Thursday, May 5, 2016

WATCHDOGS: The Donald & the Democrat; Burke saved Trump $11.7M



WATCHDOGS: The Donald & the Democrat; Burke saved Trump $11.7M
Ald. Edward M. Burke, left, with Republican presidential front-runner Donald Trump at the City Club of Chicago last June. AP file photo
Chicago 04/30/2016, 10:00pm
Tim Novak and Chris Fusco

A law firm headed by Ald. Edward M. Burke, one of Chicago’s most powerful Democrats, has helped Republican presidential candidate Donald Trump and investors in his luxury downtown hotel cut their property taxes by 39 percent over seven years, saving them $11.7 million, a Chicago Sun-Times analysis has found.

Burke — one of 47 Chicago aldermen who voted to approve development of Trump International Hotel & Tower in 2002 — won reductions in six of the seven years for the hotel, retail and other commercial space in the skyscraper, records show.

Now, Burke’s law firm, Klafter & Burke, is trying to get partial refunds of those taxes for the billionaire and his investors. The firm has filed appeals in court and to a state agency, arguing the taxes paid were too high in some years.

Burke is among an elite group of current and former Chicago politicians working for law firms that specialize in helping property owners navigate Cook County’s arcane property-tax system. These clout-heavy lawyers try to persuade other elected officials — the Cook County assessor, the Cook County Board of Review’s commissioners and judges — to lower the estimated values of buildings and other real estate.

When they succeed, that means lower property taxes for their clients — and higher bills for other property owners to make up the difference. The attorneys generally work for a percentage of the savings.

Trump first hired Burke’s law firm in 2006, according to a spokeswoman for Trump Hotels.
Trump Tower, 401 N. Wabash Ave. | Rich Hein / Sun-Times

Trump didn’t respond to questions about how much he pays the Southwest Side ward boss or why he chose him over other property-tax lawyers.
Burke declined to comment.

Burke — a law school classmate of former Mayor Richard M. Daley and a former Chicago cop — replaced his late father as 14th Ward alderman in 1969.

Representing a predominantly Hispanic ward at City Hall, he has amassed a $10.4 million political war chest. He’s used that to bankroll the campaigns of politicians including former Gov. Pat Quinn and Cook County State’s Attorney Anita Alvarez — whose office ends up working against Burke when he sues county officials seeking lower property taxes for Trump and other clients.

Burke, 72, also is a powerful member of the Cook County Democratic Party, overseeing the committee that decides which lawyers the party endorses for judge.

In 2001, Trump decided to redevelop a coveted site on the Chicago River where the Sun-Times had operated in a seven-floor building since 1958. Originally, he was an equal partner with Hollinger International, the newspaper’s owner at the time. Trump eventually bought full control of the site amid a federal Securities and Exchange Commission investigation of Hollinger chairman Conrad Black, who ended up in prison for looting the company.

The 92-story residential and commercial skyscraper was under construction when Burke began handling property-tax appeals for Trump, county records show.

The alderman contested the values that then-county Assessor James Houlihan placed on the entire property in 2006, 2007 and 2008. Burke’s appeals were rejected by the Board of Review, a panel of three elected commissioners — two Democrats and a Republican — that decided Houlihan’s property assessments were correct.
In six of the following seven years, Burke was successful in persuading the assessor, the Board of Review or both to lower the assessments — and ultimately the tax bills — for commercial space including 339 hotel condominiums owned by Trump and his investors.

Burke also has filed separate appeals challenging the assessments on the tower’s 480-plus residential condos — when Trump owned them and after he sold them to buyers including Chicago Blackhawks star Patrick Kane. In addition to the money Burke has saved Trump and his investors on the commercial space, he has won tax reductions for Trump, Kane and hundreds of other residential condo owners.

