“We followed the rules.”
That's what Democratic candidate for governor J.B. Pritzker said before he decided to repay $330,000 in property tax breaks he received that an inspector general's report described as a "scheme to defraud" taxing authorities.
Pritzker has been dogged by the specter of those toilets for months. The phrasing used in the leaked report suggests criminal wrongdoing and Republicans have asked the U.S. Attorney’s Office for the Northern District of Illinois to investigate. It would be enough to sink a lesser candidate in another state. But this is Illinois and the latest poll has Pritzker 22 points ahead of incumbent Gov. Bruce Rauner, who's widely seen as the most vulnerable Republican governor in the nation.
No one likes paying property taxes, and smart people with money often take steps to reduce their taxes. But what Pritzker and his wife did with the toilets in their second Gold Coast mansion is something else entirely.
Cook County Inspector General Patrick Blanchard called it a "scheme to defraud" built on "false representations" in the report. From interviews and emails in the report, it's clear that pulling out the toilets just before the inspection was purposefully deceptive to reduce how much Pritzker owed in property taxes.
“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," the report says. “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,”
Contractors working on the house knew the plan, according to emails included in the report. M.K. Pritzker, J.B. Pritzker’s wife, wanted the toilets gone.
“She is going to have the house re-assessed as an uninhabitable structure,” the email said. “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.”
Pritzker has said he'll give Cook County the money back. Rauner's campaign team compared that to a bank robber returning the loot. Not exactly, but point taken.
The report doesn't make Pritzker a more appealing candidate. But anyone who's heard him on those FBI tapes with former Illinois Gov. Rod Blagojevich already had an idea about Pritzker's character and ambitions. At the same time, Pritzker's toilet trouble doesn't make Rauner a more attractive candidate on his own merits.
What the report does is highlight just how easy it is to get one past Cook County Assessor Joseph Berrios' office. Easy for some people, at least.
The Pritzkers bought the 6,387-square-foot home – it was next to their even larger home – for $3.7 million. Then, they turned around and gave the Assessor's Office an appraisal saying the smaller home was worth $2.5 million and sworn affidavits that said it wasn't fit for habitation.
In the report, Blanchard wrote, "under the current system, there is a lack of any potential for deterrent or identification of false affidavits used to support property tax refund requests."
Blanchard further noted concerns that employees at the Cook County Assessor's Office seemed to be winging it.
"Based on the information provided, there appears to be an overall lack of internally developed, written assessment policies and procedures," Blanchard wrote. "This raises questions about how the CCAO can assure consistency in the assessment process."
Property taxes in Cook County – and across Illinois – are way too high to be based on "word of mouth" and "past practices" in the assessor's office.
Knowing that the underlying assessment system is junk makes paying unnecessarily high property taxes even more unpalatable. Especially when billionaires get tax breaks that then have to be paid for by everyone else.
The U.S. Attorney’s Office for the Northern District of Illinois must investigate Pritzker. And before this can happen again, the assessor's office needs a complete overhaul.