Tax Probe Shadows Illinois Governor as Term Gets Underway

(Bloomberg) -- Illinois Governor J.B. Pritzker, his wife and his brother-in-law are under federal criminal investigation for a property tax appeal that came up during Pritzker’s 2018 campaign, Chicago public radio station WBEZ reports, citing an unidentified law-enforcement source.

There are no signs that criminal charges are imminent, the station reported. The probe is related to the billionaire Democrat’s pursuit of a property tax break on a 126-year-old mansion he and his wife, M.K. Pritzker, bought next to their Chicago home.

“Let me be clear that I’m very confident that any review of this matter will show that all the rules were followed,” Pritzker told reporters at an unrelated event in Chicago on Wednesday. “I have not been contacted by any law enforcement, neither has M.K.”

A Cook County inspector general’s report, first published by the Chicago Sun-Times in 2017, found that Pritzker’s wife told workers to remove toilets from the mansion to have it declared uninhabitable, enabling a big property tax break. Her husband was elected governor in November and took office in January.

The report also found that M.K. Pritzker’s assistant, Christine Lovely, and the governor’s brother-in-law, Thomas J. Muenster, made “false representations” on tax appeal documents, WBEZ reported.

Illinois governors have a history of drawing the attention of law enforcement. Since the 1970s, four of them have been jailed for white-collar crimes, including Rod Blagojevich, who was convicted for crimes centered around his alleged effort to auction off the U.S. Senate seat left vacant when Barack Obama won the presidency. But Pritzker expressed no concern about the property-tax issue, which he said was already raised during his run for office.

‘No Concerns’

“My opponents raised this issue, and it became a political subject last October,” Pritzker said at the Wednesday event, adding that he has “no concerns” that there will be criminal charges stemming from the investigation.

Instead, he is “laser focused” on his current job responsibilities, Pritzker said. “We have many bills that are focused on lifting up working families.”

The news may be a distraction for Pritzker as he gears up for the last five weeks of the spring legislative session. The governor is pushing an aggressive agenda, including a plan to amend the Illinois Constitution to jettison the state’s flat income tax in favor of one that sets rates based on income.

Pritzker is also seeking to plug a more than $3 billion deficit in part with a mix of new taxes, including those from legalizing recreational marijuana. The worst-rated state needs the additional revenue as it faces chronic budget shortfalls, a shrinking population and $134 billion of unfunded pension liabilities that has left it with a near junk-bond rating.

A lawyer representing the Pritzkers told the radio station that his clients did not engage in any wrongdoing and haven’t been contacted by law enforcement about the tax appeal. A lawyer for Lovely declined to comment, and Muenster did not respond to WBEZ’s request for comment.

A spokesman for U.S. Attorney John Lausch declined to comment, the station said.

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