Penny Pritzker
Encyclopedia
Penny Sue Pritzker is an American business executive, and a member of the Pritzker family
of Chicago, one of America's wealthiest business families. She is the founder and current Chair of Classic Residence by Hyatt
, or Vi, a chain of luxury senior living communities spread throughout the United States
, and the national finance chair of Barack Obama's presidential campaign
.
In 2011 the Forbes 400
list of "America's wealthiest" showed her as the 263rd richest person in the U.S., estimated net worth of US $1.7 billion. Also in 2011 Forbes listed her as the world's 651st richest person.
On November 20, 2008, CNN
reported that Pritzker was Barack Obama
's top choice for Commerce Secretary
, quoting "multiple" unnamed sources. However, it was later reported that because of her involvement in the failure of subprime lender Superior Bank, Pritzker took herself out of the running.
, a notable and influential Jewish American
business family. Pritzker is a daughter of Sue (Sandel) and Donald N. Pritzker (1932–1972), co-founder of the Hyatt
hotel chain, which grew dramatically under his leadership as President from 1959 until his death in 1972. She attended Castilleja School
until 1977. She earned a BA
in Economics
from Harvard College
(1981), and a JD/MBA from Stanford University
(1984).
.
s since the 2000 election cycle. Among the recipients have been the presidential campaigns and exploratory committees, including those of George W. Bush
, Joe Lieberman
, Bill Bradley
, Rudy Giuliani
, John McCain
(2000), Al Gore
, John Kerry
and Hillary Clinton.
Since the spring of 2008, Pritzker has served as Barack Obama's National Finance Chair. On Wednesday July 2, 2008, Ms. Pritzker and her husband hosted a $28,500 per plate fundraiser for Mr. Obama's campaign in Chicago with Warren Buffett
and his wife, and Obama advisor Valerie Jarrett
.
She is also a member of the Council on Foreign Relations
and President Barack Obama
's Economic Recovery Advisory Board
.
. Ms. Pritzker's late uncle, Jay Pritzker
, purchased a 50% stake in Hinsdale, Illinois
-based Superior Bank of Chicago
in 1989 from the Federal Deposit Insurance Corporation
, which had taken over the bank when it failed in the late 1980s. Penny Pritzker became chairman of the bank in 1991. Under Ms. Pritzker's chairmanship, the bank "embarked on a business strategy of significant growth into subprime home mortgages," according to a 2002 report by the United States Treasury Department. She stepped down from the chairmanship in 1994 but continued to serve on the board of the holding company, Coast to Coast. In the months leading up to the 2001 seizure, she tried to work out a major recapitalization plan to "once again restore Superior's leadership position in subprime lending." In July 2001, FDIC seized the bank after the recapitalization could not be resolved. . Subsequently, the Pritzker family reached an agreement with regulators to pay $460 million over 15 years toward the costs of the closure; these funds will go towards reducing the costs of the FDIC's losses and partially reimburse depositors with accounts in excess of FDIC insurance limits
.
More than a thousand Superior Bank depositors are still owed money, and industry experts have criticized Pritzker's handling of the situation. Consumer advocates as well as government investigators have asserted Superior "engaged in unsound financial activities and predatory lending practices." Responding to questions from the Wall Street Journal, Ms. Pritzker noted she had no ownership in the bank, either direct or indirect, and that the bank's reasons for failure "were complex. They include changes in accounting practices, auditing failures, reversals in regulatory positions and general economic conditions." She said the bank complied with "fair lending laws" and ethical business practices. Writing about the largest thrift
failure in almost a decade, the FDIC in 2002 noted that the bank had paid out $200 million in dividends during a time of seemingly rising profits; in reality, these profits were a product of "flawed" accounting and masked operating losses. Pritzker noted in turn that Superior's financial statements were found to be acceptable by regulators for many years before the failure. A 2001 Business Week article described the bank's other half-owner, Alvin Dworman, as the more dominant partner in its operation as a result of agreements Jay Pritzker made early on. Quoted in the New York Times about the failure of the bank, a Pritzker family friend observed Pritzker was trapped in a deal of her uncle's making: "Penny got sucked into this … This was really the legacy of Jay." Yet Jay Pritzker passed away in 1999 and the bank got in trouble and was shut down in 2001, and Penny Pritzker endorsed the bank's subprime lending practices and badly mishandled the bank's finances as evidenced in a letter written by her just months before the bank's collapse. In it she wrote she intended to "once again restore Superior's leadership position in subprime lending.".
