Penny Pritzker nominated for Commerce secretary, Obama pay to play crony, Hyatt Hotels family, Pritzker headed failed Superior Bank, Role in sub prime crisis, Obama campaign finances

Penny Pritzker nominated for Commerce secretary, Obama pay to play crony, Hyatt Hotels family, Pritzker headed failed Superior Bank, Role in sub prime crisis, Obama campaign finances

“We intend to close loopholes that allowed big financial firms to trade risky financial products like credit defaults swaps and other derivatives without
oversight; to identify system-wide risks that could cause a meltdown; to strengthen capital and liquidity requirements to make the system more stable; and to ensure that the failure of any large firm does not take the entire economy down with it. Never again will the American taxpayer be held hostage by a bank
that is “too big to fail.”…Barack Obama

“Democratic presidential contender Barack Obama says he’ll crack down on fraudulent sub-prime lenders. If he really means it he can start by firing his campaign finance chair, Penny Pritzker. Before taking over Obama’s campaign finances, she headed up the borderline shady and failed Superior Bank. It collapsed in 2002. The bank’s sordid story and its abominable role in fueling the sub-prime crisis are well known and documented. It engaged in deceptive and faulty lending, questionable accounting practices, and charged hidden fees. It did it with the sleepy-eyed see-no-evil oversight of federal. It made thousands of dubious loans to mostly poor, strapped homeowners. A disproportionate number of them were minority.

Obama’s home state, Illinois, ranked near the top of thee states in the percentage of sub-prime mortgages. Nearly 15 percent of home loans were sub-prime according to the Mortgage Bankers Association. But that only tells part of the tale. According to the Woodstock Institute, a Chicago non-profit that studies housing issues, the sub-prime fall-out was far higher in the predominantly black and Latino neighborhoods of South and Southwest Chicago.

The predictable happened when many of those lost their homes. When the bank collapsed Pritzker and bank officials skipped away with their profits and reputations intact. Aside from the financial and personal misery sub prime lenders caused the thousands of distressed homeowners, sub-prime lending has been a major cause of the housing crisis in many areas, and has dealt a sledgehammer blow to the economy. Obama has said nothing about Pritzker, Superior Bank, or their dubious practices.”…Huffington Post, February 29, 2008

“One could make the argument that Pritzker was the most important person in Barack Obama’s presidential bid – except, perhaps, for Obama himself. A longtime Obama friend, Pritzker was national finance chairwoman for the Obama campaign throughout his 2008 presidential effort. She helped him raise a record $750 million from a dizzying array of donors.
Obama’s huge fundraising advantage not only gave him clout during the primaries against Sen. Hillary Rodham Clinton (D-N.Y.), but also provided the means to bypass federal funding for the general election and dramatically outspend Sen. John McCain (R-Ariz.)…Washington Post 

From the Chicago Tribune May 2, 2013.

“Penny Pritzker nominated for Commerce secretary”

“Making official what many Democrats have expected for weeks, President Barack Obama has nominated Chicago business executive Penny Pritzker, a longtime political supporter and heavyweight fundraiser, as his new Commerce secretary this morning.

Pritzker’s nomination could prove controversial. She is on the board of Chicago-based Hyatt Hotels Corp., which was founded by her wealthy family and has had rocky relations with labor unions, and she could face questions about the failure of a bank partly owned by her family.

With a personal fortune estimated at $1.85 billion, Pritzker is listed by Forbes magazine among the 300 wealthiest Americans.

If the nomination is confirmed by the Senate, Pritzker would become the first member of her influential family to hold a top-level political office, creating an opportunity to make a name for herself apart from the leadership roles she has played within the family’s many businesses, which in recent years were divested.    

At its peak the Pritzker empire included a bank, a credit reporting agency, an industrial conglomerate, residential developments from coast to coast and the Hyatt Hotel chain, founded by her uncle Jay.

Penny Pritzker runs PSP Capital Partners, an investment firm, and its affiliated real estate investment firm, Pritzker Realty Group. She played an influential role in Obama’s rise from Illinois state senator to the nation’s 44th president, serving as his national finance chair in his first campaign for the White House and co-chair of his reelection campaign.

Obama, in announcing Pritzker’s appointment from the White House Rose Garden, heralded her as “one of the country’s most distinguished business leaders” with more than 25 years experience in real estate, finance and the hospitality industry.”

