Madigan’s millions: Why the speaker should release his tax returns
Every dollar Madigan earns back for his corporate clients makes someone else’s property-tax bill go up.
Illinois House Speaker Mike Madigan is a man of few words.
He prefers to project his power quietly: By drawing the legislative map. By controlling how a bill becomes a law. And by making millions of dollars lowering property-tax bills for clients of his law firm: Madigan & Getzendanner.
In this line of work, political connections are priced at a premium. Illinois politicians are not required to release their tax returns. But Madigan is a different animal. The nature of his business demands extreme transparency. And he has never publicly disclosed his tax returns.
“There’s no purpose for it,” Madigan spokesman Steve Brown told the Chicago Sun-Times in 2015.
But as the nation’s highest property taxes crush Illinois homeowners, voters deserve to know Madigan’s cut of the property-tax appeals racket.
The tax appeals game
Madigan started his six-man law firm in 1972, immediately after he was first elected to the Illinois House. It operates exclusively in Cook County, appealing property taxes for some of the most valuable properties in Chicago.
The property-tax-assessment process in Cook County is convoluted by design. But here’s how it works in simple terms:
First, the Cook County Assessor’s Office assesses the value of every property in the county. The value of any given property is reassessed once every three years. This “assessed value” is then used to calculate the property taxes each property owner owes.
Property owners can then appeal that assessed value in a number of ways. They can file a request with the assessor asking for a reduction, appeal the valuation to the Cook County Board of Review, file a lawsuit in which a judge will decide the value, or the property owner and the Cook County State’s Attorney will enter into a settlement agreement over the value.
Flawed property valuations and the process required to fix them are a cash cow for politically connected law firms, including those of Madigan, Chicago Alderman Ed Burke, Senate President John Cullerton and state Rep. Robert Martwick.
They know what strings to pull.
These law firms handle the ways in which the assessed value of a property is appealed: the request with the assessor, the appeal to the Cook County Board of Review and lawsuits.
Conflict of interest
The man in charge of the property valuations so crucial to Madigan’s business is Joe Berrios, the Cook County assessor (a position he attained in 2010 with the help of Madigan’s political workers). Madigan, in turn, is crucial to Berrios’ side gig as a Springfield lobbyist. Berrios also serves as the Cook County Democratic Party chairman. Madigan is the chairman of the Illinois Democratic Party.
The setup reeks of cronyism. It doesn’t help that Madigan has never fully disclosed his sources of income.
But the House speaker gave a clue regarding his earnings in 2015, when a reporter asked him whether he’d be subject to a proposed millionaire’s tax.
“Do I make a million dollars in a year? … In a good year I would be subject to this [tax],” he said.
Every dollar Madigan earns back for his corporate clients makes someone else’s property-tax bill go up. It falls on the shoulders of Cook County residents not savvy enough to hire a politically connected law firm to appeal their property taxes, or who refuse to play the game altogether.
As the most powerful lawmaker in Illinois, Madigan should be fighting to address the most pressing tax issue for the state’s middle class. Instead, he spends his time cashing in on a broken system.
When questioned about the conflict of interest, Madigan tends to double down. “I go to great lengths to make certain there is a clear division between my law practice and my actions as a public official,” he said last year.
Madigan’s track record tells a far different story.
A sordid history
“You’ve heard of double-dipping,” then-Chicago Mayor Jane Byrne told the Chicago Tribune in 1979. “He was triple-dipping,” she said of Madigan. He was working as a well-compensated attorney for two of Chicago’s largest pension funds while also serving as a state lawmaker and Democratic committeeman.
When the Illinois General Assembly passed a $60 million bailout for McCormick Place in 1985, many called into question Madigan’s relationship with a team of clout-heavy developers who did extensive construction work for the convention center. Madigan swore his law firm’s past work for the developer’s principals would “in no way bear upon my considered judgment on the merits of the bill at hand.”
Starting to see a pattern?
In 1989, after parlaying his legal work into a stint as a Chicago City Council lobbyist, Madigan persuaded aldermen to give one of his clients a 30-year extension on a lease of the Hilton Hotel at O’Hare Airport. The Tribune editorial board described the deal as “one of the more extraordinary, brazen giveaways ever proposed in the city’s history.” Madigan’s law firm received $85,000 for the lobbying work, or $165,000 in today’s dollars. He also got paid to represent the client when the city sued to get rid of the contract.
If you think Madigan has put this sort of behavior behind him, you’d be wrong.
In 2014, the Sun-Times found Madigan’s law firm saved a group including Mesirow Financial Services more than $1.7 million in property taxes. That company employs Madigan’s son and manages state pension funds.
A sweeping 2015 Chicago Tribune investigation found even more overlap:
“As a public official, [Madigan] got a private road behind a shopping mall repaved, helped secure state funding for an expanded tollway interchange and intervened for a developer looking for state cash. In each case, Madigan was a private lawyer for businesspeople who stood to benefit,” the report found.
“[Madigan & Getzendanner] represents banks the state regulates, investment houses that have overseen billions of dollars in public pensions, developers who want roads – all subject to decisions made by a state House in the firm control of their tax lawyer.”
Madigan lacks just as much respect for Illinoisans who expect honest public service as he lacks solutions for the state’s property-tax crisis.
If history is any judge, Madigan’s political career is built not on bold ideas, but the betterment of his own bottom line.
No wonder he’s loath to let Illinoisans peek behind the curtain.