South Side church where Rush serves as pastor / BGA photo
U.S. Rep. Bobby Rush (D-Ill.) and two nonprofits he founded have repeatedly failed to pay federal, state or local taxes on time, a Better Government Association investigation has revealed.
In 2013 alone, Rush, his wife, a church the congressman runs and another nonprofit organization operating out of the church had tax delinquencies that added up to as much as $195,000, the BGA found.
The pattern of tax delinquency for Rush and his organizations goes back almost a decade, records show. But the amount currently in arrears seems to be an all-time high for Rush and his affiliates.
Congressman Rush, By The Numbers
NOTE: Tax liens are considered outstanding and generally not released until debts are paid in full.
Source: Publicly available government records.
Some of the tax obligations are shared by Rush's wife, Carolyn.
Due to his wife's unspecified "acute" medical condition, Rush was on leave from Congress from Sept. 12 until just recently, according to the Congressional Record. He made occasional public appearances in Chicago while on leave, though, and at one event mentioned that his wife has spent months in intensive care.
Last August, before the congressman went on leave, reporters for the BGA tried to ask questions about unpaid taxes on his Chicago home during an interview in his 79th Street congressional office.
"What are you trying to do and say to me? Yes, I might owe tax. I might owe a lot of things," Rush said.
He hinted he is stretched financially.
"I'm a person who has to live in two different cities on an income. So I ain't got it like that," Rush said.
The Rushes own a home in Chicago's Bronzeville neighborhood and Rush has an apartment in Washington, D.C. He and his wife also own a condominium in Michigan.
U.S. Rep. Bobby Rush (D-Ill.)
As a congressman, Rush is paid $174,000 a year. Rush's main campaign fund also pays his wife consultant fees. Last year, she was paid $83,049 and she has been paid $39,000 for the first nine months of this year.
Rush and his affiliates cannot escape the tax liabilities altogether, but late payments can have consequences for more than just the congressman.
For Rush, late property tax payments on his residence cost him an additional $6,200 in penalties and fees in the last few months.
For taxpayers, there is the cost of debt collection procedures, and interest paid on government bonds that are sometimes sold to temporarily cover expenses while public agencies await tax revenues.
Reviewing public records, the BGA found that in 2013:
- Rush paid $21,000 in penalties, interest and delinquent property taxes on his South Side home at 35th and Calumet. Some of the payments were five years overdue.
- Beloved Community Christian Church, 6430 S. Harvard Ave., and its social service affiliate, both founded by Rush, had outstanding Internal Revenue Service liens of $161,891 for unpaid employee withholding taxes – which fund Social Security, Medicare and general government expenses.
- The State of Illinois has filed a claim for $5,757 in overdue state income taxes that documents indicate are owed by Rush and his wife.
- Rush also had trouble paying his Buchanan, Mich., condo taxes on time. He still owes some taxes for 2011 and in the past has paid his taxes late.
Several years ago, Beloved's failure to pay property taxes on a building it owned added to the blight in the troubled Englewood neighborhood. The church abandoned the property and it is now a weedy eyesore.
Ending a one-hour interview with the BGA, the veteran congressman stormed out when the issue of unpaid taxes was raised, calling the inquiring reporters "scurrilous."
Two days later, the Rushes paid $15,903 in taxes, fees and penalties owed from 2007 through 2011 on one of the three contiguous lots on which their house and garage are located, according to Cook County clerk payment records.
Then in October, they paid $5,077 to settle the tax debt on another one of the lots for the years 2008 through 2012, county records show.
In both cases, they were just days away from losing ownership – the final court-ordered penalty for nonpayment of the delinquent taxes, Cook County court records show.
It was not the first time the Rushes came close to losing their house for unpaid taxes. In 2009, they saved their house and garage by paying $7,429 in back taxes and penalties, some going back to 2005.
According to the Cook County assessor, the fair market value of the Rush's three-story, four-bedroom masonry house and garage is $383,000.
In Michigan, the Rushes currently owe $1,015 in property taxes and penalties from 2011 on their condominium, according to Berrien County, Mich., records. The taxes have been forfeited to the county and the couple could lose the property if they do not pay them by March 31, 2014, according to the records.
Three years ago, the couple paid $10,513 in overdue Michigan taxes – a few days after their mortgage lender threatened foreclosure citing the tax delinquency.
