Pritzker Toilet Removal Was Scheme To Defraud: Inspector General

CHICAGO — J.B. Pritzker, the billionaire front-runner for Illinois governor, cannot seem to get away from his toilets, but it’s not because of something he ate.

According to an inspector general’s report, the Democratic gubernatorial nominee engaged in a “scheme to defraud” Cook County taxpayers between 2012 and 2016 by removing the toilets from one of his multi-million dollar Gold Coast mansions in order to get it declared “uninhabitable.”

In order to obtain more than $331,000 in tax breaks, Pritzker’s representatives filed sworn statements containing false claims, according to a summary of an investigation by Cook County Independent Inspector General Patrick Blanchard dated Sept. 28 and obtained by the Chicago Sun-Times.

As the Sun-Times first reported last May, Pritzker purchased a $3.7 million mansion in 2007 next door to a North Astor Place mansion he purchased the year before for $14.5 million. Pritzker spent an additional $11 million to $25 million on improvements on the larger house, but the Cook County Assessor’s Office lowered its assessment by $2 million on appeal. According to the Sun-Times, the assessor’s office used an appraisal provided by Pritzker and never entered the home claiming security concerns.

As a result of a rehab of the smaller house, Pritzker’s lawyers managed to convince the assessor’s office to reduce the assessed value of the home from $6.25 million to $1.1 million. Not only did he see reduced tax bills, he wound up getting three refund checks from the county for more than $130,000, the Sun-Times reported.

Following the report, which also questioned whether Pritzker’s relationship with Cook County Assessor and Cook County Democratic Party Chair Joe Berrios may have helped cut taxes, the Office of the Independent Inspector General opened an investigation. The inspector general did not identify any credible evidence that the relationship between Berrios and Pritzker allowed for the tax relief.

As part of the investigation, Blanchard obtained an email correspondence between the project manager for the contractor performing work on the smaller Astor Street mansion and a vice president for the plumbing company that removed the toilets.

“[Mrs. Pritzker] is going to have the house re-assessed as an uninhabitable structure. To do this, she would like to have us pull all the toilets and cap the toilet lines in the house,” it said. “Then after the assessment, she would like us to put the 1st Floor toilet back in and have this as the one functioning bathroom in the place.”

The Pritzkers then commissioned their own appraisal of the home and submitted affidavits from J.B. Pritzker’s brother-in-law and his executive assistant claiming the house was uninhabitable. One of those sworn statements, which the inspector general’s report identified as false, was notarized by J.B. Pritzker’s own executive assistant.

The report indicates the assessor’s office took the Pritkzers’ claims at face value, noting there is little deterrent to submit false statement to get property tax refunds. It quotes the deputy assessor for valuations and appeals, a position held by Thomas Jaconetty, saying Berrios’ office must rely on whatever is submitted.

“There are remedies against a person who give a false affidavit, and that’s perjury. And so that is policed by the State’s Attorney’s Office,” the deputy said. “There’s a process for that.”

The spokespeople for the Pritzker campaign did not respond to questions about whether Pritzker has refunded any of the funds obtained through the scheme described in the inspector general’s report, or whether he believes anyone submitted an affidavit on his behalf containing false representations, as the report describes. Late Tuesday, the campaign said the money was “in the process” of being returned.

After a campaign appearance with Hillary Clinton Monday, Pritzker suggested the release of the report, which was sent to Cook County officials Sept. 28 and published by the Sun-Times Oct. 1, was politically motivated. He repeatedly described the report as “leaked” and “confidential” but did not dispute any of its findings.

“We went through the process that other people do and there’re clearly flaws in the system that people go through. But we sought it with all the rules in place, we knew what the rules were, we followed the rules,” Pritzker told reporters.

“We always abide by the law,” he said, promising to follow any recommendations from the county watchdog. “We’ve got to root out the flaws in the system, so I hope they do figure out what the challenges are.”

Pritzker’s campaign did not respond to a request to clarify what specific “flaws” in the system were involved and whether the Democratic nominee was suggesting he was right to exploit those unspecified flaws.

Blanchard’s report recommends the assessor’s office take a closer look at multi-million dollar homes seeking tax relief and hire adequate staff and qualified appraisers to review submissions.

Berrios is leaving office as assessor in January after multiple reports found his office effectively transferred vast amount of wealth from the poorest property owners to the richest. In a court case resulting from the assessor’s office improper denial of public records request, staffers in Berrios’ office testified earlier this year they would sometime use online real estate websites like Zillow and Trulia to help set property values.

Gov. Bruce Rauner’s campaign, which has aired multiple ads focusing on Pritzker’s property tax-related plumbing decisions – one of which calls Pritzker the “porcelain prince of tax avoidance” – responded quickly to the Sun-Times report.

“This Inspector General report proves what we knew all along – JB Pritzker is a fraud. From the very beginning, Pritzker was devising a corrupt scheme to defraud Illinois taxpayers by ripping toilets out of his mansion,” said Will Allison, the communications director for Rauner’s campaign. “This wasn’t a standard appeal as Pritzker claimed. Instead, he lied to voters. It’s clear from Pritzker’s repeated use of fraudulent tax dodging that he doesn’t have the character and integrity to be governor.”

Illinois Sen. Sam McCann, running for governor as a member of the Conservative Party he founded last year, called on Pritzker to pay back the $330,000 in property tax that he “dodged.”

“Illinois’ history of corrupt governors is the laughing stock of the nation, and the last thing we need is another punchline governor connected with a ‘scheme to defraud’ the system that the rest of us are forced to live by,” McCann said. “There are two tax systems in Illinois – the one that J.B. Pritzker and his billionaire buddies abuse, and the one by which ordinary Illinoisans like you and me pay for their tax breaks.”

Pritzker, a billionaire heir to the Hyatt Hotel fortune and longtime Democratic Party fundraiser who has never held elected office (although he ran in the Democratic Party primary for the 9th Congressional District, finishing third of three candidates), extended his record-breaking self-financing in the days ahead of the release of Blanchard’s report, according to Illinois State Board of Elections filings.

On Sept. 25, Pritzker gave his campaign another $20 million, bringing the total amount of his personal fortune he has put into his quest for the governor’s mansion to more than $146.5 million. That’s more than $30 million more out of his own pocket than was spent by all candidates in the 2014 election.

Two days later, his campaign kicked in $1 million to the Democratic Party of Illinois, chaired by House Speaker Mike Madigan. JB For Governor also gave $600,000 to the Rock Island County Democratic Party, bringing his total contributions to the committee to $2.6 million. The Rock Island Democrats are chaired by Doug House, who also heads up the Illinois Democratic County Chairmen’s Association. Also on Sept. 27, the day before the inspector general’s report, Pritzker gave another $500,000 to the Illinois Democratic Heartland Committee, chaired by Senate President John Cullerton, according to the Illinois State Board of Elections.

Rauner and Pritzker meet for their second of two televised debates Wednesday in Chicago before a final debate next Thursday in Quincy. Pritzker, who polls show with a 17-point lead, declined invitations to debate on the public television station WTTW or meet with the Chicago Tribune editorial board.

Read more from the Chicago Sun-Times »

Read report from independent Inspector General Patrick Blanchard:

Top photo composite: J.B. Pritzker on Oct. 1 in Chicago (Joshua Lott/Getty Images) and a Gold Coast mansion owned by JB Pritzker (Street View)

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