Penny Pritzker steps into limelight as Commerce nominee(Read article summary)
Penny Pritzker is first member of the wealthy family to accept a federal post. President Obama has nominated Penny Pritzker as Commerce secretary.
Businesswoman, overachiever, and someone who can say no to people in power, Penny Pritzker is stepping out of the shadows of her famous family name and her wealthier relatives to forge her own persona on the national stage.
For years the Pritzker family, founders of the Hyatt hotel chain, has operated on the fringes of public politics. Family members have stamped their names on buildings, supported philanthropies, even raised money for political candidates, but avoided the national spotlight.
With President Obama’s nomination of Ms. Pritzker as secretary of Commerce, that will change.
In Ms. Pritzker, the president is getting a savvy businesswoman who makes overachieving look almost routine. (She earned a law degree and MBA in the same year and, famously, finished her first Ironman triathalon despite spraining an ankle in the first mile of the marathon portion of the race). He will also get someone who is not afraid to speak her mind to her boss and can bring a big business perspective to an administration that, at times, has skewered big corporations for misdeeds and greed.
“Penny is one of our country’s most distinguished business leaders,” Mr. Obama said Thursday in announcing her nomination at the White House. “She’s built companies from the ground up. She knows from experience that no government program alone can take the place of a great entrepreneur. “
But Obama will also get an heiress (she reportedly dislikes the term) whose family has had run-ins with the Internal Revenue Service over taxes and with unions for playing hardball with hotel workers. Those problems are likely to surface in confirmation hearings in Congress.
For Pritzker herself, the move up to the national stage is the next step in a career of taking on tough problems. It started, arguably, as a teenager when she wrote her grandfather, family patriarch A.N. Pritzker, who began building the family’s fortune with successful investments in real estate and small companies. "Dear Grandpa, I would like to know why you only talk to the boys about business,” she wrote. “For your birthday, I want you to understand that young women are interested in knowing what you know, too."
That convinced her grandfather to give her a series of accounting lessons that cemented her interest in business, she said in a 2009 speech. She majored in economics at Harvard, earned her MBA and J.D. at Stanford, and started as a financial analyst in the family business in 1985. Her business acumen impressed her uncle, who put her in charge of all the land holdings outside of the Hyatt hotels themselves, which she expanded into a major business. She began launching other businesses, and served as chairman of at least two: the Marmon Group (a controlling interest was eventually sold to Warren Buffett) and Superior Bank (a subprime lender in Chicago that failed in 2001, seven years after Pritzker had stepped down as chairman).
Pritzker lent her support to Obama’s US Senate campaign in 2004 and chaired the national fundraising campaign for his 2008 presidential campaign, raising a record-breaking $745 million. But she declined when Obama considered appointing her Commerce secretary for his first term, citing family obligations. In 2011, Mayor Rahm Emanuel appointed her to the Chicago School Board.
"I put her on the school board because ... she's not scared to tell me, 'No,' " Emanuel told the Chicago Tribune in an interview. "Now if I tell her I want her to do something, I need her to do something, more likely than not she will do it. But she will tell me, if she disagrees with me, 100 reasons why she doesn't think it's right, and then she'll do it. That is what you want. 'Yes' people are a dime a dozen. Getting someone ... willing to be in the room for the tough calls and execute is very rare. That's Penny Pritzker."
As she steps onto the national stage, she is certain to come in for criticism – and more from Democrats than Republicans. Hyatt’s harsh labor practices have so angered United Here, a national union representing hotel workers, that it has started a global boycott of the hotel chain, entitled “Hyatt Hurts.” The union has convinced several Democratic groups to avoid holding events at Hyatt.
After Obama nominated Pritzker for the Commerce position, Unite Here released a statement: “It is common for Cabinet Secretaries to step down from their positions at publicly traded companies. If Ms. Pritzker decides to step down from Hyatt’s Board of Directors, this will create the first ever vacancy on Hyatt’s Board.” The union called on the Hyatt board to appoint a hotel worker to fill the vacancy.
Criticism is also likely from the Chicago Teachers Union. “Penny Pritzker has a long and storied history as being an anti-labor, anti-worker kind of boss,” the union’s president, Karen Lewis, said in a statement in March, when Pritzker quit the school board, possibly in preparation for the Commerce job. “She has supported policies that have had an adverse impact on working-class families and their children. 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.”
At her confirmation hearing, Republicans and Democrats may want to delve into the failure of Superior Bank, where Pritzker was pushing an expansion into subprime lending even after she had moved from the chairman’s position to board member member, according to the Chicago Sun-Times. They may also want to ask about Pritzker family efforts to shelter much of their wealth from taxation, including offshore bank accounts.
But a family agreement has divided up the Pritzker fortune, allowing family members to set up their own finances. Pritzker has used her money to form her own investment company, PSP Capital Partners, and co-found a real estate investment firm, Artemis Real Estate Partners. So also moved out of the Hyatt Center.
Also, Pritzker’s name has been floated for months to replace acting Commerce Secretary Rebecca Blank. Receiving little negative response and with a presumably thorough vetting, Thursday’s announcement suggests the Obama administration is confident that she will be approved.