; the most members of any family. Under the settlement, Liesel and Matthew each received roughly U.S. $280 million in cash and were given more control over other trusts valued at about U.S. $170 million each.
Pritzker family
The Pritzker family is one of America's wealthiest families, and has been near the top of Forbes magazine's "America's Richest Families" list since the magazine began in 1982....
of Chicago, one of America's wealthiest business families. She is the founder and current Chair of Classic Residence by Hyatt
Classic Residence by Hyatt
Vi is a national developer, owner and manager of high-end retirement communities across the United States. It is a privately held corporation founded in 1987 by its Chairman, Penny Pritzker. As of May 2011, the company housed over 6,000 residents and employed 3,936 workers...
, or Vi, a chain of luxury senior living communities spread throughout the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, and the national finance chair of Barack Obama's presidential campaign
Barack Obama presidential campaign, 2008
Barack Obama, then junior United States Senator from Illinois, announced his candidacy for the presidency of the United States in Springfield, Illinois, on February 10, 2007. On August 27, 2008, he was declared nominee of the Democratic Party for the 2008 presidential election...
.
In 2011 the Forbes 400
Forbes 400
The Forbes 400 or 400 Richest Americans is a list published by Forbes Magazine magazine of the wealthiest 400 Americans, ranked by net worth. The list is published annually in September, and 2010 marks the 29th issue. The 400 was started by Malcom Forbes in 1982 and treats those in the list like...
list of "America's wealthiest" showed her as the 263rd richest person in the U.S., estimated net worth of US $1.7 billion. Also in 2011 Forbes listed her as the world's 651st richest person.
On November 20, 2008, CNN
CNN
Cable News Network is a U.S. cable news channel founded in 1980 by Ted Turner. Upon its launch, CNN was the first channel to provide 24-hour television news coverage, and the first all-news television channel in the United States...
reported that Pritzker was Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
's top choice for Commerce Secretary
United States Secretary of Commerce
The United States Secretary of Commerce is the head of the United States Department of Commerce concerned with business and industry; the Department states its mission to be "to foster, promote, and develop the foreign and domestic commerce"...
, quoting "multiple" unnamed sources. However, it was later reported that because of her involvement in the failure of subprime lender Superior Bank, Pritzker took herself out of the running.
Biography
Born in 1959, Pritzker is a member of the Pritzker familyPritzker family
The Pritzker family is one of America's wealthiest families, and has been near the top of Forbes magazine's "America's Richest Families" list since the magazine began in 1982....
, a notable and influential Jewish American
American Jews
American Jews, also known as Jewish Americans, are American citizens of the Jewish faith or Jewish ethnicity. The Jewish community in the United States is composed predominantly of Ashkenazi Jews who emigrated from Central and Eastern Europe, and their U.S.-born descendants...
business family. Pritzker is a daughter of Sue (Sandel) and Donald N. Pritzker (1932–1972), co-founder of the Hyatt
Hyatt
Hyatt Hotels Corporation , is an international operator of hotels.Hyatt Center is the headquarters for Hyatt corporation...
hotel chain, which grew dramatically under his leadership as President from 1959 until his death in 1972. She attended Castilleja School
Castilleja School
Castilleja School is an independent school for 415 girls in grades six through twelve, located in Palo Alto, California. Castilleja is the only non-sectarian all-girls middle and high school in the San Francisco Bay Area...
until 1977. She earned a BA
Bachelor of Arts
A Bachelor of Arts , from the Latin artium baccalaureus, is a bachelor's degree awarded for an undergraduate course or program in either the liberal arts, the sciences, or both...
in Economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
from Harvard College
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
(1981), and a JD/MBA from Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
(1984).
Career highlights
- 1998 – co-founded The Parking Spot, the fastest growing company in off-site airport parking management, with CEO Martin Nesbitt. She continues as chair.
Philanthropic activities
Pritzker is involved in the reform of Chicago’s public education system. Currently she is chair of the Chicago Public Education Fund, the successor organization to the Chicago Annenberg ChallengeChicago Annenberg Challenge
The Chicago Annenberg Challenge was a Chicago public school reform project from 1995 to 2001 that worked with half of Chicago's public schools and was funded by a $49.2 million, 2-to-1 matching challenge grant over five years from the Annenberg Foundation. The grant was contingent on being matched...
.
