Penny Pritzker Obama 2008 national finance chairwoman, Economic Recovery Advisory Board, Skills for America’s Future, Obama Council for Jobs and Competitiveness, Superior Bank origin of sub prime crisis

Penny Pritzker Obama 2008 national finance chairwoman, Economic Recovery Advisory Board, Skills for America’s Future, Obama Council for Jobs and Competitiveness, Superior Bank origin of sub prime crisis

“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 

“Why did Obama employ Robert Bauer of Perkins Coie, to request an advisory opinion on FEC matching funds that he was not eligible for?”…Citizen Wells

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/

 

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26 responses to “Penny Pritzker Obama 2008 national finance chairwoman, Economic Recovery Advisory Board, Skills for America’s Future, Obama Council for Jobs and Competitiveness, Superior Bank origin of sub prime crisis

  1. seems like no matter what we post it falls on deaf ears. opps they’ll find a way to tax deaf ears

  2. Tuesday, February 21st, 2012 | Posted by Gordon Duff
    Intel Exclusive: Trillion Dollar Terror Exposed

    http://www.veteranstoday.com/2012/02/21/intel-exclusive-trillion-dollar-terror-exposed/

  3. One of the penalities for refusing to participate in politics is that you end up being governed by your inferiors. Plato

    The truth will survive the ages.

  4. CW,
    I been coming to this site for years. I can’t believe the corruption you uncover. I am also amazed at the ignorance of our major media to the corruption. I can say that you have opened the eyes of at least one American.

    Pete

  5. Thanks Pete.
    The amount of corruption & coverup is staggering.

  6. A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly.

    But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist. A murderer is less to fear. The traitor is the plague.

    Marcus Tullius Cicero

  7. Campaign for Ron Paul Fingered, Attacking Gingrich & Santorum for Romney
    http://gulagbound.com/26476/campaign-for-ron-paul-fingered-attacking-gingrich-santorum-for-romney/
    What is behind this Alinsky-style pattern of attack?
    We suggest one possible answer to this riddle is Ron Paul’s principle political benefactor, globalist financier and libertarian activist for the homosexual agenda, Peter Thiel.
    As has been noted:
    Romney is the U.N. Agenda 21 candidate favored by the bankster/globalist manipulators; a very alarming, perhaps treasonous alliance
    Romney has a track record of strong ties to the homosexual agenda
    The global governance (para-Marxist) movement is about sexual as well as socioeconomic revolution
    Ron Paul has numerous problematic liaisons that call his conservative persona into question
    For more on Thiel, see “Follow Ron Paul’s Money too: Peter Thiel, Globalist, Bilderberger, GOProud Activist.” For more on the candidate in question, see the Gulag Bound tag, “Ron Paul.”

  8. I said it once before and I will say it again.

    CW is a true investigative journalist who puts those in the lame street media to shame. The so called anchors in the media could learn quite a few things about journalism and news reporting from CW if they were willing to tell the truth rather than a slanted bias story that advances the liberal cause.

  9. coldwarvet | February 23, 2012 at 3:28 pm |

    Bob Strauss
    Hi Bob,
    Yes I’m aware of Corsi as I’ve been on this thing from the start (07) and all the others involved in the early days of the court challenges. I even lend a great amount of credence to the evidence Orly has gathered. I must admit to this being an untried venue, and probably one that should have been followed from the start (as opposed to going directly to the courts)…kind of a chain of command sort of thing.. ?.( but I realize also time was of the essence)
    *******************************************
    coldwarvet,
    One thing we must remember, this is about ballot access for Obama, and Sheriff Arpaio’s duty to prosecute ID theft,when he finds a fraud like Obama using phony ID to defraud the voters.

    I think this one is going to a grand jury.

  10. Philo-Publius | February 23, 2012 at 7:50 pm |

    I said it once before and I will say it again.

    CW is a true investigative journalist who puts those in the lame street media to shame. The so called anchors in the media could learn quite a few things about journalism and news reporting from CW if they were willing to tell the truth rather than a slanted bias story that advances the liberal cause.
    *************************************************
    It looks like one big RICO case. Everyones breaking the law and the media is Hear no evil, speak no evil, see no evil, covering for the criminals.

  11. Now does this sound like NWO speak or what!:

    Va. lawmakers halt anti-abortion ‘personhood’ bill

    http://www.msnbc.msn.com/id/46504390/ns/us_news/

    Now I’ve always wanted to hear these “brains” let us know exactly what moment did they become a “person in the full sense”. Was it at 7 mos. 3 days at 10:30 p.m.? Or perhaps at the moment just before when the brains are sucked out and delivery of a dead baby occurs? Or the moment after an intended aborted baby is delivered alive and left to die? They had better make up their minds so that their Omessyiah can have an excuse for his infanticide. As was often said….if a hunter sees the rustling of bush, but doesn’t know if it’s human or animal at the moment, he just doesn’t shoot.

