How corrupt is Penny Pritzker, Obama’s Sec. of Commerce nominee?

How corrupt is Penny Pritzker, Obama’s latest cabinet appointee?

I mean that question literally. I don’t think we know the degree to which she is corrupt. I’m going to quote Rick Perlstein at The Nation, in part 1 of a two-part report (psst: watch for part 2).

Perlstein is the king of research. Penny Pritzker and her family are queens of the privately held, union-hating Hyatt Hotel chain.

Pay attention, kids (my emphasis and some reparagraphing):

Penny Pritzker’s Commerce (Part One)

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.


Penny Pritzker

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 US 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.

And that just gets you started. This is truly a must-read. Perlstein marshals his facts, and his writing is as clear and accessible as it always is. Do click through. Pritzker is an Obama campaign-funds bundler, by the way. Do you smell a motive for nomination?

Leona Helmsley posing for friends

Leona Helmsley posing for friends

Perlstein closes:

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.

Let’s just see if (a) Senate Republicans are so p-ed at Barack Obama that they 60-vote Penny Pritzker, or (b) Senate Republicans give a bye to Penny Pritzker, one of their own.

Why does Leona Helmsley come to mind? Dunno.


To follow or send links: @Gaius_Publius

Gaius Publius is a professional writer living on the West Coast of the United States.

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