“The White House conducted an in-depth review of Pritzker’s background in preparation for the confirmation hearings. A senior administration official who asked not to be identified in order to talk about internal White House discussions said the administration concluded Pritzker was “definitely confirmable.”

The president’s vetting attorneys went carefully through her lengthy list of investments and assets, noting what the official called her “rigorous and diligent and thorough” participation in the process.”

“She could also face scrutiny over the collapse of Superior Bank, which was co-owned by her family. The bank, based in Hinsdale, Ill., was involved in subprime mortgage lending, and its failure in 2001 stirred charges of fraud and mismanagement.”

“A major donor to Obama, Pritzker has given hundreds of thousands of dollars to Democrats and their state parties across the U.S. During Obama’s 2008 run for the White House, she was a campaign “bundler” who encouraged friends and associates to give and raised between $200,000 and $500,000 for him that cycle, according to the Center for Responsive Politics

Pritzker also was an Obama bundler during the 2012 race, raising at least a half-million dollars for his re-election. And as co-chair of Obama’s first inauguration, Pritzker just gave $250,000 to help pay for his second one in January, federal reports show.”

Read more:

http://www.chicagotribune.com/news/chi-penny-pritzker-commerce-secretary-20130502,0,4841795.story

From Citizen Wells February 23, 2012.

More on Obama’s 2008  National Finance Chairwoman and economic advisor Penny Pritzker.

From Consortium News February 28, 2008.

“Though Superior Bank collapsed years before the current sub-prime turmoil that is rocking the world’s financial markets – and pushing those millions of homeowners toward foreclosure – some banking experts say the Pritzkers and Superior hold a special place in the history of the sub-prime fiasco.

“The [sub-prime] financial engineering that created the Wall Street meltdown was developed by the Pritzkers and Ernst and Young, working with Merrill Lynch to sell bonds securitized by sub-prime mortgages,” Timothy J. Anderson, a whistleblower on financial and bank fraud, told me in an interview.

“The sub-prime mortgages,” Anderson said, “were provided to Merrill Lynch, by a nation-wide Pritzker origination system, using Superior as the cash cow, with many millions in FDIC insured deposits. Superior’s owners were to sub-prime lending, what Michael Milken was to junk bonds.”

In other words, if you traced today’s sub-prime crisis back to its origins, you would come upon the role of the Pritzkers and Superior Bank of Chicago.”

http://www.consortiumnews.com/2008/022708a.html

From Chicago Magazine December 2002.

“”They were always more interested in building an empire than in getting their name in the newspaper,” says Patrick Foley, formerly president of Hyatt Hotels Corporation. “They just didn’t enjoy that kind of notoriety.”

Last year, however, the Pritzkers found themselves most uncomfortably in the public eye after the stunning collapse of Superior Bank, the Oakbrook Terrace–based savings and loan they jointly owned with the New York real estate developer Alvin Dworman. The institution’s failure is “a tale of gross mismanagement,” says George Kaufman, a finance professor at Loyola University Chicago. “[Superior] was engaged in relatively unethical practices, fancy-footwork accounting, playing it very close to the edge.” Kaufman says many share in the blame for the mess-the bank’s managers, directors, and auditors, as well as banking regulators-but he also wonders how the Pritzkers, as co-owners, could have allowed it to happen. “One of the great mysteries to me is what the Pritzkers were up to, why they took these chances,” he says. “It makes no sense given their wealth and visibility.””

“The family’s most agonizing setback, however, was the stunning collapse last year of the once high-flying Superior Bank. The thrift had come into the Pritzker fold in 1988, when Jay Pritzker and Alvin Dworman-old social friends and partners in several past business ventures-put up $42.5 million for the insolvent Lyons Savings Bank, as it was then called, in return for an estimated $645 million in federal tax credits and loan guarantees. (By one estimate, it would have cost the government $200 million less simply to shut Lyons down.) Although Dworman had agreed to run the renamed Superior Bank out of his New York office, Jay deputized his niece Penny-a Harvard educated go-getter who had just earned her law degree and M.B.A. from Stanford-to help keep tabs on the investment. She served as chairman of Superior from 1989 to 1994, long enough for the bank to regain its financial health and embark on an aggressive new strategy, making high-interest home and auto loans to people with bad credit. For a time, that strategy appeared to work like a charm, yielding big profits-and large dividends for the Pritzkers and Dworman.

