Media for the 99%

Pritzker Cashes Out

As Obama nominates billionaire heiress Penny Pritzker for Secretary of Commerce, Chicago’s gain is everyone’s loss, says Nick Burt.

“Thanks for the 5 million in TIF money,” says Penny Pritzker on a protest sign during the CTU strike of Fall 2012. (Photo: Sarah-Jane Rhee)

“Thanks for the 5 million in TIF money,” says Penny Pritzker on a protest sign during the CTU strike of Fall 2012. (Photo: Sarah-Jane Rhee)

In surveying potential nominees for Secretary of Commerce, President Obama had a few options. In one scenario, he could cull the ranks of mainstream corporate industry 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 and pick a hometowner.

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

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

If Pritzker had avoided much public scrutiny prior to her nomination to be commerce secretary, she should be appreciative that Chicago is Rahm Emanuel’s town. The combative mayor has functioned as the central public figure amid an aggressive neoliberal project.

In an Emanuel-less city, Pritzker would be an ideal villain among the local 1%, a kind of long-lost Koch sister in a red blazer and a blue state.

To call Pritzker a 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 (#825, according to Forbes).

“An outstanding representative for American business”

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

But, echoing the complaints of what it calls “business leaders,” the Tribune laments, “[W]hen 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 the well-being of tens of thousands of Chicago schoolchildren would have benefited from a similar concern with qualifications when Pritzker came up for the school board in 2011.

Appointed by mayor Rahm 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 a quasi-privatization through charterizing and turning around existing city schools, closing or consolidating others, and 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 nation’s top commerce job.

Even more laudatory than the Tribune was Obama himself. Flanked by Pritzker and his other nominee, Michael Froman, in front of the White House last Thursday, the president singled out Pritzker’s experience building up her own businesses from the ground.

One may think such praise should come accompanied with evidence that Pritzker knows how to use a mortar trowel. If nothing else, among the terms that could be applied to Pritzker, ‘self-made’ seems the least likely.

How the Pritzkers Made Their Money

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 in 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 is followed with her own businesses, including PSP Capital Partners and the Pritzker Realty Group.

A truly stunning 2008 piece in Bloomberg News 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 her role in the family business.

In only the deepest of 1% delusion 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 worker.

Hyatt’s Own Philanthropist

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 54), the city approved a $5.2 million public subsidy on 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 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 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/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 did 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 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. Both have also been beneficiaries of local school reform.

Like many in the urban business class, Pritzker’s political allegiances have been primarily to the Democratic Party.

Her most prestigious role was as the president’s 2008 campaign fundraising chair. She also served as one of his campaign “bundlers,” well-connected individuals who tap their networks for large contributions, and collected 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 observes, “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 business. And that’s exactly the problem.

Nick Burt is an Occupied Chicago Tribune editor and contributor.

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