Pritzker cashed out of Hyatt as Clinton campaign spiraled downward

Illinois Capitol News

SPRINGFIELD, Ill. (WCIA) — An anonymous Twitter account emerged late Thursday night promising to deliver a January surprise that could threaten to upend billionaire J.B. Pritzker’s smooth ride to a Democratic primary election victory in March.

In a series of tweets reminiscent of the now infamous WikiLeaks rollout of hacked DNC emails, the mysterious schemer peddled a web of tax avoidance theories which claim, with scant evidence, that Pritzker began filling his massive campaign war chest by “liquidating offshore assets” and funneling the money through shell companies in Nevada and South Dakota.

Part of that claim happens to contain traces of truth, although the covert Twitter sleuth only provided screenshots of information readily available to the public, and lacked sufficient evidence to prove the funds in question were ever steered into Pritzker’s campaign for governor. 

Pritzker campaign communications director Galia Slayen pushed back against that assertion, writing in an email, “JB Pritzker has never taken a disbursement from an overseas trust, and has directed that all disbursements from those trusts go to charity. No money from the overseas trusts has gone towards the campaign.”

SEC filing forms show the shares were cashed out and distributed into the Pritzker Family Foundation, which operates as a 501(c)(3) nonprofit charity. According to tax documents filed with the Internal Revenue Service in 2015, the Pritzker Family Foundation reported it held over $104 million in assets that year.

According to insider transaction documents filed with the U.S. Securities and Exchange Commission, Pritzker began unloading his shares of Hyatt Hotel Corporation stock on August 19th, 2016, less than one month after Julian Assange first published emails damaging to Hillary Clinton on WikiLeaks. At the time, Pritzker was heavily invested in Clinton’s presidential bid, donating over $15 million to Priorities USA Action, the pro-Clinton super PAC then run by current Pritzker campaign manager Anne Caprara. 

According to a source who was briefed on the matter, Pritzker was angling for a high-level cabinet position in Clinton’s administration and had every expectation she would win the November contest in a landslide. Pritzker, a venture capitalist, previously pursued a coveted appointment to the Illinois State Treasurer’s office from ex-Governor Rod Blagojevich. The FBI recorded Pritzker’s 2008 phone conversations with Blagojevich under wiretap surveillance before the audio was unearthed and published by the Chicago Tribune in May 2017. 

Pritzker attended the Democratic National Convention in 2016 and spoke with members of the Illinois delegation, as did his soon-to-be primary rival Chris Kennedy, but a source who was involved in those discussions said Pritzker did not reveal any intention to run for governor at the time. 

It was only after the trove of WikiLeaks emails was released, some of which contain fundraising emails and conversations with Pritzker himself, did he begin moving money out of his Hyatt fortune in the Bahamas to establish what would become, ostensibly, a hedge bet against Clinton’s unlikely loss in November. Pritzker personally signed off on the documents that show he used shell companies established in South Dakota and Nevada to complete the multi-million dollar transactions. 

Two days after Clinton’s defeat, Pritzker sold off 250,000 shares of Hyatt stock at $51.10 per share, netting him $12,775,000.

He moved again on November 30th, dumping 2,000,000 shares of Hyatt Hotels Corp at $50.8 per share for a sum total of $101,600,000. 

On December 9th, he cashes out one final time, this time disposing of 780,571 shares valued at $55.49 each for a total value of $43,313,884.80. Each of his multi-million dollar buyouts are signed by Jay Robert Pritzker, President. The total value of Pritzker’s stock conversion moves delivered him $220,151,346, not counting any associated fees.

Pritzker did not list PG Alma Trust (SD), Posterity PT Group (NV) or CIBC Trust Company (Bahamas) in financial disclosure forms submitted to the Illinois State Board of Elections. The Pritzker campaign says it disclosed the identity of all “underlying assets in any entity in which J.B. Pritzker personally had an ownership or constructively controlled interest during the reporting period,” but not the companies or trusts which controlled those assets. Pritzker resigned from Posterity PT Group in late 2016, right before declaring his intention to run for governor. 

Neither the State Board of Elections nor the Secretary of State’s office could explain which state agency is responsible for monitoring or enforcing the accuracy of financial disclosure forms. The Ethics Commission and the Attorney General’s office has not yet returned our calls seeking clarification. 

