President Barack Obama on Thursday nominated Democratic bundler and longtime Chicago insider Penny Pritzker to head the Commerce Department.
“She has been an extraordinary civil leader in our shared hometown of Chicago,” Obama said, adding that Pritzker’s “extraordinary” background in business proves that government is no replacement for the drive of an entrepreneur.
Pritzker, a billionaire Hyatt hotel heiress, will fill a cabinet post that has been vacant since former Secretary John Bryson resigned in June 2012 after he said he suffered a seizure that led to a series of traffic collisions.
If confirmed, Pritzker would become the fourth woman serving as secretary in Obama’s current cabinet. She also would be the wealthiest cabinet member by far, with Forbes estimating her net worth at $1.85 billion and ranking her as the 277th richest American.
Bloomberg notes her professional experience: “The Chicago businesswoman has developed a skyscraper in her hometown, worked as president of a commercial real estate and luxury senior housing company, and served as chairwoman for a credit-reporting company.”
But her background comes with some questions.
“She and her secretive family have been caught up in some pretty dodgy commercial ventures including but not limited to dodging taxes and running a bank that specialized in subprime mortgages,” The Atlantic notes.
The report continues:
Back in 2008 when she was “widely reported to be a leading contender for commerce secretary,” The New York Times laid down some difficult truths about Pritzger. It’s true that 53-year-old woman — then just 49 — has managed a number of businesses in her career. Unfortunately, one of them was Superior Bank which, in The Times‘s words, “focused on bundling subprime mortgages into securities, the practice that later helped set off the current financial crisis.” Oops.
That bank went under in 2001, but not after the Pritzker family agreed to pay $460 million in damages to depositors. Her involvement in Superior Bank would be trouble enough in a Senate confirmation hearing, but Pritzker’s family is also well known for their tax avoidance techniques. Borrowing The Times‘s wording again, “The Pritzkers were pioneers in using tax loopholes to shelter their holdings from the Internal Revenue Service, and many of their dealings have never been made public.”
These and similar allegations may hold up the confirmation process.
In fact, as noted in the above, her “shady” background was the reason she removed her name from consideration when she was nominated for the gig in 2008. Or, you know, Congress can choose to ignore these issues and move forward with the nomination of one President Obama’s chief fundraisers.
Pritzker is a lifelong Chicagoan who has known Obama since the 1990s and raised hundreds of thousands of dollars for both his presidential campaigns.
She personally generated roughly $745 million for the 2008 Obama campaign and brought in another $53 million for the inauguration, according to the Financial Times.
She was his finance chairwoman in 2008 and served as co-chair of Obama for America 2012.
She was a fearless leader for his candidacy “who never wavered, never waffled and cracked the whip with grace and good cheer,” the president said.
Obama selected her for his 16-member Presidential Economic Recovery Advisory Board in 2009. When his administration let that board expire, Obama included her in his 26-member Council on Jobs and Competitiveness.
Pritzker has led several companies and currently serves as chair of investment firms Pritzker Realty Group and Artemis Real Estate Partners. She’s also on the board of the Hyatt Hotels Corp., the chain co-founded by her father.
She resigned from the Chicago Board of Education in March as she was being vetted for the Commerce nomination.
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The Associated Press contributed to this report.