The Chicago law firm headed by Illinois House Speaker Michael J. Madigan, D-Chicago, has been hired to win property-tax cuts for two companies in which his nemesis, Republican Gov. Bruce Rauner, has a financial stake.
That’s among a wide range of personal business interests disclosed by the two powerful politicians, who are at the center of a 10-month state budget impasse that’s hurt social service agencies, universities, homeless shelters and state vendors waiting to be paid, a Chicago Sun-Times analysis found.
The political enemies also have had business dealings with companies receiving taxpayer money through state contracts or grants, as well as with companies and individuals contributing to their campaign funds, state and Cook County records show.
Take the Chicago Board Options Exchange, which has contributed $20,000 to Madigan’s main political campaign committee since 2012 and whose executives have given $8,000 to Rauner’s campaign since 2013.
In his state financial disclosure statement filed April 29, Rauner reported receiving income last year from his investment in CBOE Holdings, the exchange’s holding company. This year, Madigan’s firm, Madigan & Getzendanner, won a 23 percent reduction on the property assessment for the CBOE building at 400 S. La Salle St., records show. The amount of tax savings the exchange will realize won’t be known until late this summer, after tax rates are calculated.
Then, there’s The PrivateBank. Rauner reported he earned income from the bank’s parent company, PrivateBancorp Inc., in 2015. Madigan’s firm won property-tax reductions last year on PrivateBank locations throughout Cook County, including $48,907 in savings for an Orland Park branch.
In all, Rauner disclosed financial interests in more than 120 companies and investment funds in 2015. His income totaled $58 million in 2014, according to IRS documents he released last fall.
Madigan’s law firm, Madigan & Getzendanner, has won property-tax reductions — some reaching six figures — for hundreds of properties, according to his financial disclosure statement and data from the Cook County assessor’s office. Firms like Madigan’s typically are paid a percentage of the savings they win. The speaker doesn’t disclose his tax returns.
The statements filed by Rauner, Madigan and other state legislators and officials don’t require them to reveal how much money they make. Rather, they disclose entities in which they hold ownership “in excess of $5,000,” receive a “capital gain of $5,000 or more” or get dividends or income “in excess of $1,200.”
Rauner spokeswoman Catherine Kelly said the governor doesn’t know how his investments perform because such “decisions are made pursuant to blind-trust procedures adopted when the governor took office. We are purposely screened from such information.”
Madigan spokesman Steve Brown said the speaker “has imposed requirements on the law firm and himself, beyond what is required by the law, to ensure ethical conduct,” rejecting “any potential client seeking a state benefit” and refusing to intercede with any state agency on behalf of clients.
Among the two state leaders’ other holdings:
• Rauner received income through his investment in Digital GreenSigns, a billboard company that got a permit in February from the Illinois Department of Transportation — run by one of the governor’s cabinet members — for a billboard along the Tri-State Tollway / Interstate 294 just south of Lake Street in Northlake.
Digital GreenSigns provided Rauner with $263,943 worth of free campaign advertising in 2014, including ads that appeared on 90-square-foot digital signs the company put up around Chicago before Mayor Rahm Emanuel’s administration imposed strict regulations limiting where the signs can go and how big and bright they can be. Many of those free ads attacked Rauner’s opponent, former Gov. Pat Quinn.
Digital GreenSigns also has digital billboards in the suburbs, including a 20-year deal to operate a sign on the public works building in Oakbrook Terrace.
Kelly said Rauner is “a passive, minority investor in companies like Digital GreenSigns. . . . He has not contacted and would not contact IDOT or any other state agency on behalf of any of the companies in which he is invested.”
• Madigan’s clients include Bickerdike development and Senior Lifestyle Corp. Each has gotten grants from the Illinois Department of Commerce and Economic Opportunity to install energy-efficient equipment in developments with low-income residents.
Senior Lifestyle has gotten a total of $825,136 from the state agency since 2010, including $91,960 for the Senior Suites of Midway Village in Chicago. Madigan saved that development, at 6800 S. Keating, a total of $113,156 in property taxes last year by getting its assessed value cut by 72 percent, records show.
Bickerdike — among the developers set to transform the Lathrop Homes under a deal with the Chicago Housing Authority — has gotten nearly $1.3 million from the state commerce department since 2008. This year, Madigan & Getzendanner has gotten cuts totaling 13 percent in its assessments on more than two dozen properties in Chicago. Bickerdike’s exact savings won’t be known until the final tax bills are mailed this summer.
• Rauner owns stock in and received income from GlaxoSmithKline and Novartis, both which have been selling pharmaceuticals to the state for years. In the 2015 budget year, the state’s public health department paid GlaxoSmithKline $3.1 million and Novartis $410,600.
Rauner also has membership and partnership interests in 11 investment funds operated by the financial firm he formerly headed, GTCR, which has long managed state pension money.
• One of the speaker’s biggest campaign contributors — printing magnate Fred Eychaner — regularly hires Madigan’s law firm to help him get cuts in property taxes on a Streeterville parking garage, part of which operates beneath Ogden Plaza Park under what had been a $10-a-year lease with the Chicago Park District.
Then-Mayor Richard M. Daley’s administration sued to break the deal in 2010, saying it was costing the city hundreds of thousands of dollars a year. But a Cook County judge sided with Eychaner in 2013, ruling the park district struck the deal with a previous owner who agreed to donate acres of land to the city. The judge also decided Eychaner doesn’t have to pay the park district anything. Madigan’s law firm didn’t represent Eychaner in the park district case.
Charley Gross, who oversees Eychaner’s business ventures, said the previous garage owner had hired Madigan’s firm to handle property-tax appeals, and Eychaner didn’t change attorneys. This year, Madigan won a 44 percent cut in the garage’s assessed value. In 2014, he won a $61,091 property-tax refund for the garage stemming from a lawsuit he filed over tax payments for 2009.
Eychaner has contributed more than $400,000 to Madigan-controlled campaign funds since the start of 2010.
• Rauner’s holdings include investments with several companies whose executives have become top political contributors. Among them: Chicago hedge-fund magnate Ken Griffin and other top executives in his firm, Citadel LLC, who have contributed $13.6 million to his campaign.
• Rauner and Madigan both have business dealings with Chicago-area newspaper owners.
Rauner reported receiving a capital gain from an investment in Merge Healthcare, which IBM bought last year for more than $1 billion. Merge’s chairman, Michael W. Ferro Jr., has since become the largest shareholder in Tribune Publishing, owner of the Chicago Tribune. Ferro and other investors bought the Chicago Sun-Times in 2011. He has since given his shares to an unnamed charitable trust, according to Securities and Exchange Commission filings. Ferro’s wife, Jacky Ferro, contributed $5,300 to Rauner’s campaign in 2013.
Madigan’s law firm for years has handled property-tax appeals for Paddock Publications, which publishes the Daily Herald. Last year, Madigan’s firm won cuts in the assessment on the company’s printing plant in Schaumburg of 18 percent, saving it $46,194 on its property taxes.
• Both have financial ties to well-known companies. Rauner is an investor in the Chicago Bulls, Pittsburgh Steelers and Nestle. Madigan’s clients include the Palmer House Hilton and Aqua skyscraper.
• Rauner is an investor in Pangea Properties, which the Sun-Times and Better Government Association reported last month is the largest landlord in Chicago of low-income Section 8 voucher-holders. Pangea also leases office space to state Rep. Ken Dunkin, a South Side Democrat who, after siding with Rauner in disputes with Madigan, lost the Democratic primary in March to Juliana Stratton. Over the past two years, the state has paid Pangea $11,777 to lease Dunkin’s offices.