.

Kha Doan, 32, drove alone from Champaign to Chicago to take part in the citizenshi­p ceremony. He had applied in March 2019, and his applicatio­n was approved about a year later, but COVID-19 caused the agency to close.

“I was thinking maybe I wasn’t going to see citizenshi­p until November or maybe 2021,” Doan said.

As the months passed, he got nervous because his green card would soon expire, and he needed it to hold on to his job in the automotive industry.

Now that he’s a citizen, Doan has his sights set on moving to California and seeking new job opportunit­ies.

Edgar Diaz, 43, of Pilsen, is among those still waiting to become a citizen. He submitted his applicatio­n in February and is waiting for an appointmen­t for an interview and to undergo fingerprin­ting.

He’s hopeful becoming a citizen will open up opportunit­ies to work for the government.

He said he knows the importance of voting. But he’s unsure whether he will be able to vote this year.

“I would hope so, but the process does look delayed,” Diaz said in Spanish.

 ?? RICH HEIN/SUN-TIMES FILE ?? Joseph Berrios on federal investigat­ors’ interest in property tax appeals by law firms that contribute­d to his campaign funds: “It’s news to me.”
RICH HEIN/SUN-TIMES FILE Joseph Berrios on federal investigat­ors’ interest in property tax appeals by law firms that contribute­d to his campaign funds: “It’s news to me.”
 ?? RICH HEIN/SUN-TIMES FILE ?? J.B. Pritzker’s $3.7 million mansion next door to his residence on North Astor Street.
RICH HEIN/SUN-TIMES FILE J.B. Pritzker’s $3.7 million mansion next door to his residence on North Astor Street.
 ?? STATE OF ILLINOIS ?? Gov J.B. Pritzker on Friday: “As I’ve always said, any review will show that all the rules were followed.”
STATE OF ILLINOIS Gov J.B. Pritzker on Friday: “As I’ve always said, any review will show that all the rules were followed.”
 ?? RICH HEIN/SUN-TIMES ?? Ald. Ed Burke (left) and then-Cook County Assessor Joe Berrios at a 2017 Cook County Democratic Party slatemakin­g session at the Erie Cafe.
RICH HEIN/SUN-TIMES Ald. Ed Burke (left) and then-Cook County Assessor Joe Berrios at a 2017 Cook County Democratic Party slatemakin­g session at the Erie Cafe.
 ??  ?? Ald. Felix Cardona Jr.
Ald. Felix Cardona Jr.
 ??  ?? Steve Pearlman
Steve Pearlman
 ?? ANTHONY VAZQUEZ / SUN-TIMES PHOTOS ?? People raise their hand for the oath of allegiance during a socially distanced naturaliza­tion ceremony at the U.S. Citizenshi­p and Immigratio­n Services office at 101 W. Ida B. Wells Drive in the South Loop.
ANTHONY VAZQUEZ / SUN-TIMES PHOTOS People raise their hand for the oath of allegiance during a socially distanced naturaliza­tion ceremony at the U.S. Citizenshi­p and Immigratio­n Services office at 101 W. Ida B. Wells Drive in the South Loop.
 ??  ?? Paul Phillips, branch chief of customer service for U.S. Citizenshi­p and Immigratio­n Services, disinfects seats before a naturaliza­tion ceremony in the South Loop.
Paul Phillips, branch chief of customer service for U.S. Citizenshi­p and Immigratio­n Services, disinfects seats before a naturaliza­tion ceremony in the South Loop.
 ??  ?? Rissi Pacheco
Rissi Pacheco
 ??  ?? Claudia Quintero
Claudia Quintero

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