President Barack Obama has turned to a billionaire heiress who raised at least $1 million for his presidential campaigns to help repair frayed relations with the wealthy by serving as Secretary of Commerce. An heiress to the Hyatt Hotels (2011 revenues: $3.7 billion) fortune, Chicagoan Penny Pritzker carries such significant baggage that the administration decided in 2009 not to nominate her to Commerce despite the President's stated wish to do so. Among other things, Pritzker was chair of a bank that failed because of subprime loans, Hyatt is a staunchly anti-labor hotel chain, and many believe that the murky overseas investments of the secretive Pritzker family fortune represent a form of offshore tax evasion—a practice criticized by Obama during the 2012 campaign.
Born May 2, 1959, the daughter of Sue (née Sandel) and Donald N. Pritzker (1932–1972), co-founder of Hyatt hotels, which grew dramatically while he was president from 1959 to 1972. After graduating Castilleja School in 1977, Pritzker earned a BA in Economics at Harvard in 1981 and a JD/MBA at Stanford University in 1984.
Having grown up in an exceptionally wealthy family, Pritzker, whose net worth is about $1.85 billion, pursued a business career, mostly in managing the family's vast and complex assets, which are worth billions, all the while sitting on various boards of family companies including that of Hyatt Hotels,. Among the companies she founded or co-founded are Classic Residence by Hyatt (now called Vi) in 1987; Pritzker Realty Group in 1991; The Parking Spot, an off-site airport parking management company, in 1998; Artemis Real Estate Partners, a real estate investment management company, in 2010; and PSP Capital Partners in 2012.
Meeting Barack Obama shortly before his 2004 U.S. Senate campaign, Pritzker became a supporter. She was the national finance chair of Obama's presidential campaign in 2008 and was national co-chair of Obama for America 2012. Although she ran outreach to small donors, on July 2, 2008, she and her husband hosted a $28,500 per plate fundraiser for Obama's campaign in Chicago. She has also been a campaign bundler, encouraging friends and associates to give, and raising between $200,000 and $500,000 for Obama in 2008 and at least $500,000 in 2012. A co-chair of Obama's first inauguration, Pritzker gave $250,000 to help pay for his second one in January, according to the Center for Responsive Politics.
Over the years, Pritzker and her husband have donated $55,600 to Obama, more than triple the $14,200 the Pritzkers gave to their second-ranking recipient, Sen. Dick Durbin (D-Illinois). Pritzker also gave about $120,000 to various Democratic party committees in the 2010 and 2012 campaign cycles combined.
Although they donated almost exclusively to Democrats, thefewer have been exceptions, including $1,000 to George W. Bush in 2000, another $2,000 in 2004 for his re-election, and donations to Sen. John McCain (R-Arizona), former House Speaker Dennis Hastert (R-Illinois), former Rep. Tom Campbell (R-California) and a few others.
Pritzker will have to answer questions about the collapse of Superior Bank, which was co-owned by her family and of which she was chair from 1991 to 1994. The bank aggressively pursued subprime mortgages and car loans, and its failure in 2001 led to charges of fraud and mismanagement. When the dust had settled, the Pritzker family obtained an unusual deal allowing themselves, as bank shareholders, to be paid from recovered assets ahead of depositors, even as 1,406 uninsured depositors lost their savings. The fact that the Pritzkers had bought their share of Superior Bank using federal tax credits—essentially free taxpayer money—will only add fuel to the fire at her confirmation hearing, although it will be odd to see Republicans making such criticisms.
Pritzker's nomination has already drawn fire from labor leaders, owing to Hyatt Hotels' longstanding and well-earned reputation as an anti-labor hotel chain. Hyatt, on whose board Pritzker sits, has resisted unionization for years, fighting long battles in Los Angeles, Chicago and elsewhere. Even where a union has been certified, like Unite Here Local One in Chicago, Hyatt does not give an inch, and remains locked in a four-year labor dispute there over contract provisions. Last year, Unite Here launched a boycott of Hyatt, which has garnered wide support.
Pritzker is no more popular with the Chicago Teachers Union, which has been critical of her tenure on the Chicago School Board, from which she resigned in March 2012, because of her support for charter schools, school closings and increased testing. Kristine Mayle, the union's financial secretary, told the Chicago Tribune that “We know Penny Pritzker has a long and storied history as an anti-labor and anti-worker kind of boss. Her policies adversely affect working families. She has worked to close schools and destabilize neighborhoods, and we hope she does a better job in her new position, if she gets it.”
The murkiness of the Pritzker family finances can only add to the populist coloring of the criticisms apt to be leveled at Penny Pritzker, and the fact that she served as Chairman of the Board of credit reporting company TransUnion, LLC, from 2005 to 2012, is icing on the cake, for no one really likes the credit reporting agencies.
Penny Pritzker is married to ophthalmologist Bryan Traubert, with whom she has two children.
-Matt Bewig
To Learn More:
Penny Pritzker Nominated for Commerce Secretary (by Christi Parsons, Melissa Harris and Katherine Skiba, Chicago Tribune)
Cabinet Pick’s Finances May Foreshadow Battle (by Charlie Savage, New York Times)
Penny Pritzker's Commerce (Part One) (by Rick Perlstein, The Nation)
Penny Pritzker's Commerce (Part Two) (by Rick Perlstein, The Nation)
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