Illinois, Gov-elect J.B. Pritzker, whose family owns some major plastics firms through its Pritzker Group Private Capital firm, says he will take the strongest steps allowed by law to ensure that control and investment of his personal wealth is kept separate from his official duties.
Pritzker, along with his brother Tony, have invested heavily in the plastics business in recent years through their Pritzker Group Private Capital firm. Pritzker Group owns Technimark LLC, a maker of rigid plastic packaging and components, as well as ProAmpac, a flexible packaging company and in November it announced it is acquiring plastics sheet giant Plaskolite LLC.
The same month, Pritzker, a Democrat, won election to become Illinois’ next governor. He is slated to take office Jan. 14.
In a Jan. 9 announcement, Pritzker, said that all of his personal assets will be placed into a blind trust managed by Northern Trust. The firm will “control all aspects” of how to invest the money, and give him only the minimum of information needed to file his income tax returns and the state’s annual statement of economic interest. It wasn’t immediately clear of Northern Trust will oversee the plastics holdings.
Other assets, held in Pritzker-family trusts for him and other beneficiaries of the Hyatt Hotels empire, will be managed by those trusts without input from him, documents released by Pritzker indicate. As with personal assets, the governor will receive only “the minimum amount of information necessary to prepare and verify his statement of economic interests, his personal income tax returns and other financial filings required by law,” one document states.
Pritzker also will sell his personally-held interest in any company that has a contract wholly or partially funded with state money, aides said. And if any company in which his trusts invest ends up acquiring a state contract during his term and makes a positive return, Pritzker “will make a charitable contribution in the amount of that return.”
“Gov.-elect Pritzker believes that public service is a public trust, and he has taken steps to insure that the Illinois governor’s office operates free of an financial conflict,” spokeswoman Jordan Abudayyeh said.
The new rules generally will not apply to Pritzker’s wife, M.K. Pritzker, and that’s typical in such cases, aides said. But there is an exception. While M.K. Pritzker will retain direct control over her investments, neither she nor the couple’s children “will have or acquire any direct pecuniary interest in a (state) contract” during his tenure.
Outgoing Gov. Bruce Rauner — who also is independently wealthy, but not as rich as Pritzker — also set up an independent trust that was supposed to be blind and make all decisions about how to manage money Rauner made in the private-equity business.
Pritzker aides said his trusts will be stronger and blinder than Rauner’s, who faced charges during his tenure that he continued to have some involvement in managing his assets. Rauner denied that.
The details of Pritzker’s plan are laid out in a memo prepared by Perkins Coie attorney Marc Elias, who heads the firm’s political law practice. Elias has helped numerous other prominent wealthy officials develop such policies, including former U.S. Sens. Mark Dayton of Minnesota, John Kerry of Massachusetts and John Corzine of New Jersey, all Democrats.
In a “To: Interested Parties” memo, Elias says the new governor specifically will:
• Divest of personal assets that have state contracts.
• Deposit other personal assets asset with an independent Northern Trust trustee under terms that prohibit him “from exercising any management or control.”
• Make no decisions about investments made by family trusts, and receive no regular reports except those needed for legal filings.
• Appoint an “independent compliance officer” to “oversee a team of attorneys and ethics experts to advise the connected parties on compliance considerations regarding potential conflicts of interest.”