“We do not deal with the content [of the disclosure forms],” said Dave Druker, press secretary for the Secretary of State’s office. “Our authority is limited in terms of the filing. We collect them and ensure timeliness in reporting.” 

Tom Pritzker, J.B.’s brother, also moved to sell a bulk of his shares in similar quantities on the same dates from Coco Trust. Those mirroring transactions list Alpine PT Company as the trustee, a shell company that shares an address with Posterity PT Company in Reno, Nevada.  

In response to this story, the Pritzker campaign provided a letter from a trustee at Posterity PT Company which says the trust paid $11,525,377 in Illinois taxes on the 2016 sale of Hyatt stock at a rate of 5.25%, the highest rate in Illinois that year. The name of the trustee who certified the claim was redacted.

The Pritzker campaign reported that trusts that benefit him paid a total of $24.95 million in taxes to Illinois between 2014 and 2016, although they did not release the IRS filing forms for those trusts. Pritzker listed just $15 million in taxable income in his 2016 federal income tax return. He paid no state income tax in 2014. 

Each of these stock transactions appears to have been conducted legally, but Pritzker’s political rivals will almost certainly raise questions about the timing and the ethics of the maneuvers, the civic duty of would-be public servants to pay taxes, the apparent contradiction between his transactions and his public statements calling on the wealthy to “pay their fair share,” and his pledge on Tuesday night to create a “truly blind trust” that would separate him from conflicts of interest.

Sarah Brune, Executive Director of the Illinois Campaign for Political Reform, said, “Questions like this highlight the need for stronger and more precise financial disclosure requirements for political candidates in Illinois. Other states provide helpful models for improvement in this area. ICPR is currently pursuing legislation at the state level to address this issue, so that voters and members of the media can assess potential conflicts of interest more clearly.”

In a December radio interview, Democratic primary candidate Chris Kennedy said about Pritzker and his wealth, ‪”If there’s a history of tax cheating, that’s a disqualifier for public service.” Kennedy also benefits from family trusts but did release the names of those trusts in November. 

“Chris has been open about the names of his trusts,” Rebecca Evans said, a spokeswoman for the Kennedy campaign. “All assets in his trusts are disclosed on his statement of economic interest. He has nothing to hide. His trusts are all based within the United States. He isn’t trying to dodge taxes.” Evans added, “The campaign is working to provide the states where the trusts are housed.”

In 1997, during a failed run for Congress, Pritzker told the Chicago Sun-Times, “Other than the income, I don’t know what assets are held in these trusts.” Asked to clarify, he said, “Because that is the way I have chosen to have it structured, so I don’t have a conflict of interest.” 

In a campaign email sent on Tuesday, the Pritzker campaign criticized Republican Governor Bruce Rauner for saying “all my investments are in a trust that I don’t control” when in fact newly released court documents, which align with the governor’s public schedule obtained by the Associated Press under the Freedom of Information Act, revealed he held a meeting with an ex-business partner at the Executive Mansion in May 2015.

Court documents, which were released despite Rauner’s protest, show he won $20 million on a $5 million investment he made before taking office, but now insists he’s entitled to a larger share of the money. 

Rauner’s office responded to the unsealed documents on Wednesday, telling WCIA in an email, “This is a contract dispute that stems from before Governor Rauner took office. The Governor is seeking to enforce the terms of that contract. Court filings dispute Mr. Kirkpatrick’s allegations, including his characterizations of any conversations. The Governor is not involved in day-to-day investment decisions.”

According to former Rauner advisors, the governor was twice briefed with internal memoranda on the specific floor designs of the Executive Mansion and the Director’s House at the State Fair Grounds to designate where he was legally and ethically allowed to hold meetings regarding private business, which would not inherently constitute a violation of state law. 

In the Pritzker campaign email, Slayen wrote, “Bruce Rauner is allegedly conducting private business out of the governors’ mansion and then openly lying about it to the public. It is no wonder this failed governor tried to keep this lawsuit sealed, but now that it’s public, it is time for Bruce Rauner to tell voters the truth.”

*This article has been updated to include a response from the Pritzker campaign. 

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