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 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.
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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.
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