Cook County state’s attorney approved $2M property tax settlement for Alderman Ed Burke’s client

The office of Cook County State’s Attorney Kim Foxx signed off on a $2 million property tax settlement with the property tax firm headed by Foxx campaign donor Alderman Ed Burke.

Nine months after she took office as the state’s attorney for Cook County, Kim Foxx’s staff approved a $2 million settlement of a property tax appeal of a company represented by the law firm of 14th Ward Alderman Ed Burke, a campaign contributor and fundraiser for Foxx, according to a report in the Chicago Sun-Times.

This was the largest tax settlement Foxx’s office approved during her first 11 months as Cook County state’s attorney, the Sun-Times reported.

The fact that the Cook County state’s attorney effectively sits across the negotiating table from a law firm headed by a powerful alderman who donated to her campaign and held a fundraiser for her is disturbing, but not surprising. It is just one example of a corrupt system that benefits politicians and their law firms and clients, at the expense of ordinary business owners, residents and taxpayers.

The $2 million settlement reached in August 2017 was for property taxes AT&T paid between 2013 and 2015 on the 105-acre Hoffman Estates campus it once occupied. AT&T, through Burke’s law firm, Klafter & Burke, alleged Cook County Assessor Joseph Berrios had overvalued AT&T’s property for three years. Klafter & Burke originally sought a $16 million tax refund for AT&T.

The process

Klafter & Burke specializes in property tax law. The firm’s lawyers petition the assessor’s office for reductions in the assessed value of their clients’ property, which often results in lower property tax bills. If the assessor’s office declines to lower the assessed value for a property owner, the lawyers can take the case to the Board of Review, which can reduce the previously assessed value.

If those steps fail, lawyers can sue the county for a refund of property taxes after they’ve been paid. In Cook County, the Cook County state’s attorney is charged with representing local governments that have already received the tax money; she has sole settlement authority on behalf of those governments, according to the Sun-Times’ report.

Foxx’s office settled more than 5,200 property tax lawsuits during her first 11 months as state’s attorney, according to records obtained by the Sun-Times. This means local governments have to refund nearly $80 million in property taxes they already took in (not counting interest); Chicago Public Schools has to cough up $12 million of this.

The politics

Hundreds of these settlements were reached with “clout-heavy law firms,” including Klafter & Burke and Madigan & Getzendanner, which is headed by Illinois House Speaker Mike Madigan.

Foxx’s spokeswoman told the Sun-Times Foxx had no direct role in settling the lawsuit with Burke’s client, nor does Foxx directly handle any of the appeals cases.

Burke, who has served as a Chicago alderman since 1969, hosted a fundraiser for Foxx at his home weeks before Foxx’s election as Cook County state’s attorney in 2016. Burke also contributed $10,000 to Foxx’s campaign, according to the Sun-Times. During that time, Klafter & Burke was litigating millions of dollars in property tax refunds for clients; the Cook County state’s attorney’s office was on the other side of some of those cases, representing the governmental bodies that would have to pay up if Klafter & Burke’s appeals succeeded.

A December report by ProPublica and the Chicago Tribune exposed the assessment and appeals processes as complicated, opaque and propping up an apparatus that benefits politician-lawyers and businesses that can afford to hire them, at the expense of other business owners, residents and taxpayers.

In the case of the $2 million settlement for AT&T, for example, Barrington School District 220 will absorb $1.1 million of the $2 million loss to Cook County taxing bodies, and Cook County, the village of Hoffman Estates and other entities will pay for the rest of the settlement, the Sun-Times reported. Taxpayers will ultimately be on the hook for any shortfalls caused by the disgorgement of those taxes.

In this system, powerful politicians, who themselves help establish the structure and rates of property taxes, sell their insider knowledge and influence to clients. Those clients then count on the politicians’ law firms to petition offices headed by politicians with whom they have connections, such as Cook County Assessor Joseph Berrios, to get their assessed values, and thus their bills, lowered. And in some cases, these politicians’ law firms are hired to pursue property tax refunds – in which case the party on the other side of the dispute might be represented by the Cook County state’s attorney.

If Cook County is ever to have a transparent and fair property tax system, it must end the current setup that allows politicians to construct a complicated property tax regime, and then sell their influence to navigate it and mitigate its costs. Cook County businesses, residents and taxpayers need reform.