In 2002, two months after Rush founded Beloved, the congregation received a building at 6540 S. Lowe as a gift. The property – an electric substation decommissioned by long-time Rush ally Commonwealth Edison – was valued at $75,000 by the Cook County assessor.
A banner on the old substation announced Beloved's plans:
"By God's Grace, coming soon
Beloved Community Christian Church
6540 S. Lowe
Reverend Congressman Bobby L. Rush Pastor"
But the congregation never moved into the building, never qualified for a religious tax exemption and failed to pay property taxes. Instead the church continued to hold services in a nearby school, and later moved to its current home, a large English Gothic-style limestone building on South Harvard.
The abandoned ComEd substation is still vacant, and has deteriorated over time. In 2006 city inspectors cited Beloved for failure to remove refuse, creating a potential rat harborage, according to a city order filed with the Cook County recorder of deeds office.
2007 photo of former ComEd substation at 6540 S. Lowe / www.cookcountyassessor.com
In 2008, the church lost ownership, having failed to pay $28,000 in taxes, penalties and fees mounting up over four years. In 2010, the new owner told the assessor the vacant building was "dilapidated . . . [w]e are unable to lease or sell it at the present time."
Rush, an ordained minister with a master's degree in theology, did not respond to written questions about the abandoned substation.
In general, Rush said he had a policy against discussing church matters with the news media. "I'm very careful about which hat I'm wearing when I'm wearing it, and the role of a pastor. I'm not going to expose the church to your questions."
Rush is a long-time member of the House Energy and Commerce Committee with jurisdiction over the energy industry. A year after ComEd donated the excess substation to the church, Rush supported its parent company – Exelon – in its bid to acquire another power company, according to a press release that ComEd issued praising Rush.
Rush's church and its social services arm, Beloved Community Family Services, have also failed to send taxes they withheld from employee paychecks to the IRS.
According to liens filed by the IRS with the Cook County recorder of deeds, the church and its affiliate owed the federal government over $161,000, which includes the employer contributions for Social Security and Medicare, plus payroll and income taxes withheld from employees.
Read more: Rent Rolls
Congressman Bobby Rush appears to be catching a big break on rent for his South Side political office. This may violate federal law, but it isn't the only potential problem with his campaign operation.
The church owed $49,875 for tax years 2006 through 2008.
The family services agency owed $112,016 for tax years 2011 to 2013.
Federal tax delinquencies can have severe consequences. The IRS can seize an organization's real estate or bank accounts, or if the IRS determines the nonpayment was "willful," it could seize assets of the individuals responsible.
Evidence of discretionary spending, while failing to pay the tax debt, can be interpreted as "willful" nonpayment, according to the IRS. In the case of Beloved Community Family Services, records show it chose to purchase a $25,000 house in Englewood in early 2012 at a time it owed federal taxes.
The tax liens, public notices to creditors that the government has a legal claim against property for failure to pay a tax debt, are still outstanding and will not be released until full payment is made. Neither the IRS, Rush nor his wife – who is currently chairman of the social services group – would comment on the tax debt, or whether partial payment has been made.
Beloved Community Family Services executive director Delphine Rankin, reached by phone, said she would have to call back but has since been unavailable for comment.
Rush is president of the church and, according to his financial disclosure forms, was a director of Beloved Community Family Services, which he founded, through 2008.
The Rush family home / BGA photo
The Illinois Department of Employment Security also filed a lien in April to enforce payment of $4,393 in unpaid unemployment taxes by Beloved Community Family Services which works with youthful ex-offenders and at-risk youths in Englewood to help prevent violence and substance abuse. The agency also provides academic enrichment programs for students in Englewood.
And in September, the Illinois Department of Revenue filed a lien against Rush and his wife seeking payment of $5,757 for unpaid personal state income taxes and penalties from 2009, 2010 and 2011, according to the lien document filed with recorder.
And while Rush and his wife are current on the property taxes on their Bronzeville home for the first time in years, Beloved Community Family Services owes $849 in property taxes on the Englewood building it bought in 2012 for $25,000. The taxes were due Aug. 1.
Sandy Bergo and Chuck Neubauer are special contributors for the Better Government Association. They can be reached at firstname.lastname@example.org or email@example.com. BGA Senior Investigator Patrick Rehkamp contributed to this report. To contact the BGA's investigative unit call (312) 386-9201.