In reality, Superior was spiraling into ruin. Although the details are complicated, the bank’s fall stemmed from a risky business strategy and from poor oversight by the bank’s directors, according to investigations by banking regulators. Superior became heavily concentrated in high-risk assets connected with its subprime lending business, and then used “unrealistic and overly optimistic assumptions” to record the value of those assets, according to a report by the inspector general of the Federal Deposit Insurance Corporation. In language redolent of the corporate accounting scandals that have rocked Wall Street recently, the report adds that by using “liberal interpretations of accounting principles” Superior was able to “report impressive net income figures that masked the net operating losses the institution was actually experiencing.” Those phony “profits,” by the way, allowed Coast-to-Coast Financial Corporation, the holding company owned jointly by the Pritzkers and Dworman, to collect more than $200 million in dividends from 1993 to 1999-money the bank desperately could have used as it tottered toward insolvency.

After the Pritzkers and Dworman failed in July of last year to follow through on a plan to inject $270 million into the bank, Superior was seized by the Office of Thrift Supervision and eventually placed in receivership under the FDIC. Last December, to avoid being punished for Superior’s failure, the Pritzkers agreed to pay the FDIC $460 million while admitting no wrongdoing. Because $360 million of that payment was to be spread out interest free over 15 years, the settlement was worth an estimated $335 million in today’s dollars. But that won’t cover all the damage. Even with the settlement, Superior’s failure is expected to cost the federal thrift insurance fund an estimated $440 million.

Meanwhile, the Pritzkers still have not put their Superior troubles entirely behind them. Tom and Penny Pritzker are defendants (along with Dworman, several officers and directors, and the bank’s auditor, Ernst & Young) in a federal civil racketeering suit brought on behalf of Superior’s uninsured depositors (those with deposits in excess of the federally insured $100,000). Although the 1,400 uninsured depositors so far have recovered about 55 percent of the more than $65 million they lost in the collapse, they are still out almost $30 million, according to Clint Krislov, the lawyer for the plaintiffs. By contrast, the Pritzkers may not have fared so badly. Counting the tax credits and deductions they originally received and the dividends they collected over the years, “they appear not to have lost money on the deal,” Krislov says. (A source close to the family says the Pritzkers did lose money in Superior, and asserts that the lawsuit is without merit.)

* * *
The Superior scandal stained virtually everyone connected with it-the bank’s managers and directors, the accountants who signed off on its financial statements, the banking regulators who failed to act aggressively as early as the mid-nineties, when Superior’s problems were fast becoming apparent, and, of course, the owners. As the fallout spread, the Pritzkers worked feverishly to control the damage. They claimed that they had been “passive investors” while Dworman’s people ran the show (Dworman said the Pritzkers shared in the blame). They also made the case that Superior’s auditor had continued to give favorable opinions on the bank’s accounting over the years. On that score, the Pritzkers appeared to gain some vindication in early November of this year when the FDIC sued Ernst & Young for fraud in its audit of Superior, and sought at least $2.19 billion in punitive and compensatory damages. (Ernst & Young denied responsibility for Superior’s collapse and said it would vigorously fight the charges.)

To some, however, the Pritzkers were hardly the innocents they made themselves out to be. The family, after all, controlled half the board seats of the bank’s holding company, which benefited from all that dividend income, and the Pritzker Organization’s chief financial officer, Glen Miller, chaired the bank’s audit committee. Although Penny had stepped down as the bank’s chairman in 1994, she remained a director of its holding company.

“No one should have had any illusions about what was going on,” says Bert Ely, a banking consultant in Alexandria, Virginia, who tracked the Superior story. “[Superior] was reporting gains that were unrealistically high, which allowed [it] to pay big dividends [to the Pritzkers and Dworman]. It was a lot like Enron and WorldCom-reporting profitability that wasn’t there. Their financial people should have been able to figure that out. If they truly didn’t understand the bank’s fundamentally unworkable business model, then the Pritzkers have bigger problems than Superior.”

The Pritzkers said in a statement that the settlement was simply “the right thing to do,” reflecting the family’s “historical commitment to stand behind their investments.” That may have been true. But it also entitles them to 25 percent of any sum the government collects in its $2.19-billion suit against Ernst & Young. Beyond that, the settlement made an ugly story go away. “I am convinced that the Pritzkers wanted to get their name off the front page,” says Ely. “They had stepped into a pile of horse manure, and they were highly embarrassed.””

http://www.chicagomag.com/Chicago-Magazine/December-2002/Tremors-in-the-Empire/

http://citizenwells.wordpress.com/2012/02/23/penny-pritzker-obama-2008-national-finance-chairwoman-economic-recovery-advisory-board-skills-for-americas-future-obama-council-for-jobs-and-competitiveness-superior-bank-origin-of-sub-pr/

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7 responses to “Penny Pritzker nominated for Commerce secretary, Obama pay to play crony, Hyatt Hotels family, Pritzker headed failed Superior Bank, Role in sub prime crisis, Obama campaign finances

  1. Notice how everyone Obama chooses has some kind of Muslim or Iranian connection?

    Valerie Jarrett — Personal avisor, Iranian born
    Joe Biden — VP, backed by Iranian lobby
    John Kerry — Sec of State, Iranian son-in-law
    Chuck Hagel — Sec of Defense, voted against sanctions against Iran while a Senator
    Brennan — CIA Director, pro-Muslim (thought to be a possible convert to Islam)

    And now Pitzker. See the following from2008:

    http://mediamatters.org/research/2008/09/23/ksfos-rodgers-baselessly-claims-pitzker-is-th/145188

    The article tries to say Ahmadinemad coming to the Hyatt was without Pitzker’s knowledge, but was it? What is the connection here?

  2. This administration is just like where I used to work.I say this because,the company I worked for did the same thing.You know that old saying, Those that don’t know how teach.Also he can’t put anybody that is smarter than he is.

  3. SueQ | May 2, 2013 at 1:43 pm |

    CW,
    I pray that you are able to distinguish your friends from your enemies.You’ve known us long enough to know where we’re coming from.

  4. Mr. Bill(ms. helga)

    This gives new meaning to “flaunting it in your face.”

  5. “In other words, if you traced today’s sub-prime crisis back to its origins, you would come upon the role of the Pritzkers and Superior Bank of Chicago.”
    **************************
    Great guns, Obama and cohorts are back at it again if you’ve been noticing the latest TV ads urging homeowners who are “underwater” to refinance. Certain requirements must be met, but the illustration given is that if you owe $300K on your home presently worth $150K, you should call, because there is hope promised by the gub-mint. This will be right up Pritzker’s alley. Another bailout down the road?

  6. Penny Pritzker is evil and obama doesn’t care. It shouldn’t come as a shock to anyone.

    snipped from http://www.sherrytalkradio.com/transcribe/2012/01-16-12.htm

    I don’t think they were yesterday, over the weekend, because it was the donkey show time. They have these rituals where they bring in animals. And this weekend, pretty much all the groups had donkeys. And they force all the member to have sexual relations, bestiality, with the donkey. Now could you imagine Penny Pritzker in Chicago with her little clipboard, and you know, it’s the bestiality weekend. All the groups are celebrating bestiality. The high priest is the one who decides who gets what. So can you imagine Penny Pritzker sitting there with her clipboard, “OK, you. You’ve been on my nerves for two months. You get the cat.” “And you. You’ve been on my nerves for a month. You get the dog.” “And you. The highest-ranking of us all. You get the donkey.” She chooses who gets what. And she forces them to be sodomized. They all do this. Not just her.

    They force them to be sodomized by donkeys. They force them to perform fellatio on donkeys. And nobody gets away with it. Just because you’re the president of the United States who goes to the Chicago ones where Penny Pritzker’s in charge–just because you’re the president doesn’t mean you get out, it means you have to give more. Because you’ve got the highest rank in the land, more abominable things are expected of you. Yeah. Can you imagine that? They don’t have time to pay attention to the misery and suffering of Americans because they’re too busy creating it. They want Americans to suffer. They don’t have time to read legislation. They’re too busy getting sodomized by donkeys. This stuff goes on, folks. The Lord wants it exposed. I’m exposing it. It goes on.

    snipped from http://www.sherrytalkradio.com/transcribe/2012/01-23-12.htm

    The Correlation Between Hitler and Our Leaders Today

    Yeah, these are the people that we think are the elite above us. I hate the word elite because they’re just scumbags. All of ‘em. You know, Henry Kissinger, Karl Rove, Ted Turner, the Clintons, the Bushes, the pope, the Queen, the Royal Family, Ben Bernanke, Penny Pritzker, Nancy Pelosi, Hillary Clinton, Condoleezza Rice. They’re all in it, folks. They don’t wanna save America, they wanna destroy America. They wanna get control of the world’s resources so that when America is destroyed, they still own all the world’s resources amongst themselves. They don’t care about the country America. They’re in a faction, a Satanist faction. All their own little group. And they wanna control the world’s resources.

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