Running a large non-profit is the closest analog to the job that we ask of our governor, who is tasked to execute on a specific mission, without a profit motive. Because past performance is the best predictor of future performance, here at Pritzker Papers, we looked into how JB Pritzker has run one of his highest profile non-profits: 1871.

What we found chilled us to the bone. 1871 sends millions of dollars a year to a shell company called TNDP LLC, which owns nearly everything that 1871 needs to operate (their building, intellectual property, digital portfolio, etc.). TNDP is solely owned by J.B. Pritzker, who uses the cash to make maxed out political donations to people like Mike Madigan – likely a massive violation of the law and a potentially campaign ending scandal.

BACKGROUND



The Chicagoland Entrepreneurial Center, commonly called 1871, was set up in its current form at the Merchandise Mart in 2012 but as reported here for the first time, had it’s origins in the last days of the Rod Blagojevich administration, with the story spanning nearly a decade to include millions that Pritzker paid himself from state funds, and a potentially illegal max donation paid to Mike Madigan from 1871’s coffers.

IT ALL BEGINS WITH BLAGO.

According to four first hand accounts by those involved, Rod Blagojevich and J.B. Pritzker met on at least two occasions while either J.B. or Blagojevich (or both!) were targets of an FBI investigation (as evidenced by the infamous FBI recording of J.B.)



After Blagojevich’s arrest, Pritzker’s access to taxpayers dollars for his pet project went away, and so did his desire to implement his broader vision for 1871. While that might not be so surprising for someone of modest means, remember that Pritzker is a billionaire. If he cared about the project as much as he said he did, why wasn’t he willing to donate the money himself rather than forcing taxpayers to empty out their pockets?

JB sat on the sidelines for three years waiting for your hard earned tax money to once again be available for his benefit. Once public money was back on the table in 2012, and Pritzker didn’t have to spend a dime, the project was reincarnated.

None of this is a good look for JB – using taxpayer dollars for his own benefit, nor using a non-profit as a bargaining chip with a now incarcerated felon. But JBs actions went much further than poor judgement, as we’ll explore more below.

ENTER TNDP.

After greasing the wheels with $250k in total political donations leading up to the announcement, your hard earned tax dollars were forked over to J.B. to pursue his pet project of putting a shiny tech incubator into the merch mart (mind you, there were plenty of other non-publicly funded spaces who were none to happy about the state subsidy of a billionaire’s pet project!).

As soon as the grant was promised to Pritzker in mid 2011, he set up a shell company that may eventually be the undoing of 1871. The shell company that J.B. set up is a for profit entity, that owns all of the major operational assets of the non-profit 1871 (for which you, the taxpayer, are paying for). The shell company’s sole purpose is to hold 1871 assets. Such an arrangement is highly unusual, due to it’s likely illegality.

In case there is any doubt on whether or not the shell company (called TNDP LLC.)and 1871 are inseparable, take a look at the list of things that the shell company owns, and ask yourself, could 1871 function without the things that TNDP owns?

1871’s name is owned by…. TNDP LLC.



1871’s digital portfolio is owned by…. TNDP LLC.

1871’s office is owned by … TNDP LLC (see Chicago building permit #100420402 and Fig 2.)

Think that’s bad? Hold onto your seats. It gets worse.

J.B. TAKES YOUR TAX DOLLARS, PAYS HIMSELF.

TNDP/1871 took over $7m of your hard earned tax dollars (see Chicagoland Entrepreneurial Center form 990s from 2011 to present) to fund his passion project, wiping out many other small business who spent years building their own incredible incubators without a single penny of your money. While it’s gravely concerning that J.B. is using you to subsidize his passion projects, it’s terrifying to see what he did with the cash – and how his actions at 1871 offer a startling look into our future with J.B. at the helm.

Once J.B. received the cash from the stat grants, he had the pathological gall to start paying himself close to $1.9m a year on average in “occupancy fees”.



To try to hide this fact from you, the voter, he created yet another fake shell company to try to obfuscate the scheme – TNDP LLC.

To put that in very stark terms, you as the taxpayer paid for JB’s passion project, and on top of that, he went a step further and paid his sham TNDP company (of which he is the only owner) about $10m in total.

