The Real Deal Chicago

Madigan’s property tax work back in the spotlight after he surfaces in FBI probe

The super-powerful Illinois House speaker was recorded angling for business for his law firm from a developer
By Alex Nitkin | January 29, 2019 04:00PM

Michael Madigan (Credit: Wikipedia)

It’s hard to miss the resemblance between Illinois House Speaker Michael Madigan’s conversation with a developer, recorded by an FBI mole and detailed in new court documents,  and the taped conversation in which investigators say Alderman Ed Burke (14th) committed attempted extortion.

In both cases, a property owner needing help from the city was explicitly encouraged to hire the official’s property tax firm. The difference was Madigan didn’t say on tape how he would help the developer if he hired Madigan’s law firm. He didn’t have to.

“If you’re a private developer or a businessperson in Chicago who doesn’t understand who Mike Madigan is, you’ve already lost the game,” said David Kidwell, special projects editor for the Better Government Association.

As a state legislator, Madigan has no direct authority over the kinds of city-level decisions developers agitate over.

But on top of shepherding the Democratic supermajority in Springfield, Madigan uses his political fundraising prowess and patronage army of city employees to influence aldermen on crucial regulatory decisions on development, according to Kidwell, who has spent 20 years investigating Madigan and his law firm, Madigan & Getzendanner.

“He goes to the owners of these skyscrapers, sits across the table from them and asks for their business,” Kidwell said. “He becomes their rainmaker, and the timing of that is often juxtaposed with them what they need from (the) government,” whether it’s a block grant or a driveway permit.

The Chinese developer who met with Madigan never did end up hiring his law firm, according to the court documents, which also detailed the lurid findings of a federal investigation of Alderman Danny Solis (25th). And Madigan repeatedly has denied breaching any legal or ethical boundaries with his property tax work, most recently through his attorney, who told the Sun-Times “to our knowledge, neither the speaker nor his law firm is under investigation.”

But the revelation the speaker was on the FBI’s radar as far back as 2014 suddenly calls into question whether the taint of scandal could reach through the offices of Madigan & Getzendanner and touch the dozens of Downtown property owners who have retained its services to lower their tax bills over the decades.

Juggernaut development firms including 601W Companies, Related Midwest and Sterling Bay all have raced this month to distance themselves from Burke’s property tax firm, Klafter & Burke, which appealed the taxes on about $4.7 billion worth of properties between 2010 and 2016, according to the Chicago Tribune. But Madigan & Getzendanner handled nearly twice as much volume during the same period, making it Cook County’s top property tax firm for commercial and industrial clients.

A 2017 Reuters investigation found Madigan & Getzendanner scored clients a combined $63.3 million in savings through lowered tax assessments between 2004 and 2015.

In 2012, while they were investigative reporters at the Chicago Tribune, Kidwell and John Chase (now investigations director at the Better Government Association) co-authored a report that senior housing developer Pathway Senior Services benefitted from a state initiative just after the company hired Madigan & Getzendanner in 2005.

That year, the Illinois House voted to approve a Medicaid-backed program that allowed able-bodied patients to move to less expensive facilities, cutting operating costs. Pathway executives denied their hiring Madigan’s firm to represent one of their properties had anything to do with the program being approved.

Pathway Senior Living, now called Pathway to Living, today operates 29 facilities across the Midwest with three more on the way. Backed by an equity takeover this month by real estate investment firm Waterton, Pathway is now pushing to open a wave of new facilities on the East Coast.

Political leaders and observers alike have spent decades decrying Madigan’s criss-cross of public and private interests, especially former Gov. Bruce Rauner, who scarcely spoke in public without mentioning the “corrupt self-dealing” and “fundamental conflict of interest” he saw in the speaker’s office.

But the 76-year-old Madigan has yet to be charged with a crime in the more than three decades he’s served as speaker. And as much dirt as Solis might have dug up while was wearing a wire for investigators, there’s no reason to think they’ll pin down Madigan the way they did with Burke, Kidwell said.

“Burke made the mistake of saying something out loud that proved their case, and Madigan did not,” Kidwell said. “Madigan is not that stupid.”

Still, Madigan doesn’t need to be dragged to court for public distrust to grow, according to Kent Redfield, a former legislative staffer and professor emeritus of political science at the University of Illinois at Springfield.

“There’s corruption, the opportunity for corruption and the appearance of corruption, and all of those things are bad,” Redfield said. “People are going to connect the dots, and when people get cynical about government, they’re much less likely to accept the legitimacy of political decisions.”