Game of thrones? Watchdog sees ‘scheme to defraud’ in Pritzker toilet tax break
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Cook County’s chief watchdog has concluded that more than $330,000 in property tax breaks and refunds that Democratic gubernatorial candidate J.B. Pritzker received on one of his Gold Coast mansions — in part by removing toilets — constituted a “scheme to defraud.”
Cook County Inspector General Patrick Blanchard also recommends in the confidential report that Cook County should try to recover the money from the billionaire.
Asked whether he would repay his tax savings, Pritzker on Monday afternoon said only, “We’re going to follow whatever the recommendations, whatever it is.”
The bombshell report comes just weeks ahead of a contentious November election, with polls showing Pritzker ahead by double digits. Pritzker — an entrepreneur and philanthropist — has been defending the tax break for more than a year, and he’ll likely have to do it again on Wednesday as he faces Gov. Bruce Rauner in their second televised debate.
The Chicago Sun-Times reported last year that Pritzker bought the historic mansion next door to his home, let it fall into disrepair — and then argued it was “uninhabitable” to win nearly $230,000 in property tax breaks.
The toilets had been disconnected, and the home had “no functioning bathrooms or kitchen,” according to documents Pritzker’s lawyers filed with Cook County Assessor Joseph Berrios.
But the Sept. 28 inspector general’s report found that Pritzker actually saved more — $331,432.03.
Blanchard writes in the report — obtained by the Sun-Times — that the assessor’s office was “the victim of sworn affidavits containing false representations.
“The evidence indicates that the use of these affidavits was part of a scheme for obtaining money by means of false representations and, in executing the scheme, the responsible parties caused checks to be issued by the Cook County Treasurer and delivered by U.S. Mail according to the direction thereon.
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“As a result, the County ultimately fell victim to a scheme to defraud, executed in part through the use of affidavits, and which resulted in the property owner ultimately receiving property tax refunds totaling $132,747.18 for the years 2012, 2013 and 2014, as well as additional tax savings of $198,684.85 for the years 2015 and 2016,” the report states.
Following a campaign event with Hillary Clinton in River North, Pritzker complained that the report had been leaked for “clearly political purposes” in the last month of the campaign.
But he sidestepped questions about whether the toilets had been removed for the purpose of lowering his assessment, sticking to the same talking points he has since the Sun-Times report last year.
“I’ve been saying all along that there are flaws in the property tax system,” Pritzker said. “We followed the rules.”
Pritzker said he has restarted the remodeling project on the house and no longer takes the tax cut for the property being uninhabitable.
Rauner’s campaign said the report “proves what we knew all along — JB Pritzker is a fraud.” Campaign spokesman Will Allison called what Pritzker did “fraudulent tax dodging” and proof that Pritzker “lied to voters.”
Labeled “Evidence of a plan to Defraud Cook County,” the report includes a work-order email dated Oct. 5, 2015, from a project manager to a plumbing company vice president that says M.K. Pritzker, J.B. Pritzker’s wife, wanted the toilets pulled.
“She is going to have the house re-assessed as an uninhabitable structure,” the email says. “To do this, she would like to have us pull all toilets and cap all toilet lines in the house. 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 (she will then be finishing out the front room for JB’s [Jay Robert ‘J.B.’ Pritzker’s] hangout/meeting area].”
The project manager that the Pritzkers hired told inspectors that M.K. Pritzker did specifically mention “reassessed” during a meeting, according to the report.
“When asked if it was clear that M.K. wanted to have all the toilets removed because it was related somehow to the home being ‘reassessed,’ the B&A Project Manager replied. ‘She did note those two areas together,'” the report says.
The toilets were removed on Oct 6, 2015, with no directive to reinstall them. A ticket from the plumbing company notes five toilets were pulled, with the five toilet supply lines also capped, along with additional gas lines disconnected and additional work.
The appraisal firm’s president said “he was unaware the toilets were removed about 10 days prior to their inspection of the property on October 15, 2015.” He also told inspectors he had been informed the toilets were in place on Jan. 1, 2015. He said the home was “unoccupied but functional and it could be habitable.”
There were two affidavits signed that said “the property has been vacant and uninhabitable from January 1, 2012 to present. There are no functioning bathrooms or kitchen.” That was signed on Oct. 15, 2015.
One was signed by Tom Muenster, J.B. Pritzker’s brother-in-law. Another was signed by Christine Lovely, who is identified in the report’s footnotes as M.K. Pritzker’s personal assistant.
Asked whose idea it was to take out the toilets, the Pritzker campaign told the Sun-Times the property was purchased with plans to renovate. The campaign said “counsel” led the reassessment, provided advice on steps and “drafted affidavits that were signed by knowledgeable individuals and submitted as part of the reassessment.”
Contributing: Mark Brown