Sweet: ‘Clerical error’ missed $80 million in Pritzker income
BY LYNN SWEET Twitter: @lynnsweet May 22, 2013 8:22PM
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 24, 2013 2:03PM
WASHINGTON — Billionaire Commerce Secretary nominee Penny Pritzker “inadvertently omitted” more than $80 million in income from the financial disclosures she filed last week, though the revelation is not expected to be a critical factor in her Thursday confirmation hearing before the Senate Commerce panel.
Pritzker’s lawyer, Robert Rizzi, said in a May 21 letter to a Commerce Department attorney that the income was not in the original May 15 filings with the U.S. Office of Government Ethics “because of a clerical error and through no fault of Ms. Pritzker.”
According to Pritzker personal spokesman Susan Anderson, the mistake was “discovered by financial advisers” to Pritzker, the Chicago business tycoon and philanthropist who is a close personal friend and major fund-raiser for President Barack Obama.
Those advisers helped prepare the 184-pages of original disclosures detailing the vast, complex holdings of one of the richest women in the nation, who is a member of one of the wealthiest families in the United States.
Pritzker has been huddling with top Obama team advisers to prepare and strategize for her confirmation; she spent the last week making courtesy calls with many senators on the Commerce, Science and Transportation Committee.
The panel is chaired by Sen. Jay Rockefeller (D-W.Va.), like Pritzker an heir to a famous fortune. He is descendant of oil baron John D. Rockefeller and ranked by Roll Call as the fourth richest member of Congress with $86.6 million in assets.
Pritzker made more than that in income alone last year.
On top of the $80 million coming from consulting for more than 400 domestic trusts, she hauled in $53.6 million from the family CIBC trust in the Bahamas — established by her grandfather when she was a kid. Add to that $1.25 million in salary from the Pritzker Reality Group, and a million plus more in salaries from other holdings.
The $80 million and $53.6 million in income flowed to Pritzker for her work over a 10-year period of restructuring the Pritzker financial holdings — the result of a settlement of an intergenerational Pritzker family feud. Pritzker presided over the breaking up of the inter-mingled family holdings along 11 family lines.
According to Anderson, among the domestic investments at issue were the Marmon Corp., Hyatt Hotels, Union Tank Car, Conwood Company and the Hyatt Center office building in Chicago. “Pritzker provided advice on the restructuring, managing and in some cases, selling various trust assets,” she said.
While two other Obama cabinet nominees are facing confirmation battles — Thomas Perez for Labor secretary and Gina McCarthy for Environmental Protection Agency administrator — Republicans are not looking to pick a major fight or block the pro-business Pritzker.
Pritzker’s biggest hurdle toward confirmation will be Republicans grilling her on the major stain on her record, the 2001 failure of Superior Bank, a Hinsdale Savings and Loan, and tax avoidance strategies employed by her trusts and business empire.
The Pritzker family founded Hyatt Hotels, and have been at odds with UNITE HERE Local 1, the hotel workers union for years. Pritzker is on the board — she will step down if confirmed — and the union, after at first giving Pritzker a pass, in recent days has started a campaign to oppose her; an ad in Politico called her appointment “The President’s mistake.”
Union workers are expected to attend her hearing, where she will be introduced by Illinois Sens. Dick Durbin, a Democrat and Mark Kirk, a Republican; she has the backing of both.
Rockefeller said through a spokesman he “fully expects her to be voted out of committee and receive full Senate confirmation.”