CHICAGO — Billionaire J.B. Pritzker on Thursday promised to shift some of his immense wealth into a blind trust to avoid conflicts of interest, but it's unclear whether he will be able to fully wall off his fortune from his official duties as Illinois governor.
Pritzker said he has appointed Chicago-based Northern Trust Co. to act as an independent trustee and make all investment decisions about his personal assets. Those same rules won't apply to the extended Pritzker family fortune that's held in secretive onshore and offshore trusts. Pritzker said the terms governing the family trusts do not allow for the assets to be moved into the blind trust.
In addition, Pritzker is divesting "his personally-held direct interests in companies that have contracts" with the state, his campaign said.
Pritzker, who on Monday will become the nation's richest governor, declined to identify those companies or the dollar amount of those state contracts. Nor would Pritzker disclose the dollar amount of his personal assets going into the blind trust or reveal how much he benefits from various family trusts.
The complex and vast nature of Pritzker's wealth and a lack of transparency illustrate how difficult it can be to learn when a wealthy politician's financial interests might butt up against what's in taxpayers' best interests.
Pritzker, a Democrat, said his efforts to avoid conflicts go further than what was done by outgoing Republican Gov. Bruce Rauner, a wealthy private equity investor who stopped short of setting up a blind trust.
When he took office in 2015, Rauner set up a power of attorney to handle much of his wealth to try to avoid conflicts between his personal investments and his public duties. Rauner gave that power to Roundtable Investment Partners, a New York firm he's intertwined with both financially and politically. Rauner is an investor in the private equity firm and several of its funds. And Roundtable employees donated to his campaign fund.
Northern Trust, which will now oversee Pritzker's personal wealth, is not listed in state records as making campaign contributions to Pritzker. And Pritzker's statement of economic interests do not list Northern Trust as one of his holdings.
"Governor-elect Pritzker believes that public service is a public trust, and he has taken steps to ensure that the Illinois Governor's Office operates free of any financial conflict of interest and upholds the highest ethical standards during his term in office," spokeswoman Jordan Abudayyeh said.
What Pritzker promises to set up is not a true blind trust, however, since he will not be totally "blind." He will need to know the names of the companies and funds he's invested in to do his taxes and to comply with the state's ethics laws.
As was the case with Rauner, Pritzker will be required to annually file a statement of economic interest — required by law and released publicly — that list entities he has a financial interest in but not the dollar amount invested.
"He is as blind as the law will allow," said Marc E. Elias, a Pritzker campaign lawyer.
During the campaign, Pritzker filed a financial disclosure statement that showed he had a stake in more than 300 entities. Pritzker owned stock in a number of iconic companies such as Anheuser-Busch, Disney, Procter & Gamble, Facebook and Apple, as well as a number of lesser-known companies.
Pritzker, a Hyatt Hotel heir who Forbes magazine estimates is worth $3.2 billion, has extensive onshore and offshore holdings that he has never fully explained to the public.
Pritzker put a record-setting $171.5 million into his campaign, but during the previous three years, he reported earning $28 million. He has not said where the rest of the money came from to pay for the campaign.
Pritzker has declined to release personal income tax returns that could shed light on his financial holdings, providing only the first two pages of the returns. He has declined to release the tax returns for any of his trusts, including PG Byk -- a domestic trust in which he is the sole beneficiary and that financed his successful run for governor.
He won't reveal how many domestic and offshore trusts he benefits from, and won't identify the trusts by name or where they are located. And he won't say how much money he receives from them. On Thursday, Pritzker pledged to relinquish any decision-making authority over the family trusts and indicated he will not receive reports on how those family trust assets are performing.
A Tribune investigation in March raised questions about how much distance Pritzker placed between himself and his opaque offshore investments. The Tribune found a series of shell companies set up in the Bahamas that benefit Pritzker or his brother, or that list other close associates as executives.
One of Pritzker's offshore shell companies was part of a venture that quietly planned to buy city-owned land along the Chicago River to launch amphibious duck boat tours downtown. In 2016, Seadog Ventures Inc. agreed to buy vacant land near the Cermak Road bridge from the city for $191,000. Seadog, a tour boat company, is a subsidiary of Entertainment Cruises LLC, which is owned by J.B. and Anthony Pritzker.
City records showed the Pritzker brothers hold nearly 19 percent of Seadog in two companies with addresses in the Bahamas — Moreau Capital Holdings Ltd. and Aman 2 Capital Holdings Ltd.
Pritzker was asked during the campaign how offshore shell companies that benefit him came to invest in the Chicago project. He suggested that sometimes he proposes investments to his family's offshore trusts, and the people who run those trusts sign off. That city land deal is now dead.
The Pritzker family wealth was amassed over decades by J.B. Pritzker's ancestors. His grandfather Abram "A.N." Pritzker built a broad portfolio of real estate and corporate holdings. He shepherded the family's growing business interests, and along the way set up numerous trusts for the benefit of the family.
During the 1950s, the Pritzkers bought an airport hotel in Los Angeles called the Hyatt, and from that single hotel, the family built a sprawling global hotel chain. J.B. Pritzker's late father, Donald, was a co-founder, chief executive and driving force in the Hyatt chain. Besides hotels, other business interests included cruise ships, tobacco, insurance, banking and casino gambling.
While the Pritzker family empire assets aren't going into a blind trust, Pritzker said if he learns that a company held in one of his family trusts makes money on a state contract during his term, he would donate an equal amount of money to charity. Such a promise is not legally binding, and it's unclear how Pritzker would be made aware of such a situation.
As part of his Thursday announcement, Pritkzer took a parting shot at Rauner.
During the campaign, Pritzker seized upon a lawsuit unsealed last year that alleged Rauner had met with a onetime business partner in Springfield in 2015. Pritzker accused Rauner of breaking his promise that he would not be involved in business dealings while governor.
That lawsuit "revealed that Gov. Rauner's commitment was just a charade, and that he had been conducting private investment business on the back porch of the governor's mansion," according to a statement from Pritzker's team.