Nomination pulls back curtain on Pritzker fortune
BY LYNN SWEET Washington Bureau Chief Twitter: @lynnsweet May 15, 2013 8:20PM
President Barack Obama looks to longtime fundraiser and philanthropist Penny Pritzker, right, in the Rose Garden of the White House in Washington, Thursday, May 2, 2013, where he announced that he will nominate Pritzker to run the Commerce Department an
Updated: June 18, 2013 7:56AM
WASHINGTON — The portfolio of Chicago billionaire Penny Pritzker, the Commerce secretary nominee, reflects vast holdings in hotels, casinos, parking lots, student and elderly housing, a stake in the show “Singin’ in the Rain,” and last year, $53.6 million from a family trust in the Bahamas.
Pritzker filed a required 184-page disclosure document with the U.S. Office of Governmental Ethics on Wednesday, along with other papers outlining how she will avoid conflicts of interest if confirmed for the post.
She may also have to disclose even more information for the Senate Committee on Commerce, Science and Transportation — which has its own questionnaire — in advance of her May 23 confirmation hearing, which could turn into a grilling, given her vast assets.
◆ If confirmed, Pritzker will step down from the Hyatt Hotels Corp. board, the hotel chain founded and controlled by her family, one of the wealthiest in the nation. However, she will be able to retain her Hyatt stock because Commerce ethics advisers “determined that it is not necessary at this time for me to divest my interests” because she would recuse herself if matters arise creating a conflict of interest with Hyatt.
◆ Pritzker will be divesting herself of 221 other holdings within 90 days of her confirmation. The assets and other details about the holdings — many are trusts — did not have to be disclosed.
◆ Pritzker will resign from 158 other organizations, a mix of corporate, trusts, non-profits and charitiable posts, including positions at Hyatt, Pritzker Reality, Harvard and Stanford (her schools), the Aspen Institute’s Skills for America’s Future, the Council on Foreign Relations, the Economic Club of Chicago and the Pritzker Traubert Foundaion.
◆ Off-shore trusts are politically sensitive, especially since the Democrats beat up Mitt Romney over them in the presidential campaign. The $53.6 million was payment for Pritzker’s services over 10 years related to the restructuring of the trusts in the Bahamas, according to a source close to the Pritzker family.
The restructure was the result of a settlement of what had been a family dispute, pitting different generations of the Pritzker family against each other.
According to the source, those trusts were created when Pritzker was a young girl, and Pritzker “does not control these trusts and has not received and has no legal right to require any distributions from these trusts.”
The restructure was completed last November, with assets untangled and separated by immediate family. The source said Pritzker requested that the trustee for what is now her trust start the legal process leading to the installation of a U.S. trustee.
“She has made this request because it would permit all the trusts for the benefit of her and her immediate family to be more effectively managed and efficiently administered. She has no control over this legal process, its timing or outcome,” according to the source.
“The only income Penny has received from these trusts is for the services she performed over the last 10 years to restructure the Pritzker family trusts’ holdings.”
◆ Pritzker through investments or trusts has stakes in the Grand Victoria Casino in Elgin; an airplane leasing company and branded tomatoes. She stepped down from the Chicago Board of Education last March; another holding was in a company investing in teacher software to be used in public school systems.
◆ Values for homes do not have to be disclosed. She has a loan of between $25 million and $50 million — only ranges have to be revealed — for a Colorado residence.
◆ Pritzker disclosed a revolving line of credit for three credit cards: between $250,000 and $300,000 for American Express, and between $15,000 and $50,000 for cards with Chase and Neiman Marcus.