Political involvements
Pritzker contributed some $493,174 to numerous campaigns and political action committeePolitical action committee
In the United States, a political action committee, or PAC, is the name commonly given to a private group, regardless of size, organized to elect political candidates or to advance the outcome of a political issue or legislation. Legally, what constitutes a "PAC" for purposes of regulation is a...
s since the 2000 election cycle. Among the recipients have been the presidential campaigns and exploratory committees, including those of George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
, Joe Lieberman
Joe Lieberman
Joseph Isadore "Joe" Lieberman is the senior United States Senator from Connecticut. A former member of the Democratic Party, he was the party's nominee for Vice President in the 2000 election. Currently an independent, he remains closely affiliated with the party.Born in Stamford, Connecticut,...
, Bill Bradley
Bill Bradley
William Warren "Bill" Bradley is an American hall of fame basketball player, Rhodes scholar, and former three-term Democratic U.S. Senator from New Jersey. He ran unsuccessfully for the Democratic Party's nomination for President in the 2000 election.Bradley was born and raised in a suburb of St....
, Rudy Giuliani
Rudy Giuliani
Rudolph William Louis "Rudy" Giuliani KBE is an American lawyer, businessman, and politician from New York. He served as Mayor of New York City from 1994 to 2001....
, John McCain
John McCain
John Sidney McCain III is the senior United States Senator from Arizona. He was the Republican nominee for president in the 2008 United States election....
(2000), Al Gore
Al Gore
Albert Arnold "Al" Gore, Jr. served as the 45th Vice President of the United States , under President Bill Clinton. He was the Democratic Party's nominee for President in the 2000 U.S. presidential election....
, John Kerry
John Kerry
John Forbes Kerry is the senior United States Senator from Massachusetts, the 10th most senior U.S. Senator and chairman of the Senate Foreign Relations Committee. He was the presidential nominee of the Democratic Party in the 2004 presidential election, but lost to former President George W...
and Hillary Clinton.
Since the spring of 2008, Pritzker has served as Barack Obama's National Finance Chair. On Wednesday July 2, 2008, Ms. Pritzker and her husband hosted a $28,500 per plate fundraiser for Mr. Obama's campaign in Chicago with Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
and his wife, and Obama advisor Valerie Jarrett
Valerie Jarrett
Valerie Bowman Jarrett is a senior advisor and assistant to the president for Public Engagement and Intergovernmental Affairs for the Obama administration. She is a Chicago lawyer, businesswoman, and civic leader...
.
She is also a member of the Council on Foreign Relations
Council on Foreign Relations
The Council on Foreign Relations is an American nonprofit nonpartisan membership organization, publisher, and think tank specializing in U.S. foreign policy and international affairs...
and President Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
's Economic Recovery Advisory Board
President's Economic Recovery Advisory Board
The President’s Council on Jobs and Competitiveness, originally the President's Economic Recovery Advisory Board, is a panel of non-governmental experts from business, labor, academia and elsewhere that President of the United States Barack Obama created on February 6, 2009. The board reports...
.
Superior Bank involvement
Ms. Pritzker has been associated with the Subprime mortgage crisisSubprime mortgage crisis
The U.S. subprime mortgage crisis was one of the first indicators of the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages....
. Ms. Pritzker's late uncle, Jay Pritzker
Jay Pritzker
Jay Arthur Pritzker was an American entrepreneur and conglomerate organizer.-Biography:Pritzker was born in Chicago, Illinois, the son of Fanny and A. N. Pritzker. His brother was Robert Pritzker...
, purchased a 50% stake in Hinsdale, Illinois
Hinsdale, Illinois
Hinsdale is a suburb of Chicago, Illinois; it is located partly in Cook County and mainly in DuPage County in the U.S. state of Illinois. The population was 17,349 at the 2000 census. The town's ZIP code is 60521. The town has a rolling, wooded topography, with a quaint downtown and is a 30-minute...