To calculate the savings Burke got for Trump, the Sun-Times obtained county records showing the initial values the assessor assigned to each property in the tower and compared them to the final property values set by the Board of Review. The newspaper then calculated the tax cuts Burke won from the assessor and the Board of Review on the hundreds of tax bills for commercial property that county officials sent to Trump’s company — 401 North Wabash Ventures LLC — and to investors who bought dozens of hotel condos Trump operates.

In 2009, Burke saved Trump’s company almost $1.1 million when he got the Board of Review to slash the assessor’s estimated $141 million market value by 21 percent for the entire tower, which had yet to be subdivided into individual commercial spaces and residential condos. Trump paid $2.7 million in taxes that year.

Burke later went to court, seeking tax refunds from the Chicago Public Schools, City Hall, Cook County and other governments, arguing Trump’s taxes were “erroneous, excessive, illegal and void” because the assessor and Board of Review overvalued the skyscraper. Alvarez is fighting the suit. City Hall has intervened in the case. Because that created a conflict of interest for the alderman, Burke handed it off to another law firm.

In 2010, Burke saved Trump’s company almost $3.5 million by convincing Houlihan he’d overvalued the entire skyscraper. Houlihan lowered his $432 million estimation of the value to $122 million after Burke argued that most of the residential condos hadn’t been sold, the tower’s storefronts along the river were vacant, the hotel had largely been unoccupied and sales of hotel condos hadn’t worked out as planned. Burke’s law firm even called the concept of selling hotel rooms to investors a “failed business model.”

Trump ended up paying $3.9 million in taxes that year on the commercial space and hundreds of residential condos he had yet to sell.

In 2011, Burke saved Trump and his growing group of hotel investors $1.7 million by convincing Houlihan’s successor, Joseph Berrios, another powerful Democratic Party leader, that Houlihan had been overvaluing the commercial space, which was now taxed separately from the residential property.

“The hotel is NOT located in the prime Michigan Avenue hotel area, yet it is being valued greater than those established and better located hotels,” attorney Kelly Keeling Hahn of Burke’s firm wrote, adding, “The entire retail space of the building is un-leasable.”

Initially, Houlihan decided the commercial space owned by Trump and his investors was worth $75 million. Burke got that cut by 65 percent.

“Upon taking office, assessor Berrios realized that the previous administration had erred very significantly by over-assessing some of the property,” Berrios spokesman Tom Shaer says, explaining the retail space not only has gone unoccupied but hasn’t even been finished.

The Board of Review rejected Burke’s efforts to win Trump additional savings.

Trump and his investors paid $1.3 million in taxes on the commercial space in 2011 — less than half the taxes it had been facing.

In 2012, Burke saved Trump and his investors $1.7 million by getting Berrios to lower their property values, then persuading the Board of Review to lower them more. Initially, Berrios valued Trump’s properties at $103 million. Burke got that cut by 40 percent, resulting in Trump’s group paying $2.5 million in property taxes.

Burke is now appealing those payments before the Illinois Property Tax Appeal Board, seeking a partial refund.
Trump Tower, 401 N. Wabash Ave. | Rich Hein / Sun-Times

In 2013, Burke won his largest savings for the Trump group — more than $3.5 million — after the assessor recalculated the skyscraper’s value as part of the every-three-year reassessment of all property in Chicago. Initially, Berrios valued the Trump properties at $129.3 million. Burke got the assessor to cut that by 60 percent. So the group’s tax bills totaled almost $2.3 million. Again, Burke has filed a lawsuit hoping to get a partial refund of the taxes paid.

In 2014, Burke lost his attempts to cut the taxes on the commercial space. Trump and his group paid $2.3 million in taxes that year.

Last year, Burke shaved $242,545 off the Trump tax bills by persuading Berrios to lower the latest assessments by 9 percent, cutting the market value of the commercial space from $56.4 million to $51.1 million. The Board of Review refused to cut further. Trump’s group ended up paying $2.3 million in property taxes. Burke again has filed suit seeking a partial refund.

This year, Burke’s firm appealed the Trump taxes again, seeking a 20 percent cut in the value of the commercial space.

