Reuters: Politics: Commerce nominee faces questions on failed bank, tax havens

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Commerce nominee faces questions on failed bank, tax havens May 23rd 2013, 16:04 U.S. President Barack Obama announces Penny Pritzker (R) as his new nominee for the U.S. Secretary of Commerce while in the Rose Garden at the White House in Washington May 2, 2013. Credit: Reuters/Larry Downing WASHINGTON | Thu May 23, 2013 12:04pm EDT WASHINGTON (Reuters) - President Barack Obama's choice to lead the Department of Commerce faced questions on Thursday about her role in the failure of a Illinois bank in the early 2000s and her billionaire family's use of offshore tax havens to shelter income. Senator John Thune, the top Republican on the Senate Commerce Committee, said he wanted to fully explore the two issues before the panel acts on Penny Pritzker's nomination. "I have been in communication with her on these matters, and would appreciate her continuing to work with us after the hearing to answer all of the questions I and other members of the committee may have, before we report her nomination," Thune said at Pritzker's confirmation hearing. Pritzker, the 271st richest American according to Forbes magazine, was Obama's national finance chairman in 2008 and his campaign co-chair in 2012. Her personal fortune is worth an estimated $1.85 billion dollars, putting her at the pinnacle of the top 1 percent of American households. A 184-page financial disclosure form released by the White House showed she received $54 million in consulting fees from the Canadian Imperial Bank of Commerce Trust Co, which manages an offshore trust for the Pritzker family in the Bahamas. The Stanford University-trained lawyer and businesswoman is currently on the board of the Hyatt Hotels Corp, which her uncle Jay Pritzker founded in 1957 two years before she was born. She plans to leave that position if confirmed. In her prepared testimony, Pritzker highlighted the entrepreneurial success of her family, which she said began when her great-grandfather "came to the U.S. from Czarist Russia, dirt poor, at the age of 10. He taught himself English, worked several jobs, earned his law degree at night, and opened a law practice at the age of 30." She told the panel that after her father died when she was 13 she asked her grandfather to be trained in the family business. About 30 members of the Unite Here hotel workers' union attended the hearing to show their disapproval of the nomination. The union has called Hyatt "the worst hotel employer in America" because of the its treatment of workers, failure to reach a new labor contract and opposition to allowing workers at additional Hyatt hotels into the union. "Today, we send a message to President Barack Obama that Penny Pritzker is not a good choice. She doesn't see people like human beings. (She sees people) like slaves," said Wanda Rosario, one of 100 housekeepers fired by Hyatt in Boston in 2009 as a cost-cutting move. "It was my dream to retire from Hyatt, but they broke it," she said. Pritzker served on Obama's fundraising committee during his successful 2004 run for the Senate and was national finance chairman for his 2008 presidential campaign, which raised nearly $750 million, breaking the record. During the 2008 presidential campaign, Republicans attempted to tar Pritzker with the failure of Superior Bank, which in the 1990s was a pioneer in subprime mortgages that a decade later were blamed for the global financial crisis. Regulators closed the bank in July 2001 after auditors concluded that income from the mortgage securizations had been overstated. Five months later, the Pritzkers agreed to pay the FDIC $460 million over 15 years as part of a deal where the family and the other half-owner admitted no liability. (Reporting by Doug Palmer; editing by Jackie Frank) Link this Share this Digg this Email Reprints

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