The billionaire business tycoon Penny Pritzker appears headed for confirmation as commerce secretary. Pritzkers family started the Hyatt Hotel chain, and she is a close friend of President Obama. In 2008, she served as the national finance chair of his presidential campaign.
If confirmed, Penny Pritzker, with a net worth of over $1.5 billion, would be by far the wealthiest member of the current Cabinet and one of the wealthiest Cabinet secretaries in history. Bloomberg News reported Pritzker recently inadvertently understated a portion of her income by at least $80 million in a form required for her nomination. Last year, she received over $53 million in consulting fees from her familys offshore trust in the Bahamas.
As an heir of the Hyatt Hotel chain and former head of the Chicago Board of Education, Pritzker has also come under scrutiny for her clashes with labor unions. According to the AFL-CIO, the Hyatt has exhibited a broad pattern of labor abuses, including aggressive outsourcing, low wages and the mistreatment of housekeepers. Both the hotel workers union UNITE HERE and the Chicago Teachers Union have opposed Pritzkers nomination. Chicago Teachers Union President Karen Lewis said, quote, “As a member of the board of education, she has worked to close schools, destabilize neighborhoods and disrupt the economic lives of thousands of public school employees.”
David Moberg talking:
one of the things has to do with that anti-labor record. And its a record not simply of attacking labor unions, although there are two prominent examples. One is this battle with UNITE HERE, where Hyatt has refused to reach an agreement with the hotel union thats based on the pattern that other major hotel chains have already adopted, and it has pursued a pattern of subcontracting of work and a general harsh treatment of its workforce at the hotels. In terms of another prominent labor clash, thePenny Pritzker was one of the prime instigators of passage of a law in the state of Illinois that took away many of the rights from the Chicago Teachers Union and provoked a long strike here in Chicago. So, first of all, theres been this specific kind of anti-labor record, but more broadly, theres been a pattern of policies the Pritzkers have promoted that work to the disadvantage of working-class people in Chicago and around the country.
And thethere is also a history of conflict of interests that the Pritzkers have shown in terms of the ways they have used their public ties to advance their own private interests. For example, in terms of Superior Bank, which is one of the other important things to know about the Pritzker record, they got, as a family, financial aid from the federal government to take over the failed savings and loan. And when they ran it into the ground and left many of the depositors high and dry, they managed to set up an arrangement with the Federal Deposit Insurance Corporation that permitted them to actually make money off of the failure of the bank, and all of this at a time that wasthe bank wasleading to these lawsuits for many of the depositors.
I think that there are at least two reasons why this nomination was particularly disappointing from Obama, even thought its quite understandable, given the close ties that Obama and Penny Pritzker have had. One of those troubling issues is economic. Were still coming out of one of the worst recessions in history of the country, and that recession was triggered by a housing bubble based on subprime lending and securitization of those subprime loans that then collapsed as the economy began to slow down. And Penny Pritzkers and the Pritzker family activities through Superior Bank really established the subprime lending industry and set the stage for this eventual collapse of the economy. Overall, the business practice record of the Pritzkers is simply not what the president of any party, but especially the Democratic Party, should be advancing as a model.
And the second concern beyond this kind of economic issue, broadly speaking, thats hurt the vast majority of working people in this country, there is a political issue. And as a lot of people have noted for a number of years, that the Democratic Party, that once claimed to be the party of working people, has drifted more and more to try to compete with the Republican Party to be the party of the rich. And the kind of ties that are reflected in the links of Obama to Pritzker and through Pritzker beyond to many of the other financial titans in the Democratic Party, that all represents a kind of drift of the party itself and of American politics away from any kind of representation of workers interests.
Obama had already attempted to nominate Penny Pritzkerhe did nominate her in his first term, but she ultimately had to pull out. the nomination was withdrawn for fear of the bad publicity that might come out concerning all these different activities of the Pritzkers. The family itself, including Penny Pritzker, have long relied on a variety of schemes of avoiding paying taxes, which itself is hardly the kind of model that one would hope for from a commerce secretary. And much of that has been done through offshore accounts and shelters of money. A lot of accounts depict Penny Pritzker as if she were simply kind of an unwitting beneficiary of things done by other people or, in some cases, an unwitting victim of things done by other people, so that the offshore accounts are often described as having been set up before she reached adulthood. Well, shes been an adult quite a long while, and there was no need for her to continue to shelter income in these tax havens overseas. So, I think that the administration was worried about how this would look. But increasingly, it doesnt seem to care that much. And given the kind of kid gloves treatment from both most of the Republicans and Democrats on the committee, there seems to be good reason for them not to worry about any bad publicity this time around.
Pritzker is a longtime member of the board of directors of the Hyatt Hotel chain and heir to the Hyatt fortune. Some Hyatt housekeepers say they clean as many as 30 rooms a day, getting paid as little as $2 per room. Workers at the Hyatt Andaz hotel in West Hollywood, California, have filed a complaint with the National Labor Relations Board over an electronic tracking system used to monitor their productivity.
– source democracynow.org
David Moberg, senior editor of In These Times magazine. His recent article is called “3 Troubling Things To Know About Billionaire Penny Pritzker.”