Tuesday, May 07, 2013

Penny For Your Thoughts


Over the weekend, we took a look at Obama's most vile nominee to date, shady billionairess Penny Pritzker. It's hard to imagine an already obstructionist Republican caucus in the Senate is going to let this one through, but who knows... maybe their admiration for his record of criminal endeavor will outweigh their loathing for Obama! Yesterday, Chicago-based historian, Rick Perlstein, took to the pages of The Nation to explain what's so wrong with Pritzker... and Obama's decision to give her a Cabinet position. Like all progressives, Perlstein is fed up with Obama's corporatist decisions to push through Republican proposals that harm the most fundamental progressive achievements in history, like the Chained CPI proposal to help wreck Social Security. He sees Obama's choice of Pritzker as part of an emerging picture of an Obama "unfettered from the constraints of reelection."
In December of 2008, Obama's choice for Secretary of Commerce, Chicago-based business tycoon Penny Pritzker, withdrew her name from consideration in the face of a triple-barreled onslaught. First, there was her position on the board of Superior Bank, which her family bought with the help of $645 million in tax credits for the federal government. In 2001, Superior collapsed, after pioneering the bottom-feeding trade in subprime mortgages. In In These Times, David Moberg called it a "mini-Enron scandal"; 1,406 uninsured depositors lost their savings. Here was what one of the victims had to say: "The Pritzkers are crooks. They don't care anything about people who spent their whole lives trying to save." And here is how Penny responded: "We had seven years of clean audits and then the auditors said, 'Well, maybe we'll change the way we calculate.'" Exquisite humanity, that. The family coughed up $435 million in settlement money in exchange for not having to admit any wrongdoing. But why, Penny was asked, would they pay half a billion dollars to clean up a mess she said was none of their fault? Because, she answered, "My family is not going to litigate with the federal government at a time like this"-- a reference to the September 11 attacks; classy.

Here was the second concern which kept her from the Commerce Department in 2008: "Whether she could disentangle herself," as the Washington Post put it, from her family's "vast financial holdings"-- many of which they would prefer not to see scrutinized in public. How vast? Well, way back in 1973, the New York Times reported of "The Very Private Pritzkers," "The family law firm, Pritzker & Prizker, hasn't accepted an outside client for thirty years because of the potential conflict of interest with the Pritzker enterprises, which are too numerous for any one member of the family to recall at any given moment." In 1982, when the list became public for the very first time-- more on why later-- the holdings included at least 216 separate corporate entities, from mining to motels. One current holding is TransUnion-- Penny is chairman of the board-- which is one of three companies controlling the creepy trade in credit reports. “After widespread consumer complaints about shoddy service in the credit checking industry," Bloomberg reported back in 2008, "the U.S. Congress passed legislation in 2003 that allowed people to obtain free copies of credit reports so they could check for mistakes and block information obtained from identity theft. That same year, a jury awarded Judy Thomas of Klamath Falls, Oregon, $5.3 million after she claimed TransUnion took six years to correct a mistake in her credit report." Penny's reaction? Public-spirited as ever: "the company has always encouraged consumers to monitor their reports, Pritzker says."

The third reason Obama chose not to risk political capital on a Penny Pritzker nomination fight is that unions despise her. Among the reasons: the Hyatt hotel chain, which the Pritzkers built practically from nothing, is infamous for just about the worst treatment of their staff in the business. (Here's a moving first-hand account.)

Rahm, Volcker, Pritzker
Since that near-nomination, Chicago's new mayor, Rahm Emanuel, chose Penny Pritzker to join the mayor-appointed school board-- a body, as I've been documenting here, that has fanatically devoted to breaking the Chicago Teachers Union, and turning over the system to charter school operators. Their excuse has been the school system's alleged $500 million deficit. Which is where Penny comes in. For while the city's budget for schools is alleged to be bare, the city's tax increment financing (TIF) fund, a slush pile for rich developers, carries a surplus of at least $500 million. What does this have to do with Penny Pritzker? Well, as it happens, on my very street, she is building a Hyatt financed with $5.2 million in TIF funds. As the Chicago Teachers Union points out, the TIF fund is controlled personally by the mayor; members of the school board (from which Pritzker recently resigned ahead of her Commerce appointment), overwhelmingly his rich campaign backers, are personally appointed by the mayor; and nothing's keeping them from leaning on the mayor to tap the TIF surplus to plug the school deficit-- except the fact that this very deficit is the rhetorical foundation for all the things they're doing to weaken the union. All in all, Penny Pritzker's relationship with labor has become exponentially worse since her near-nomination in 2008.

So how has second-term Obama responded? By re-nominating her.

It should make for some interesting confirmation hearings. This family is famously secretive. In 2003 two family scions, siblings Liesel and Matthew Pritzker, sued their father Robert Pritzker for $6 billion, claiming he had looted their trust fund. In 2004, a judge gave them access to sealed financial reports. Explained investigating reporter Gus Russo, "that unearthed a secret family deal cut after Liesel's uncle Jay Pritzker's death in 1999, a plan that would have broken up the fortune into eleven shares valued at $1.4 billion each. In early 2005, rather than expose the complicated Pritzker offshore shelters to the light of day, the Pritzker family put the final touches on a private settlement agreement" giving Liesel and Matthew Pritzker upwards of $500 million each to drop the case.

...If Republican senators have any strategic sense, they'll be asking in open hearings about this sort of stuff: how the Pritzkers came by all those billions in the first place, how they've kept it from the view of the public and the taxman both, and what it is they've been so eager to hide. I'll have more to say about that tomorrow. To put it lightly: It's not the kind of thing Barack Obama needs America to hear about one of his cabinet appointees.
All too often the last defense Democrats can make about supporting one of their wretched, corrupt, cowardly candidates is that at least he's better than a Republican and that at least the Democratic Party is better than the Republican Party. If the GOP weren't on an extremist binge, Obama's most marked accomplishment of his first 5 years would have been to level that playing field.

UPDATE: Oy... The Mafia too?

Perlstein isn't looking for any invitations to the White House Easter Egg Hunt. Today The Nation published Part 2 of his Pritzker exposé... and, to put it mildly, it's really damning.
Did you know that in the early 1970s, the Internal Revenue Service investigated the Pritzker family, whose scion Penny Pritzker has just been tapped by President Obama to become Secretary of Commerce, because their Hyatt Corporation was paying no taxes? And that in the course of the inquiry, an IRS statement quoted an informant with access to the records of the offshore bank where they hid their assets that the family, “through their Hyatt Corporation, received their initial backing from organized crime”?

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At 5:42 PM, Anonymous me said...

I've been saying for years that Obama sucked. After reelection, he sucks worse than ever.

I'm one of those who has a friend who kept on saying that 1, Obama will be better after the election, and 2, But McCain/Romney/Whoever is so much worse.

Well of course the opponents are worse. They are SUPPOSED to be worse - that's their job! To make you vote for someone bad, the corporations make the only alternative even worse.

Get used to it, folks. The corporations will never allow someone good to become president.


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