  12. Just a question for any of you out there. What happens in the case of an adoption in terms of natural born citizenship? Let’s say a US born child is adopted at birth and his adopted parents were born in the US, but the child does not know the status of their birth parents. Which do you go by; the adopted parents or the birth parents because adoptions are often sealed by law?

  13. Lew Rockwell Dispells Ron Paul VP Rumor as “Establishment Trick”

    “If doesn’t come out of Ron Paul’s own mouth, it isn’t attributable TO him! Only Ron Paul speaks for Ron Paul!”

  14. Rob………………..
    Now the father will most likely expect to be tried under Sharia law.

  15. REVEALED Romney’s Top Funders Made Billions on Auto Bail-Out

    - Thanks to Mark

    by Greg Palast

    02/23/2012

    http://www.nationofchange.org/revealed…

    Republican Presidential candidate Mitt Romney called the federal government’s 2009 bail-out of the auto industry, “nothing more than crony capitalism, Obama style… a reward for his big donors to his campaign.” In fact, the biggest rewards – a windfall of more than two billion dollars care of U.S. taxpayers –– went to Romney’s two top contributors.

    John Paulson of Paulson & Co and Paul Singer of Elliott International, known on Wall Street as “vulture” investors, have each written checks for one million dollars to Restore Our Future, the Super PAC supporting Romney’s candidacy.

    The two hedge fund operators turned a breathtaking three-thousand percent profit on a relatively negligible investment by using hardball tactics against the U.S. Treasury and their own employees.

    Gov. Romney last week asserted that the Obama Administration’s support for General Motors was a, “payoff for the auto workers union.” However, union workers in GM’s former auto parts division, Delphi, the unit taken over by Romney’s funders, did not fair so well. The speculators eliminated every single union job from the parts factories once manned by 25,200 UAW members.

    Under the control of the speculators, Delphi, which had 45 plants in the U.S. and Canada, is now reduced to just four factories with only 1,500 hourly workers, none of them UAW members, despite the union agreeing to cut contract wages by two thirds.

    It wasn’t supposed to be quite so bad. The Obama Administration and GM had arranged for a private equity investor to provide half a billion dollars in new capital for Delphi, but that would have cut the pay-out to Singer and Paulson. The speculators blocked the Obama-GM plan, taking the entire government bail-out hostage. Even the Wall Street Journal’s Dealmaker column was outraged, accusing Paul Singer of treating the auto company, “like a third world country.”

    But it worked. Singer and Paulson got what they demanded. Using U.S. Treasury funds:

    GM agreed to pay off $1.1 billion of Delphi’s debts,

    Forgave $2.15 billion owed GM by Delphi (which had been spun off as an independent company)

    Pumped $1.75 billion into Delphi operations, and

    Took over four money-losing plants that the speculators didn’t want.

    If those plants had been closed, GM factories would have shut down cold for lack of parts.

    Then there was the big one: The U.S. government agreed to take over $6.2 billion in pension benefits due Delphi workers under U.S. labor law.

    Governor Romney, while opposing the bail-out of GM, accused Obama of eliminating the pensions of 21,000 non-union employees at Delphi. In fact, it was Romney’s funders who wiped out 100% of the pensions and health care accounts of Delphi salaried retirees.

    Paulson and Singer paid an average of about 67 cents a share for Delphi. In November, 2011, Paulson sold a chunk of his holdings for $22 a share. Paulson’s gain totals a billion and a half dollars ($1,499,499,000), and Singer gained nearly a billion ($899,751,000) –– thirty-two times their investment.

    One-hundred percent of this gain for the Paulson and Singer hedge funds is accounted for by taxpayer bail-out support.

    But, unlike the government loans and worker concessions given to GM, the U.S. Treasury and workers get nothing in return from Delphi.

    From GM, the U.S. Treasury got warrants for common stock (similar to options) that have already produced billions in profit.

    And Delphi? It’s doing well for Paulson and Singer. GM and Chrysler, still in business by the grace of the U.S. Treasury, remain Delphi’s main customers, buying parts now made almost entirely in China and other cheap-labor nations.

    And exactly who are Paulson and Singer?

    Billionaire John Paulson became the first man in history to earn over $3 billion in a single year –– not for his hedge fund, but for himself, personally. At the core of this huge payday was a 2007 scheme by which, via Goldman Sachs, he sold “insurance” on subprime mortgage loans. According to a lawsuit filed by the Securities Exchange Commission, Goldman defrauded European banks by pretending that Paulson was investing in the insurance. In fact, Paulson was, secretly, the beneficiary of the insurance, reaping billions when the mortgage market collapsed.