“Having 80,000 square feet of vacant river walk space is an enormous detriment to the hotel,” Keeling Hahn of Burke’s firm wrote. “While the retail is at the bottom of one of Chicago’s luxury hotels, there is no market for retail space which has no direct access to major foot or car traffic.”
The Board of Review rejected Burke’s request, keeping the market value at $62.7 million.

Contributing: Data Reporting Lab editor Darnell Little

TRUMP’S ILLINOIS CAMPAIGN GIVING

Donald Trump and his businesses have made $92,294 in political contributions to Illinois candidates and political action committees since 2001, the year he announced plans for Trump Tower. The recipients:

Mayor Rahm Emanuel: $50,000

Cook County Democratic Party: $12,500

Former Gov. Rod Blagojevich: $9,000

Ald. Brendan Reilly (42nd): $5,500

Illinois Hotel & Motel PAC: $5,085

Former Gov. George Ryan: $5,000

Former governor candidate Edwin Eisendrath: $4,359

Green Industry PAC: $850

SOURCE: Illinois State Board of Elections

Edward M. Burke
Edward M. Burke is the founder of Klafter and Burke, married to Anne M. Burke, and a city council member for Chicago (IL).

Note: Anne M. Burke is married to Edward M. Burke, a justice for the Illinois Supreme Court, and an overseer at the Memorial Sloan-Kettering Cancer Center.
Akin, Gump, Strauss, Hauer & Feld, LLP is the lobby firm for the Memorial Sloan-Kettering Cancer Center, and was the lobby firm for Johnson & Johnson.
Vernon E. Jordan Jr. is a senior counsel for Akin, Gump, Strauss, Hauer & Feld, LLP, an honorary trustee at the Brookings Institution (think tank), married to Ann Dibble Jordan, Valerie B. Jarrett’s great uncle, Antoinette Cook Bush’s stepfather, a director at the American Friends of Bilderberg (think tank), and a 2008 Bilderberg conference participant (think tank).
Robert S. Strauss was a partner at Akin, Gump, Strauss, Hauer & Feld, LLP, and a chairman for the Democratic National Committee (DNC).
Democratic National Committee (DNC) is a committee for the Democratic Party.
Foundation to Promote Open Society was a funder for the Brookings Institution (think tank), the Committee for Economic Development, the Aspen Institute (think tank), the Robin Hood Foundation, and the International Rescue Committee.
George Soros was the chairman for the Foundation to Promote Open Society.
Charles O. Prince III was a trustee at the Brookings Institution (think tank), and is a director at Johnson & Johnson.
Mark B. McClellan was a senior fellow at the Brookings Institution (think tank), and is a director at Johnson & Johnson.
Ann Dibble Jordan is an honorary trustee at the Brookings Institution (think tank), married to Vernon E. Jordan Jr., Antoinette Cook Bush’s mother, was an overseer at the Memorial Sloan-Kettering Cancer Center, and a director at Johnson & Johnson.
Robert Wood Johnson IV is the heir to Johnson & Johnson, and a condo owner at the Trump International Hotel & Tower, New York.
Donald Trump is a stakeholder in the Trump International Hotel & Tower, New York, and the candidate for the 2016 Donald Trump presidential campaign.
Valerie B. Jarrett is Vernon E. Jordan Jr’s great niece, the senior adviser for the Barack Obama administration, and a member of the Commercial Club of Chicago.
Cyrus F. Freidheim Jr. is an honorary trustee at the Brookings Institution (think tank), and a member of the Commercial Club of Chicago.
Commercial Club of Chicago, Members Directory A-Z (Past Research)
Tuesday, December 17, 2013       
Newton N. Minow is a member of the Commercial Club of Chicago, and a senior counsel at Sidley Austin LLP.
R. Eden Martin is the president of the Commercial Club of Chicago, and counsel at Sidley Austin LLP.
Sidley Austin LLP was the lobby firm for Johnson & Johnson, and the legal adviser for the Association of Community Organizations for Reform Now (ACORN).
Michelle Obama was a lawyer at Sidley Austin LLP, and Richard M. Daley’s staffer.
Barack Obama was an intern at Sidley Austin LLP, an attorney for ACORN vs. Illinois State Board of Elections, and Obamacare is his signature policy initiative.           
CGI Group Inc. was the Obamacare contractor that developed Healthcare.gov web site.
Donna S. Morea was the EVP for the CGI Group Inc., and a trustee at the Committee for Economic Development.
Ronald A. Williams is a trustee at the Committee for Economic Development, and a director at Johnson & Johnson.
 William E. Brock III was a trustee at the Committee for Economic Development, and a chairman for the Republican National Committee (RNC).
Rahm I. Emanuel is a member of the Commercial Club of Chicago, the Chicago (IL) mayor, was the White House chief of staff for the Barack Obama administration, and Laurence D. Fink is his informal adviser.
Richard M. Daley is a member of the Commercial Club of Chicago, was the Chicago (IL) mayor, Michelle Obama was his staffer, and Valerie B. Jarrett was his deputy chief of staff.
James S. Crown is a member of the Commercial Club of Chicago, and the vice chairman for the Aspen Institute (think tank).
Lester Crown is a member of the Commercial Club of Chicago, Henry Crown’s son, and was a lifetime trustee at the Aspen Institute (think tank).   
Henry Crown was Lester Crown & John J. Crown’s father.
John J. Crown is Henry Crown’s son, and a judge for the Cook County (IL) Court.
Antoinette Cook Bush is Vernon E. Jordan Jr’s stepdaughter, Ann Dibble Jordan’s daughter, and was a partner at Skadden, Arps, Slate, Meagher & Flom LLP.
Patrick J. Fitzgerald is a partner at Skadden, Arps, Slate, Meagher & Flom LLP, was the prosecutor for the U.S. vs. Rod Blagojevich et al, and the prosecutor for the U.S. vs. George Ryan Sr. and Lawrence Warner.
Rod R. Blagojevich is the defendant in U.S. vs. Rod Blagojevich et al, and was an Illinois state government governor.
George Ryan Sr. is the defendant in the U.S. vs. George Ryan Sr. and Lawrence Warner, and was an Illinois state government governor.
Laurence D. Fink is Rahm I. Emanuel’s informal adviser, a director at the Robin Hood Foundation, and was Timothy F. Geithner’s informal adviser.
Robin Hood Foundation raised money for the Hurricane Sandy relief.
Hurricane Sandy New Jersey Relief Fund is a relief organization for Hurricane Sandy.
Steven A. and Alexandra M. Cohen Foundation was a funder for the Robin Hood Foundation, Hurricane Sandy New Jersey Relief Fund, and the Memorial Sloan-Kettering Cancer Center.
Anne M. Burke is an overseer at the Memorial Sloan-Kettering Cancer Center, a justice for the Illinois Supreme Court, and married to Edward M. Burke.
Cam Henderson is an executive director for the Hurricane Sandy New Jersey Relief Fund, was Mary Pat Christie’s chief of staff, and the finance director for the 2016 Chris Christie presidential campaign.
Mary Pat Christie is the chair for the Hurricane Sandy New Jersey Relief Fund, married to Christopher J. Christie, the president of the Drumthwacket Foundation, and Cam Henderson was her chief of staff.
Christopher J. Christie is married to Mary Pat Christie, an honorary chairman for the Drumthwacket Foundation, the New Jersey state government governor, and was the candidate for the 2016 Chris Christie presidential campaign.
Drumthwacket Foundation maintains the governor's mansion for the New Jersey state government.
Donald Trump was a donor for the Drumthwacket Foundation, a funder for the Bill, Hillary & Chelsea Clinton Foundation, is the candidate for the 2016 Donald Trump presidential campaign, and a stakeholder in the Trump International Hotel & Tower, New York.
Open Society Foundations was a funder for the Bill, Hillary & Chelsea Clinton Foundation, and the Atlantic Council of the United States (think tank).      