-based Superior Bank of Chicago
Superior Bank of Chicago
The Superior Bank FSB was a Hinsdale, Illinois-based Savings and loan association that collapsed in July 2001 with some $2.3b in assets.-Synopsis:...
in 1989 from the Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
, which had taken over the bank when it failed in the late 1980s. Penny Pritzker became chairman of the bank in 1991. Under Ms. Pritzker's chairmanship, the bank "embarked on a business strategy of significant growth into subprime home mortgages," according to a 2002 report by the United States Treasury Department. She stepped down from the chairmanship in 1994 but continued to serve on the board of the holding company, Coast to Coast. In the months leading up to the 2001 seizure, she tried to work out a major recapitalization plan to "once again restore Superior's leadership position in subprime lending." In July 2001, FDIC seized the bank after the recapitalization could not be resolved. . Subsequently, the Pritzker family reached an agreement with regulators to pay $460 million over 15 years toward the costs of the closure; these funds will go towards reducing the costs of the FDIC's losses and partially reimburse depositors with accounts in excess of FDIC insurance limits
Deposit insurance
Explicit deposit insurance is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due...
.
More than a thousand Superior Bank depositors are still owed money, and industry experts have criticized Pritzker's handling of the situation. Consumer advocates as well as government investigators have asserted Superior "engaged in unsound financial activities and predatory lending practices." Responding to questions from the Wall Street Journal, Ms. Pritzker noted she had no ownership in the bank, either direct or indirect, and that the bank's reasons for failure "were complex. They include changes in accounting practices, auditing failures, reversals in regulatory positions and general economic conditions." She said the bank complied with "fair lending laws" and ethical business practices. Writing about the largest thrift
Savings and loan association
A savings and loan association , also known as a thrift, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans...
failure in almost a decade, the FDIC in 2002 noted that the bank had paid out $200 million in dividends during a time of seemingly rising profits; in reality, these profits were a product of "flawed" accounting and masked operating losses. Pritzker noted in turn that Superior's financial statements were found to be acceptable by regulators for many years before the failure. A 2001 Business Week article described the bank's other half-owner, Alvin Dworman, as the more dominant partner in its operation as a result of agreements Jay Pritzker made early on. Quoted in the New York Times about the failure of the bank, a Pritzker family friend observed Pritzker was trapped in a deal of her uncle's making: "Penny got sucked into this … This was really the legacy of Jay." Yet Jay Pritzker passed away in 1999 and the bank got in trouble and was shut down in 2001, and Penny Pritzker endorsed the bank's subprime lending practices and badly mishandled the bank's finances as evidenced in a letter written by her just months before the bank's collapse. In it she wrote she intended to "once again restore Superior's leadership position in subprime lending.".
Breakup of Pritzker Empire
Accused of looting family trusts, Ms. Pritzker and cousins Tom and Nick were sued by cousin Liesel Pritzker and Matthew Pritzker who claimed fraud and sought damages in excess of $6 billion. In early 2005, the parties settled the lawsuit which led to the family fortune being split 11 ways, resulting in 10 more Pritzkers joining the Forbes 400Forbes 400
The Forbes 400 or 400 Richest Americans is a list published by Forbes Magazine magazine of the wealthiest 400 Americans, ranked by net worth. The list is published annually in September, and 2010 marks the 29th issue. The 400 was started by Malcom Forbes in 1982 and treats those in the list like...
; the most members of any family. Under the settlement, Liesel and Matthew each received roughly U.S. $280 million in cash and were given more control over other trusts valued at about U.S. $170 million each.
See also
- Federal Deposit Insurance CorporationFederal Deposit Insurance CorporationThe Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
- List of JD/MBAs
- Office of Thrift SupervisionOffice of Thrift SupervisionThe Office of Thrift Supervision was a United States federal agency under the Department of the Treasury that charters, supervises, and regulates all federally- and state-chartered savings banks and savings and loans associations. It was created in 1989 as a renamed version of another federal agency...
External links
- Shattered Dynasty, Vanity Fair (magazine)Vanity Fair (magazine)Vanity Fair is a magazine of pop culture, fashion, and current affairs published by Condé Nast. The present Vanity Fair has been published since 1983 and there have been editions for four European countries as well as the U.S. edition. This revived the title which had ceased publication in 1935...
- Money Maven
- Penny Pritzker at NNDBNNDBThe Notable Names Database , produced by Soylent Communications, the same entity that produces Rotten, Daily Rotten, Dr. Sputnik's Society Pages and Penny Postcards, is an online database of biographical details of over 36,000 people of note...
- 2002 article on Superior Bank failure, In These TimesIn These TimesIn These Times is a politically progressive monthly magazine of news and opinion published by the Institute for Public Affairs in Chicago...
- The Forbes 400 - #135 Penny Pritzker 2007 profile
- The Harvard Crimson - Penny Pritzker Madeline W. Lissner, June 5, 2006
- SEC filings
- Personal website