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Insiders point to Pappas aide as source of damaging anti-Pritzker leak

Chicago Sun Times

Tuesday, October 9, 2018  |  Article  |  Greg Hinz

Candidates--Statewide (12)

The general counsel to the Democratic treasurer denies it, but sources suggest Peter Karahalios, who holds a second job from Rauner, leaked the report on the toilet scheme.


Political insiders are pointing to a senior aide to Cook County Treasurer Maria Pappas as the person who leaked a "confidential" report by county Inspector General Patrick Blanchard, a report that has thrown a big last-minute obstacle in the path of Democratic gubernatorial hopeful J.B. Pritzker.


The aide: Peter Karahalios, Pappas' general counsel and a friend and appointee of incumbent GOP Gov. Bruce Rauner.


The report charged that Pritzker associates engaged in "a scheme to defraud" the county by yanking out toilets in a Gold Coast mansion he owned and then claiming that he was owed hundreds of thousands of dollars of property tax cuts because the building had become uninhabitable. Rauner, badly trailing in the polls, has seized on the issue with vigor and yesterday launched a new TV ad blitz declaring, “Illinois can’t afford another governor going to jail.”


The story was first reported by the Sun-Times. The paper said only that it had "obtained" the document, which was marked "confidential" in underlined bold-faced letters and was sent only to a handful of county officials, all Democrats who presumably are supporting Pritzker.


But now sources in both major political parties are lifting the veil on what happened. Here’s what I hear.


For starters, I’m told by multiple sources who say they are sure of their facts that the document was leaked to the Sun-Times by campaign aides to Rauner. Rauner's campaign spokesman and Sun-Times editor Chris Fusco both declined to comment.


I’m told by someone with direct knowledge that it was Karahalios who gave it to the Sun-Times, with a second source close to the matter indicating they, too, believe that is the case.


Karahalios, in separate phone interviews yesterday and last week, flatly denied he released the report. “That’s not accurate,” he told me. "That’s not true."


Pappas said, "I believe him. . . .No one in my office would be stupid enough to do that."


But the treasurer declined to say if Karahalios was given access to the report, and when.


Karahalios, who previously was Pappas' chief of staff, was appointed by Rauner in 2015 to a vacancy on the Illinois Court of Claims. The seven-member panel rules on contractual disputes and other matters involving financial claims against the state.


The judgeship pays $59,900 a year. Karahalios also has continued to work for Pappas, making $162,000 in 2017, according to official county records.


He also serves on the board of the United Hellenic Voters, which last year, as the state was in the middle of a bitter three-year budget war, named Rauner its man of the year.


In a video posted to YouTube—now removed—of Rauner’s acceptance speech at the group’s dinner, the governor describes Karahalios as a "dear personal friend" and a "great public servant."


Pritzker has insisted he did nothing wrong in the toilet matter, even though paperwork filed on his behalf indicated that the toilets had been removed three years before they actually were, according to the inspector general's report.   Pritzker in turn has responded by pointing to a criminal investigation opened by outgoing Illinois Attorney General Lisa Madigan, a Democrat, into how Rauner handled a medical outbreak and deaths at the Quincy Veterans Home.