George Soros is the founder & chairman for the Open Society Foundations, a co-chair, national finance council at the Ready PAC (Ready For Hillary), and was the chairman for the Foundation to Promote Open Society.
Foundation to Promote Open Society was a funder for the International Rescue Committee, Common Cause, the Committee for Economic Development, and the Aspen Institute (think tank).
Timothy F. Geithner is a director at the International Rescue Committee, married to Carole Sonnenfeld Geithner, was an overseer at the International Rescue Committee, the secretary at the U.S. Department of the Treasury for the Barack Obama administration, and Laurence D. Fink was his informal adviser.
Carole Sonnenfeld Geithner is married to Timothy F. Geithner, and was a research associate for the Common Cause.
Internal Revenue Service (IRS) is a division of the U.S. Department of the Treasury.
Charles O. Rossotti was a commissioner for the Internal Revenue Service (IRS), and is a director at the Atlantic Council of the United States (think tank).
IRS Oversight Board is a citizen’s board for the Internal Revenue Service (IRS).
Deborah L. Wince-Smith was a member of the IRS Oversight Board, and is a member of the Belizean Grove.
Carolyn S. Chin is a member of the Belizean Grove, and was a trustee at the Committee for Economic Development.
William E. Brock III was a trustee at the Committee for Economic Development, and a chairman for the Republican National Committee (RNC).
Julie Daum is a trustee at the Committee for Economic Development, and a member of the Belizean Grove.
Mary Agnes Wilderotter is a trustee at the Committee for Economic Development, and a member of the Belizean Grove.
Davia B. Temin is a trustee at the Committee for Economic Development, and a member of the Belizean Grove.
Brenda J. Gaines is a member of the Belizean Grove, and was the mayor's deputy chief of staff for Chicago (IL).  
Henrietta Holsman Fore is a member of the Belizean Grove, a trustee at the Committee for Economic Development, and a trustee at the Aspen Institute (think tank).
Belizean_Grove is the equivalent to the male-only social group, the Bohemian Club.
Henry A. Kissinger is a member of the Bohemian Club, a director at the Atlantic Council of the United States (think tank), an overseer at the International Rescue Committee, a director at the American Friends of Bilderberg (think tank), was a lifetime trustee at the Aspen Institute (think tank), and a 2008 Bilderberg conference participant (think tank).
James S. Crown is the vice chairman for the Aspen Institute (think tank), and a member of the Commercial Club of Chicago.
Lester Crown was a lifetime trustee at the Aspen Institute (think tank), is a member of the Commercial Club of Chicago, and Henry Crown’s son. 
Henry Crown was Lester Crown & John J. Crown’s father.
John J. Crown is Henry Crown’s son, and a judge for the Cook County (IL) Court.
Walter Isaacson is the president & CEO for the Aspen Institute (think tank), and was the chairman & CEO for CNN.
CNN Worldwide is a division of CNN.
Jeff Zucker is the president of CNN Worldwide, a director at Robin Hood Foundation, and an overseer at the Memorial Sloan-Kettering Cancer Center.
Robin Hood Foundation raised money for the Hurricane Sandy relief.
Hurricane Sandy New Jersey Relief Fund is a relief organization for Hurricane Sandy.
Steven A. and Alexandra M. Cohen Foundation was a funder for the Robin Hood Foundation, Hurricane Sandy New Jersey Relief Fund, and the Memorial Sloan-Kettering Cancer Center.
Anne M. Burke is an overseer at the Memorial Sloan-Kettering Cancer Center, a justice for the Illinois Supreme Court, and married to Edward M. Burke.
Edward M. Burke is married to Anne M. Burke, the founder of Klafter and Burke, and a city council member for Chicago (IL).

No comments: