Democratic President Picks Anti-Labor Tax Evader for Commerce Post
By William Boardman
Penny Sue Pritzker Traubert by [fryingpannews.org]
Had She Offered Them Her Ring, They Would Have Kissed It
While the fawning millionaire courtiers who populate the United States Senate fall all over themselves to smooth the way for Chicago billionaire Penny Sue Pritzker Traubert to become the next Secretary of Commerce, one might wonder what the country is getting here. In terms of hope and change, for example, what might Pritzker (she goes by her maiden name) portend in light of her public record?
On May 2, President Obama nominated Pritzker, his formidable fund raiser for more than a decade, to fill the vacancy at the Commerce Dept. With an estimated net worth of $1.8 billion, Pritzker, 54, is married to Dr. Bryan Traubert and they have two children, Rose Pritzker Traubert and Donald Pritzker Traubert. Pritzker is a graduate of Harvard College, 1981, and Stanford Law School, 1984.
In the early 1990s, she was on the board of a family-owned bank that was a pioneer in the subprime loan business. The Pritzger family bank, Security Bank in Illinois, was also a pioneer in packaging all-but-worthless loans into all-but-worthless securities that the bank sold to unsuspecting customers. Security Bank failed in 2001, at the time the largest bank failure in a decade. Accused of unsound financial activities and predatory lending, the Pritzkers agreed to pay the U.S. government $460 million in fines (over 15 years) -- a settlement in which Pritzker and her bank naturally admitted no wrongdoing.
"It was the right thing for us to do, because both for the depositors and for us as a family," she testified before the Senate Commerce Committee on May 23.
Pritzker filed a financial disclusure sratement with the Office of Government Ethics as part of her nomination process. The 184-page document under-reported Pritzker's annual income by $80,000,000 -- she blamed the $80 million omission on a "clerical error" when she filed a correcting amendment. No Senator asked her about this error, perhaps feeling that it was the sort of $80 million omission anyone could make. None of the Senators chose to put this omission in perspective by comparison with the $10 million lost by her uninsured bank depositors or with the bank failure's $236 million cost to U.S. taxpayers despite the settlement payment.
Pritzker: "I Feel Very Badly" About My Bank's Shady Practices
In a widely-used soundbite, Pritzker answered a softball question from South Dakota's Republican Senator John Thune about her bank by saying: "" I regret the failure of Superior Bank, it's not an outcome or a situation, that I'm, you know, I feel very badly about that. The lessons that I learned are really about good management, good governance structure, the importance of diversification and risk management, transparency and good governance."
The Pritzker fortune, estimated at $19.5 billion, has been in litigation and negotiation for most of the past decade, and Pritzker has been in the thick of it. She is one of the eleven cousins and heirs who have been arguing over whether to preserve the fortune as a single entity or divide it among the cousins. Pritzger was a key negotiator in this argument, and its demands reportedly led her to withdraw from consideration as Commerce Secretary in 2008, when her name was floated as a possibility.
The cousins resolved their inheritance dispute resolved in 2011, by dividing the fortune into eleven shares. Each of ther cousins now ranks on the Forbes 400 list of richest Americans, from 159th to 359th (Pritzker is 263rd). Part of the complexity in the distribution of the fortune involved adjusting various off-shore holdings (such as trusts in the Bahamas) that allowed the family to achieve significant tax avoidance. For her efforts in this and other family financial arrangements, Pritzker received a payment of $53 million in 2012.
Forbes Suggests Congress Explore Pritzker Tax Haven Schemes
Writing for Forbes on May 18, Stephane Fitch described some of the intricacies of the Pritzker family finances, at home and abroad: