Obama’s favorite billionaire

May 13, 2013

As Barack Obama nominates Penny Pritzker for Commerce Secretary, Chicago's gain is everyone else's loss, writes Nick Burt in an article for the Occupied Chicago Tribune.

IN SURVEYING potential nominees for Secretary of Commerce--the Cabinet-level position whose main job is to be cheerleader-in-chief for American business--President Obama had a few options.

He could go through the ranks of the corporate world for one of the unapologetic capitalist elite. Or he could reward a campaign donor. Or he could reach back into the notorious grime of Chicago politics, where Obama had his earliest political support, and pick a home-towner.

In the end, Obama found all three. Her name is Penny Pritzker.

When those on the left talk of the ruling class, we usually mean more than one person. Yet Pritzker has an amazing knack for being personally connected to, if not involved in, a constellation of ugly bourgeois misdoings.

If she has avoided much public scrutiny prior to her nomination to be commerce secretary, she should be appreciative that Chicago is Rahm Emanuel's town now. The combative mayor has functioned as the central public face of an aggressive neoliberal project. In an Emanuel-less city, Pritzker would be an ideal villain among the local 1 percent--a kind of long-lost Koch sister in a red blazer and a blue state.

President Obama addresses a press conference with Commerce Secretary nominee Penny Pritzker
President Obama addresses a press conference with Commerce Secretary nominee Penny Pritzker

To call Pritzker the One Percenter's One Percenter wouldn't be a description of character, but a mathematical reality. Her estimated net wealth of $1.85 billion makes her not only one of the richest people in Illinois, but one of the wealthiest people on the globe (number 825 this year, according to Forbes magazine).

The Chicago Tribune, always reliable in its boosterism for the local elite, wasted no time in praising the nomination. "She should be confirmed," the Tribune's May 3 editorial announced. "Pritzker has the potential to be a transformative commerce secretary."

Echoing the complaints of what it calls "business leaders," the Tribune laments that "when Obama assembled his first Cabinet, he passed over the business community and picked a lawyer and politician, Washington Gov. Gary Locke, to be secretary of commerce." Pritzker, in contrast, "has the real-world executive experience and personal gravitas to be an outstanding representative for American business."

It's possible that the well-being of tens of thousands of Chicago schoolchildren would have benefitted from a similar concern with qualifications when Pritzker was put on the Chicago Public Schools (CPS) board in 2011.

Appointed by Emanuel, Pritzker and the other members of the unelected board have pushed for a radical remaking of the city's public school system. The plan relies on quasi-privatization through opening up new charter schools run by private interests, "turning around" a number of public schools by putting them at the command of charter operators, and closing or consolidating others. And all while attacking the Chicago Teachers Union, either directly--as in the case of last fall's contract negotiations and strike--or through replacing the public school workforce with nonunion teachers.

The work being well underway, Pritzker resigned her seat in March in anticipation of the offer of the commerce job.


EVEN MORE laudatory than the Tribune was Obama himself. Flanked by Pritzker and his choice for U.S. trade representative, Michael Froman, at the nomination announcement, the president singled out Pritzker's experience building her own businesses from the ground up.

One might think that such praise should come accompanied with evidence that Pritzker knows how to use a mortar trowel. Among the many terms that could be applied to Pritzker, "self-made" seems the least likely.

For a century, the Pritzker family has been among Chicago's business aristocracy, owning and profiting from an array of ventures, ranging from banks to cruise lines. Ten of the family's members are on the Forbes 400 list.

Like many in her family--Chicago has a Pritzker Park, a Pritzker Pavilion, a Pritzker Military Library, a Pritzker College Prep high school, a Pritzker Laboratory and a Pritzker School of Medicine, among others--Penny Pritzker likes to name things after herself. And so the pattern has followed with her own businesses, including PSP Capital Partners and the Pritzker Realty Group.

A truly stunning article from Bloomberg.com in 2008 describes how the Pritzker family fortune was amassed and maintained: tax evasion, offshore trust funds, taking perhaps too generously from the company profits, dubious business deals, and a foray into subprime lending.

