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Obama’s Pritzker Nomination Under Fire From All Directions

- May 23, 2013

Today, Obama Nominee For Secretary Of Commerce Penny Pritzker Will Undergo Her Confirmation Hearing In The Senate. (U.S. Senate Committee On Commerce, Science, & Transportation, Accessed 5/23/12)

Pritzker Has Used Offshore Accounts To Avoid Paying U.S. Taxes – A Strategy Previously Criticized By Obama

Despite Obama’s Previous Castigation Of Utilizing Offshore Accounts To Avoid Taxes, His Nomination Of Pritzker Is The Second Such Nominee With Offshore Accounts Of Her Own. “The nomination of Chicago billionaire Penny Pritzker marks the second time this year that Obama has put forth a cabinet nominee with offshore accounts -- months after he castigated Romney, the Republican presidential candidate, for utilizing them. In a financial disclosure released last week, Pritzker said she received $53.6 million in income last year from a trust in the Bahamas.” (Laura Litvan, “Pritzker Yields Party Role Reversal On Offshore Trusts,” Bloomberg, 5/20/13)

The Pritzkers Used Havens In The Bahamas And The Caymans To Avoid Paying Taxes On Their International Properties. “The Pritzker family of Chicago is using a chain of offshore companies in the Caribbean to invest in one of the Hyatt hotel group's international properties, a financial structure that allows the billionaire family to avoid paying some U.S. taxes. Court documents filed in the Cayman Islands detail the use of three companies in the Bahamas and the Caymans to hold the stock of the Park Hyatt hotel in remote Baku, Azerbaijan. People familiar with the situation acknowledge that the arrangement has potential tax benefits for the Pritzker interests.” (Glenn R. Simpson, “Court Papers Show Pritzker Family Uses Offshore Haven To Hold Hyatt,” The Wall Street Journal, 5/13/02)

“Pritzker Also Received A Total Of $32.2 Million In Consulting Fees Last Year From 272 Other Family Trusts, According To The Disclosure Form, Which Doesn’t Identify Whether The Trusts Are U.S.- Or Foreign-Based.” (Brian Wingfield and Mike Dorning, “Obama’s Commerce Pick Got $54 Million From Bahamas Trust,” Bloomberg, 5/16/13)

FLASHBACK: Obama Used Gov. Mitt Romney’s Investments In The Cayman Islands As The Content For An Attack Ad. (Obama For America, Television Ad, “Firms,” 7/14/12)

  • FLASHBACK: In 2009, Obama Criticized The Legality Of Tax Havens In The Tax Code, Saying “That Makes It Perfectly Legal For Companies To Avoid Paying Their Fair Share.” OBAMA: “And yet, even as most American citizens and businesses meet these responsibilities, there are others who are shirking theirs. And many are aided and abetted by a broken tax system, written by well-connected lobbyists on behalf of well-heeled interests and individuals.  It's a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share.  It's a tax code that makes it all too easy for a number -- a small number of individuals and companies to abuse overseas tax havens to avoid paying any taxes at all.  And it's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.” (President Barack Obama, Remarks By The President On International Tax Policy Reform, Washington, D.C., 5/4/09)

Pritzker Co-Owned A Bank That “Turned Out To Be A Preview Of The Financial Crisis That Came Later In The Decade”

Pritzker “Did Pioneering Work With The Kind Of Mortgage-Backed Securitization That Would Eventually Spread And Help Spark The Worst Recession Since The Great Depression.” “A 61-page report carrying the seal of the Treasury’s inspector general offers a tutorial for Republican senators interested in challenging Penny Pritzker’s commerce secretary nomination. The document chronicles the 2001 failure of a suburban Chicago bank after Pritzker and her family expanded subprime lending there and did pioneering work with the kind of mortgage-backed securitization that would eventually spread and help spark the worst recession since the Great Depression.” (John McCormick, “Subprime Mess Left By Pritzker Is Seen As Opening For Opponents,” Bloomberg Businessweek, 5/21/13)

“When It Closed, Superior Was One Of The Nation’s Largest Bank Failures In A Decade.” “When it closed, Superior was one of the nation’s largest bank failures in a decade. It remains the biggest business-record blemish for a woman who has developed a skyscraper, started a luxury senior housing enterprise and been chairwoman for a credit reporting company.” (John McCormick, “Subprime Mess Left By Pritzker Is Seen As Opening For Opponents,” Bloomberg Businessweek, 5/21/13)

