A novel approach to receiving a property tax break didn’t flush Gov. J.B. Pritzker’s chances at winning the 2018 election down the toilet, but there’s a chance it could sink his hopes of amending the state constitution to allow for a graduated income tax.
WBEZ revealed Wednesday that the U.S. Attorney’s Office has an open investigation into Pritzker, First Lady M.K. Pritzker and her brother, Thomas Muenster, citing a “law enforcement source familiar with the investigation.”
“I’m very confident that any review of this matter will show that all the rules were followed. I have not been contacted by any law enforcement. Neither has M.K.,” Pritzker said, in response to reporters’ questions at an unrelated event Wednesday.
The feds appear to be looking into whether the Pritzkers broke the law when they petitioned the Cook County Assessor’s office to lower the value of an Astor Street mansion by claiming it to be “uninhabitable” in part because there were no working toilets.
It worked, and the vacant mansion’s assessed value slid from roughly $6 million to about $1 million, leaving the Pritzkers to pay some $300,000 less in property taxes.
A leaked report from the Cook County inspector general found that M.K. Pritzker had ordered workers to remove the toilets, and described the endeavor as a “scheme to defraud” local taxpayers.
The mansion in question is next to the home the family lives in.
Pritzker said he has “no concerns at all” that the investigation will lead to criminal charges.
But the revelation comes at a pivotal time for Pritzker, who has waged his political future on passage of a constitutional amendment that would allow Illinois to set different tax rates for different income levels; as-is, individuals must all be charged a single tax rate, regardless of income.
Legislators will return to Springfield next week, and Pritzker has a goal of getting the proposed constitutional amendment approved by three-fifths of the members of the House and Senate prior to the General Assembly’s May 31 adjournment.
Pritzker, a billionaire, has repeatedly said that “it doesn’t make sense that I pay the same rate as a teacher or first responder” and that the wealthy should step up to the plate in solving Illinois’ significant fiscal challenges.
A business-backed dark money organization fighting the proposed graduated income tax, Ideas Illinois, is calling on Pritzker to drop his push for the amendment.
“He can't expect people to pay more when he is reportedly under criminal investigation for gaming the system to pay less,” Ideas Illinois chairman Greg Baise said in a statement. “The governor likes to call his push for more taxes ‘fair’ but it's clear he knows nothing about fairness or equity - he needs to drop his push for this Jobs Tax that will only hurt middle class families even further."
Pritzker did not directly respond when asked whether he believes the investigation to be political, but he said that “opponents” to what he calls his “fair tax” plan “haven’t been telling the truth.”
The Democrat pushed back on the notion that the probe – which has garnered national headlines – will hinder his ability to get lawmakers to pass his “fair tax” and budget, which relies on controversial changes like legalizing sports betting and recreational marijuana.
“Look these are about values about working families. That’s why I think all these things will pass,” he said. “We all want a balanced budget, that’s what we’ve proposed. We all want to get passed the terrible fiscal challenges and put ourselves on firm fiscal footing for the future and that’s why we’ll get this done.”
Some see the timing of the unnamed law enforcement agent’s leak to WBEZ as circumspect.
The federal investigation apparently began in October – notably in the throes of Pritzker’s battle against then-Gov. Bruce Rauner.
Pritzker easily bested Rauner in November’s election, but not before Rauner and his surrogates had made a public issue of portraying Pritzker as a “porcelain prince” tax-dodger. And the seven Republican members of Illinois’ Congressional delegation at the time all sent U.S. Attorney John Lausch – who’d been nominated by President Donald Trump to the powerful post – a letter asking that he initiate a probe.
“The facts described in the Inspector General’s report appear to constitute fraud and perjury. Since the improperly-obtained refund checks were sent to Mr. Pritzker through the U.S. Mail, a violation of 18 USC 1341 (the Federal Mail Fraud Statute) may have occurred,” the letter reads. “Illinois, perhaps more than any other state, has suffered greatly due to public corruption. Four of Illinois’ last nine governors have gone to prison. It is important to send a strong signal to the people of Illinois that no one is above the law, not even billionaires running for Governor. For that reason, we urge you to fully investigate this matter with all due speed.”
Follow Amanda Vinicky on Twitter: @AmandaVinicky