    Goldman paid half a billion dollars in civil fines for the fraud. While the SEC states that Paulson knowingly participated in the scheme, he was not fined and denies he defrauded the banks.

    Multi-billionaire Singer is known as Wall Street’s toughest “vulture” speculator. Vulture fund financial attacks on the world’s poorest nations have been effectively outlawed in much of Europe and excoriated by human rights groups, conduct Britain’s former Prime Minister Gordon Brown described as, “morally outrageous.”

  16. Interested Bystander

    Tina,

    Although I would believe that it would depend at what age the person was adopted, like Obama, who was adopted when he was 5 by a step father, but a newborn I would contend would citizenship would be given just like the child was born to the parents.

    But Tina, you have a very “creative” mind, because how many candidates have we had that were adopted at birth?

    Just asking.

  17. Interested Bystander

    Good morning CW and all here at CitizenWElls.

    If I may,

    On the last thread it was suggested that Ron Paul isn’t “attacking” Romney like he has the other candidates, and even floated the opinion that this MAY be to allow Rand to run as Romney’s VP.

    Let me give MY opinion of this.

    IF Rand Paul runs as Romney’s VP, I STILL won’t vote for Romney, and I’ll believe that Rand is a SELLOUT.

    The ONLY reason the GOP would want Rand Paul to be on the ticket is to get him “turned around”. They want to NWO him and “Global economy” him and “military conplex” him and “establishment” him.

    I will be so disappointed in the Paul’s IF this is the situation.

    I don’t believe it, I don’t WANT to believe it, and unless I hear Paul say it, or see Rand on the ticket, I WON’T believe it.

    My WHOLE belief in Ron Paul is because he is “different”. He wants to get us back to the Constitution’s INTENT and not what it has morphed in too. Paul wants to STOP us from telling Israel how to run it’s Country, and wants to cut 5 Departments of whatever, AND he wants to cut one TRILLION out of the budget the first year in office.

    My belief is that IF Paul can get rid of the other Candidates, then it will be him against Romney, and it is my opinion that IF this were the case, Paul could “mop the floor” with Romney on ISSUES.

    Romney is such a slimey worm that he makes me sick.

    I don’t care WHO is the “second fiddle” to a Romney nomination, and I mean WHO, I will NEVER vote for Mitt Romney.

  18. Interested Bystander

    Hey All,

    Did Pat go in to hibernation?

  19. Interested Bystander

    Hey All,

    I just saw a report that tax checks could be delayed up to 21 days.

    I was kind of worried because I e-filed my taxes on Feb 4th, and have been doing so for about a decade, and I’ve always gotten my refund back within 2 weeks.

    This year when I went to “wheresmyrefund”, it stated that the information I submitted was incorrect, but this week it stated that my refund should be in my account this week.

    I was getting worried that I was on a “list” somewhere.

  20. Good morning IB, et al.

  21. jacqlynsmith | February 24, 2012 at 2:30 am |
    REVEALED Romney’s Top Funders Made Billions on Auto Bail-Out

    - Thanks to Mark

    by Greg Palast

    02/23/2012

    http://www.nationofchange.org/revealed…
    ———————————————————————————
    Check out who “Nation of Change” links up to….Mother Jones, Think Progress. I actually wasted my time reading this article that JS put up and it sounded like the future campaign rhetoric from Barack Obama against Mitt Romney. Now whether you support Mitt Romney is not the point, this article was a hit piece on Romney by Obots. Yet it winds up here on CW as news. This is the problem when you throw so much cr…p against the walll with zero contemplation…. I can’t imagine going through life in such a bewildered state that I had no capacity to contol the messages that I am trying to put out.

  22. Haven’t you guys figured out that Ron Paul supporters are “Blue Republicans”? They’re either demoncrats for real or used-to-be demoncrats without a home and have settled on Ron Paul!!

  23. Dear Jonah (and all that have discussed this):

    Please take it up with the HDOH, not me. I asked them for the seal Jonah says exists, they say they don’t have it.

    That is not my fault and I am not misinterpreting anything. I provided them the Factcheck.org photos. They reviewed them and say they don’t have that seal. Sorry. It’s nothing personal.

    They have two embossed seals…but they do not have the seal in the factcheck.org org photos. Again, take it up with them. That isn’t my fault. Are you suggesting they disclosed the seal and I have withheld it or something? Because that did not happen and I am withholding NOTHING.

    I invite you all to request the debossed seal yourselves. Send the HDOH the factcheck.org photos and ask them yourselves.

    (I mean it’s one thing to just dismiss what I say cause I said it. It’s another to just email your own request.

    Geez. You don’t have to take my word for it!)

  24. Pingback: 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 | Citizen WElls

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