Paying J.B.’s TNDP LLC (from which he went on to max out to Madigan) is the single largest expense of 1871, nearly 2.5x higher than what they pay for salaries for their staff.

Let me repeat that dear readers, J.B. PRITZKER is the largest recipient BY FAR of cash that flows into 1871. He uses that cash to make political donations and to make himself even richer. Through this scheme, J.B. took your hard earned cash and paid himself millions of dollars a year in “occupancy fees” that have never been disclosed (as they are required to be) in any IRS 990 form.

Even more incriminating is what J.B. did with the TNDP money, which by definition only could have come from 1871 (and thus your $7m of taxes that was handed over to them). If you guessed “well gee, the only way this could get any worse was if he used the non-profit cash to pay off Mike Madigan…” then you’d be correct. That’s exactly what he did.

JB TAKES YOUR TAX DOLLARS AND PAYS MADIGAN.

From the TNDP LLC bank account, J.B. spread around $100k in political donations to people like Mike Madigan in November of 2016. Meaning, he took cash that originated in the hands of the taxpayers of Illinois, and gave it to Mike Madigan. Parallel to the actual actions that Pritzker took is the importance of the timeline, and how it ties into our bombshell stock story from earlier in the week.

As discussed in the first article, Pritzker had committed to running in the early part of 2016. In November and December he started to take active steps to sure up his candidacy. Part of that was selling off 100’s of millions of dollars of stock through sham addresses in Reno, as you can read more about here.

During this period, there were a flurry of donations that are interesting for two key reasons:

The donations were made from TNDP LLC, the slush fund that J.B. uses to convert your tax dollars into his dollars using 1871. Because TNDP LLC is so tied into the non profit it serves (trademarks, IP ownership, digital ownership, etc) many would consider it simply a part of 1871. That’s problematic because if it’s part of 1871, as the court would likely view it, the fact that it’s made donations could imperil 1871’s non profit status and land knowing participants in some serious hot water.

The donations from TNDP to Madigan were made hours after a massive PG ALMA liquidation through a sham address in Reno. The timing of the donations strongly indicates that Pritzker was liquidating stock to fill his campaign coffers, and instead of using his own money, used your tax dollars that he’d appropriated via TNDP to pay off Madigan at the max donation level. Broadly, this is yet another data point that shows that everything is connected during this period, with Pritzker trying to avoid using his own money for as long as possible, and instead, chose to use yours.

For those of you who followed our first story, Pritzker’s donation to Mike Madigan out of the TNDP account came only hours after a large sale of stock from the now infamous PG ALMA trust. This serves as yet another data point showing that the PG AlMA stock sales are inextricably linked to his scheme to pay off Mike Madigan, enrich himself, and put himself before the citizens he now wants to represent.

J.B. will be rocked by this article as it threatens both his campaign, as well as threatens his freedom due to the potential criminal exposure. He’ll try to come back and try to downplay TNDPs role, but that will be a lie. When you’re evaluating J.B.s cover up, ask yourself the very common sense questions of ‘what would a normal non-corrupt person do in this situation’. Then ask:

Why doesn’t 1871 own it’s own name?

Whydoesn’t 1871 own it’s own intellectual property?

Why doesn’t 1871. a tech company, own its own website?

Why does 1871 pay JB’s slush fund millions of dollars a year, a portion of which gets funneled to Mike Madigan?

A truthful response to the questions above will show how far from the norm we’ve strayed from the norms. A normal nonprofit executive would never have to face regular questions of corruption. Instead, they’d own their own name, they’d own their own site, and they wouldn’t be paying a shadowy shell company millions of dollars a year without disclosing true nature of the relationship. Zooming out, there is no other non profit that runs their operation like 1871 – which flirts dangerously close to a money laundering scheme.

Most importantly the issues at 1871 can be ascribed to no one else besides J.B. Pritzker. Through this example he’s shown that he has absolutely no qualm in taking millions of your tax dollars, spending your dollars it on his flights of fancy, and then taking your millions of your dollars to line his pockets and those of his Madigan cronies.

Our community is strong, we can get through this, but this isn’t normal. After years of Rauner, we can’t let someone even worse than him to take back the seat. Get out the vote, get engaged, and please share this story as widely as you’re comfortable.

-R. Saunders.