“Superior’s Collapse Turned Out To Be A Preview Of The Financial Crisis That Came Later In The Decade.” “Subprime loans typically are given to people with the weakest credit, charging higher interest to cover the bigger risk of default, and Superior’s collapse turned out to be a preview of the financial crisis that came later in the decade.” (John McCormick, “Subprime Mess Left By Pritzker Is Seen As Opening For Opponents,” Bloomberg Businessweek, 5/21/13)

Pritzker Was Forced To Revise Her Financial Disclosures After Understating Her Income By $80 Million

“On The Eve Of Her Senate Confirmation Hearing, Commerce-Secretary Nominee Penny Pritzker Alerted Congress That She Mistakenly Understated Her 2012 Income By At Least $80 Million.” “On the eve of her Senate confirmation hearing, commerce-secretary nominee Penny Pritzker alerted Congress that she mistakenly understated her 2012 income by at least $80 million. The admission came in new financial disclosure documents that Ms. Pritzker filed with the Senate on Tuesday. The newly disclosed payment came from U.S. accounts and was tied to Ms. Pritzker's work over the past decade carrying out a complex plan to divide her family's assets—work that included restructuring, managing and selling various trusts, said her assistant, Susan Anderson.” .(Josh Mitchell, “Penny Pritzker Understated Income By $80 Million,” The Wall Street Journal, 5/22/13)

Even Traditional Obama Allies Are Concerned About Pritzker’s Nomination

“More Than 500 Hyatt Workers Staged A Rally At The Hyatt McCormick Place Monday To Declare Their Disapproval Of Pritzker’s Nomination.” “More than 500 Hyatt workers staged a rally at the Hyatt McCormick Place Monday to declare their disapproval of Pritzker’s nomination. The protesters say the Pritzker family’s business model has lead Hyatt to single itself out as the nation’s worst hotel employer.” (John McCormick, “Subprime Mess Left By Pritzker Is Seen As Opening For Opponents,” Bloomberg Businessweek, 5/21/13)

Obama’s Nomination Of Pritzker Drew Fire From Unite Here Local 1, “Which Represents More Than 1,500 Hyatt Workers In Chicago.” “President Barack Obama nominated Pritzker, a board member for Hyatt Hotels Corp., to the post earlier this month, drawing criticism from Unite Here Local 1, which represents more than 1,500 Hyatt workers in Chicago.” (John McCormick, “Subprime Mess Left By Pritzker Is Seen As Opening For Opponents,” Bloomberg Businessweek, 5/21/13)

Carly Karmel, Spokeswoman For Unite Here Local 1, Said “Hyatt Has Led The Hotel Industry In A Race To The Bottom.” “Contract negotiations that started in 2009 between Hyatt Hotels management and Unite Here Local 1 are at a stalemate, according to Carly Karmel, spokesperson for the union. Karmel said negotiations with Hyatt Hotels are at a standstill because the union refuses to back down on two main issues: contracting language that would protect workers from having their job subcontracted to non-union members and workplace protections, specifically for housekeepers, to prevent injuries on the job. Meanwhile, workers are being forced to contend with a wage freeze during the negotiations, she added. ‘Under Ms. Pritzker’s leadership, Hyatt has led the industry in subcontracting and housekeepers are getting seriously injured,’ said Karmel. ‘Hyatt has led the hotel industry in a race to the bottom.’” (John McCormick, “Subprime Mess Left By Pritzker Is Seen As Opening For Opponents,” Bloomberg Businessweek, 5/21/13)

“Karmel Said Unite Here Local 1 Is Sending Workers To Washington D.C. This Thursday To Protest During The Confirmation Hearings.” (John McCormick, “Subprime Mess Left By Pritzker Is Seen As Opening For Opponents,” Bloomberg Businessweek, 5/21/13)

AFL-CIO President Richard Trumka “Is No Fan Of The Pritzker Pick.” “That's bad. But Pritzker supporters are hoping the much bigger and vastly influential national AFL-CIO steers clear of staking out an opinion on the nomination: The AFL-CIO has joined UNITE's Hyatt boycott, and national president Richard Trumka has walked the picket line -- but he's stayed aloof from the Pritzker to-do at the urging of the Obama administration and Hill Democrats. A well-connected labor official close to the situation says that Trumka is no fan of the Pritzker pick, but he's far more concerned with getting the foundering Thomas Perez nomination through at the Department of Labor, an iffy proposition at best.” (Glenn Thrush, “Union Opposes Pritzker; Trumka Mum,” Politico 44, 5/20/13)


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