Barack Obama announces his nomination of Penny Pritzker as Secretary of Commerce. (AP Photo/Carolyn Kaster.)
This story originally appeared at Truthdig. Robert Scheer is the author of The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street (Nation Books).
The love fest between Barack Obama and his top fundraiser Penny Pritzker that has led to her being nominated as Commerce secretary would not be so unseemly if they both just confessed that they did it for the money. Her money, not his, financed his rise to the White House from less promising days back in Chicago.
“Without Penny Pritzker, it is unlikely that Barack Obama ever would have been elected to the United States Senate or the presidency,” according to a gushing New York Times report last year that read like the soaring jacket copy of a steamy romance novel. “When she first backed him during his 2004 Senate run, she was No. 152 on the Forbes list of the wealthiest Americans. He was a long-shot candidate who needed her support and imprimatur. Mr. Obama and Ms. Pritzker grew close, sometimes spending weekends with their families at her summer home.”
But don’t sell the lady short; she wasn’t swept along on some kind of celebrity joyride. Pritzker, the billionaire heir to part of the Hyatt Hotels fortune, has long been first off an avaricious capitalist, and if she backed Obama, it wasn’t for his looks. Never one to rest on the laurels of her immense inherited wealth, Pritzker has always wanted more. That’s what drove her to run Superior Bank into the subprime housing swamp that drowned the institution’s homeowners and depositors alike before she emerged richer than before.
Pritzker and her family had acquired the savings and loan with the help of $600 million in tax credits. She became the new bank’s chairwoman and ended up as a director of the holding company that owned it. Under her leadership, Superior specialized in subprime lending, hustling folks with meager means and poor credit into high interest loans that were bundled into the toxic securities that wrecked the US economy.
As federal regulators began to move in on her bank after it had dangerously inflated the value of its toxic assets, Pritzker assured its employees: “Our commitment to subprime has never been stronger.” Two months later, the bank was pronounced insolvent. At the time, the Federal Deposit Insurance Corp.’s inspector general report concluded, “The failure of Superior Bank was directly attributable to the board of directors and executive management ignoring sound risk diversification principles, as evidenced by excessive concentration in residual assets related to subprime lending. …”