According to Bloomberg, Pritzker's first business deal was a real estate swap engineered to reduce Hyatt's tax obligations. The company approved, and Pritzker earned herself a role in the family business.

In only the deepest of 1 Percent delusions would a head start such as Pritzker's qualify as beginning "from the ground."

"The Pritzkers are crooks,'' one depositor who lost money in the collapse of a Pritzker-run bank told Bloomberg. "They don't care anything about people who spent their whole lives trying to save."

Obama appears to draw a different conclusion: "Penny understands that just as great companies strengthen the community around them, strong communities and skilled workers also help companies thrive."

Indeed she does, as she's spared little in the way of exploiting either community or workers.

As Pritzker and the school board claimed an alleged budget shortfall, laid the blame on the Chicago Teachers Union and rolled out plans to shutter up to 120 public schools (they eventually settled on a list of 54), the city approved a $5.2 million public subsidy for the construction of a Hyatt hotel in the affluent Hyde Park neighborhood.

The subsidy comes from the city of Chicago's controversial Tax Increment Financing (TIF) program--essentially loans the city makes to itself by diverting property taxes to a slush fund the city controls to fund development projects. In theory, the funds are to be recouped once the TIF expires, but critics generally regard the scheme as a handout to developers at the expense of public projects to which the taxes would otherwise go. Public schools are one.


PRITZKER'S CONCEPT of economic justice extends to other areas of her work as well. The family, including Penny, have collected Hyatt's profits from winning "labor disputes" against a largely female and immigrant workforce.

UNITE HERE has led a longstanding boycott of the Hyatt hotel chain, which it calls "the worst hotel employer in America." The campaign has centered in Hyatt's extensive use of subcontracting, which has allowed it to cut costs, but offload responsibility for the consequences. Workers describe speed-ups and wage theft, and Hyatt has a housekeeper injury rate higher than the industry average.

San Francisco's BeyondChron.org offers one example:

On August 31, 2009, all housekeepers at Hyatt's three Boston area hotels were fired. They were told to clean out their lockers and leave. Some had worked for the hotels for more than 20 years.

But they weren't laid off because the Hyatt's didn't need housekeeping. Rather, Hyatt brought in a subcontractor that would pay the replacement housekeepers only $8 an hour.

To stem public criticism, Hyatt then offered the housekeepers jobs with a temp agency. The workers refused, insisting they should get their real jobs back. They also didn't want to be used as temps to replace other workers, the precise scenario that befell them.

Tensions between housekeepers and Hyatt reached a nearly literal boil in the summer of 2011, when management at the Park Hyatt Chicago turned on the hotel's outdoor heat lamps against striking workers. (Hyatt later issued a statement saying the action was not in line with their record of "respecting our associates' rights and caring about their well-being.")

All of which would be excruciating enough, but to her list of titles, Pritzker also adds "philanthropist."

Since 2000, she and her husband, opthamologist Brian Traubert, have co-chaired the Pritzker-Traubert Family Foundation, which has annually distributed hundreds of thousands of dollars to charter and turnaround outfits, such as the Academy for Urban School Leadership (AUSL) and the Noble Street Charter Network. This year alone, AUSL is counting on the foundation for more than a quarter-million dollars.

Like many in the urban business class, Pritzker's political allegiances have been primarily to the Democratic Party. In 2008, her most prestigious role was Obama's campaign fundraising chair. In 2012, she was national co-chair of Obama's re-election campaign. She has also served as one of his campaign "bundlers"--well-connected individuals who tap their networks for large contributions--collecting more than half a million dollars for his runs in 2008 and 2012.

Now, the president gets to return the favor.

As Rick Perlstein of the Nation observed: "For those who've been waiting for Barack Obama, unfettered from the constraints of re-election, to emerge from his chrysalis and take wing as the true liberal they have always known he was, well, here we are."

In one respect, the Tribune is correct: Obama has found the voice of American business. And that's exactly the problem.

A version of this article first appeared at the the Occupied Chicago Tribune.

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