Tax Problems For 5th District Candidate Ratowitz? (Illinois Primary, Fed 2)

David Ratowitz is presenting himself to voters as the business oriented, conservative candidate for their 5th District Congressional seat. Ratowitz says he represents “hard-fought professional achievement” and “personal resilience,” and says his “genuine free market outlook” makes him the perfect candidate for conservatives. Also, many of Mr. Ratowitz’ press releases state that he’s for fiscal responsibility and have taken the Obama administration to task for its bad fiscal policies. (

So, one would assume that Mr. Ratowitz’ own history should be above reproach. If not pristine, one would hope that any past business troubles or tax issues would be few and far between. After all, everyone makes a few mistakes especially if they are active businessmen.

Now, between 2000 and 2007 Mr. Ratowitz was a businessman in New Orleans, Louisiana. On his campaign website he admits that hurricane Katrina wrecked havoc with his business, but he says he “worked on the ground to rebuild his business and community.”

But perhaps his success in Louisiana isn’t quite as advertised? Public records show that Mr. Ratowitz is still in arrears in his property taxes in the Pelican State. The property tax website for the City of New Orleans shows that Mr Ratowitz still owes quite a lot of money in past due property taxes.

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The New Orleans website shows the following real estate taxes in arrears:

  • For property at 1119 Terpsichore St, Mr. Ratowitz seems to owe $15,920.81 (record 101105116)
  • For property at 1113 Terpsichore St, Mr. Ratowitz seems to owe $1,069.58 (record 101105115)
  • For property at 3931 Annunciation St, Mr. Ratowitz seems to owe $8,624.07 (record 614107102)
  • For property at 1323 ST Mary St, Mr. Ratowitz seems to owe $11,140.15 (record 412100111)

Then there is the Limited Liability Corporation called Ratowitz, LLC that had its license revoked by the State of Louisiana on May 22, 2003. One wonders what caused the State of Louisiana to revoke Mr. Ratowitz’ license? (search for the last name Ratowitz in the search field HERE)

All of these taxes seem to have come due long before Katrina came bellowing through New Orleans, too. So, it’s a bit hard to imagine that this natural disaster was at the root of Mr. Ratowitz’ troubles. Granted that messy storm didn’t help anyone there.

Anyway, it is all pretty interesting and one wonders what Mr. Ratowitz might say about these issues. I contacted the Ratowitz campaign and presented him with this post and asked for a statement.

I was told that they’d get back to me on the Sunday before the primary. Candidate Ratowitz gave an extensive reply, so here it is in its entirety:

The properties at 1113 and 1119 Terpsichore, New Orleans were sold last November. The taxes were paid at that time, I don’t know why Orleans Parish, LA has not updated the tax records but that is a situation for the new owners and Orleans Parish to resolve. The other two properties are tied up in my divorce proceedings, my ex-wife who intends to move back to New Orleans now controls those properties. One of them, 3931 Annunciation, New Orleans is under contract and the taxes will be paid upon the sale, with the remaining proceeds used to pay off the outstanding tax bill on 1323A St Mary, New Orleans. The other property is a condominium which I believe my ex-wife intends to move into. When the divorce is finalized title will transfer.

Ratowitz, LLC was an entity formed to develop a single property. That property was developed and sold and the Limited Liability Company dissolved. Louisiana, like all states provides two methods to dissolve a limited liability company. The owners can pay a fee to formally dissolve the company, or they can simply not pay the annual fee and the Secretary of State will dissolve the company by default. Not paying the fee is the way most limited liabilities companies that no longer have any assets are dissolved.

The claim that these property taxes were owed prior to Hurricane Katrina is simply incorrect. Three of the four properties mentioned, I did not even own until after Hurricane Katrina.

I disagree with your contention that my business should be “pristine.” Business, particularly small business is never pristine. When I tell a group of voters that I am a small businessman, it is not to tell them that I am “pristine” or insulated from the problems and complications they face on a daily basis and which they expect their Congressman to address. Rather, I tell voters that I am a small businessman so that they will know I have faced the same problems they have, that I have resolved them without government assistance, and therefore I am the only candidate in the 5th District race they can rely on to say no to any business that claims: “We have made decisions that turned out badly and we need taxpayer money to bail us out.”

My business was the development, ownership and management of property in New Orleans, LA. All of my properties were damaged beyond use by Hurricane Katrina. It was more than six months before I had any property in usable condition, and it took more than a year to return all of the properties to marketable condition. During this period, when I lacked to ability to generate revenue, interest, utilities and property taxes continued to accrue. By the time my properties began generating revenue, the business was already in a deep hole. Insurance too was slow in coming and then not without a fight. I settled insurance claims as recently as September, 2007. To this day, I have four outstanding insurance claims, ironically all with the State of Louisiana.

All small businesses face cash shortfalls from time to time. Eighteen months after Hurricane Katrina, and shortly after I had returned my properties to marketability the real estate market began a decline that continues to this day. I do not need to remind anyone of the foreclosure crises or the large number of Americans in the real estate business that have faced financial ruin. I did not become a successful businessman because I remained magically unaffected by the market forces that ravaged my industry. Rather, my success came from confronting and overcoming those forces, in this case through personal sacrifice and shrewd and pragmatic use of limited cash.

Naturally, I agree that a candidate for public office must explain a decision to stretch scarce cash by deferring payment of property taxes. In my case, the decision was based upon the fact that the properties in question had enough equity to pay the associated property taxes upon their sale. Further, Orleans Parish, like Cook County and many counties throughout the country has the ability to bond outstanding property taxes along with penalties and interest and sell that bond to an investor. This means that Orleans Parish immediately realizes the tax revenue along with the interest and penalties, an investor realizes a profit when I pay those taxes, and I am the only one who suffers from the difficult decision forced upon me. While I recognize this was a difficult situation, I have resolved it through personal sacrifice and without cost to the taxpayers.

America faces a severe financial crises. While some people prefer a made-for-TV politician, unsullied by the real world challenges faced by voters in the 5th Congressional District, I point out that we elected such a candidate as President and that has not worked out so well. Now is not the time for inexperienced leaders who must learn on the job. I offer my own experience, the good, the bad, and the ugly to the voters as the only candidate in the 5th Congressional District race to have actually dealt successfully with the very challenges in my own life that I will be called upon to deal with as Congressman.

I thank you for this opportunity to reply.

David Ratowitz

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