Penny Pritzker: Tough businesswoman, wealthy heiress, philanthropist no stranger to controversy
BY SANDRA GUY Business Reporterfirstname.lastname@example.org
Barack Obama, Penny Pritzker | AP file photo
Penny Sue Pritzker is a Wonder Woman of sorts — an heiress, a successful serial entrepreneur, an Ironman athlete, an education-focused philanthropist and a tough businesswoman who throws herself into every detail of her work, her friends and longtime colleagues say.
Pritzker, who turned 54 on Thursday, also is a powerful networker who, for Barack Obama’s first White House bid, leveraged the Internet to raise the most money in presidential campaign history. Without her, insiders say, Obama would not have been elected president.
Forbes magazine ranks Pritzker as No. 277 among U.S. billionaires, with her wealth estimated at $1.85 billion. In Chicago, she and her husband, Dr. Bryan Traubert, live on property described as taking up five city lots in the Lincoln Park neighborhood.
Pritzker has an equally outsized reputation as a charitable giver, most notably to improve education and public school programs for children in poor neighborhoods.
Yet, labor leaders vilify the heiress to the Pritzker family’s Hyatt hotel fortune as heartless toward everyday workers. The Hyatt chain has engaged in a four-year contract battle with Unite Here, the union representing hotel maids, bellmen, bartenders, kitchen workers and room cleaners.
When Pritzker resigned with no explanation from the Chicago Board of Education in March, Chicago Teachers Union President Karen Lewis described her as “an anti-worker, anti-labor kind of boss . . . [who] worked to close schools.”
Supporters say Pritzker has expanded her education initiatives by helping the poor with job training. When Pritzker served as chair of Obama’s Economic Recovery Advisory Board, she reached out to union leaders in negotiations that led to Skills for America’s Future, a program to connect business and union leaders with community colleges to create job-training programs. Pritzker also led Chicago’s job-training initiative.
Austan Goolsbee, former chairman of Obama’s Council of Economic Advisors, said Pritzker was the perfect person to “get at the nexus of what business needed for training and matching it up with the education system.”
“Her personality type is kind of an ‘A-plus’ listener when it comes to policy,” he said.
Her appointment as commerce secretary, a move first reported by Sun-Times columnist Michael Sneed, would test her experiences in entrepreneurship, business leadership, politics and intellectual debate, particularly as Obama holds high hopes for a Trans-Pacific Partnership that would give America free trade with three-fifths of the world’s economy.
Former Commerce Secretary William Daley said successful commerce secretaries have deep political experience and independent relationships with the presidents they serve.
“She could be a big help to the president,” Daley said, noting Pritzker’s “enormous experience” in the business world, knowledge of the “political game” and attendance at world economic forums.
“She is a known quantity in many business capitals,” Daley said. “She is very professional, very low-key.”
Pritzker carries the skills she built during Obama’s first run, and she is powerful enough to overcome the idea that her nomination results from her political work, others say.
David Jacobson, U.S. ambassador to Canada who served as deputy national finance chairman in Obama’s first campaign when Pritzker was finance chairman, said she proved her political mettle when she successfully brought Hillary Clinton’s workers into the Obama organization.
“There were some hard feelings, some disappointment, but by the time the general election came, it was one team,” Jacobson said. “She took a group of mostly volunteers — people who raised money, all important people and some with big egos — and molded them into a team.”
Julianna Smoot, Obama’s 2012 deputy campaign manager and 2008 campaign finance director, who worked closely with Pritzker, said she isn’t seen as a political hack.
“She is a celebrity in her own right,” Smoot said, adding that potential donors wanted to meet her.
Pritzker’s decision to be Obama’s national finance chair in 2008 was “about as bold a move as I’ve seen anybody make” because Hillary Clinton was ahead in the polls and Obama was relatively unknown, said Jim Reynolds, chairman and CEO of Chicago investment bank Loop Capital Markets. Reynolds also worked on Obama’s first presidential campaign.
“The president was praying and hoping she would say yes because he didn’t know many ‘big’ people,” Reynolds said. “When she decided to take on that challenge, we were all surprised. It was an uphill battle.”
After Obama generated grass-roots enthusiasm in Iowa in 2008, Reynolds said Pritzker “galvanized, rallied and energized everyone on that finance committee.”
Pritzker took a less visible role in Obama’s re-election campaign after some say she took the slings and arrows for Obama’s positions perceived to be unfriendly toward Israel (Pritzker is Jewish) and businesses. The official explanation was that Pritzker, who served as national co-chair of Obama for America 2012 and was one of his top donation “bundlers,” was busy setting up three new companies and helping restructure the Pritzker family’s $15 billion fortune after a divisive family feud.
Though Pritzker is seen as a strong businesswoman, she is associated with a savings and loan scandal at Superior Bank. She served as chairman of the Hinsdale-based bank, half-owned by the Pritkzer family, from 1991 to 1994 and sat on the board of the bank’s holding company when Superior collapsed in early 2001 with half a billion dollars in subprime loan defaults and improper accounting that had overstated the thrift’s assets.
The Pritzkers agreed to pay the FDIC $100 million upfront and an additional $360 million over 15 years to help defray the regulator’s costs. The agreement received renewed criticism when a Pritzker-owned company got $31.5 million from the FDIC settlement with the bank’s accountant, Ernst & Young. The FDIC brought no charges against the bank’s owners, and the FDIC and uninsured depositors recovered 81 percent of their losses.
Pritzker fought for her role in the family businesses. As a teenager, she asked her grandfather, A.N. Pritzker, why he talked only with the boys in the family about business.
He replied that he was born in 1896 and “how am I supposed to know women are interested in business?” He taught her accounting basics, which she credited with cementing her desire to work in business. She earned an economics degree from Harvard University and MBA and law degrees from Stanford.
Pritzker and brothers J.B., 48, the Chicago tech startup investor, and Anthony, 52, were raised by their mother after their father, Hyatt hotels co-founder Donald N. Pritzker, died of a heart attack at age 39 in 1972. She was 13.
Penny considered her uncle Jay Pritkzer her mentor.
After graduate school, she started working in the Hyatt organization as a financial analyst.
In 1987, she wanted to branch out and founded Classic Residence by Hyatt, now called Vi. Pritzker exited as Vi’s chairman in 2011 after the Pritzker family sold nine of 19 high-end senior living communities for $481 million. In addition, she:
◆ Created Pritzker Realty Group in 1991 and grew it to a market capitalization of more than $5 billion in land development, including The Hyatt Center, and in industrial properties, retail shopping centers and other non-hotel assets.
◆ Co-founded the Parking Spot in 1998.
◆ Served as chairman of TransUnion from 2005 to 2012, engineering its sale for $3 billion.
◆ Co-founded in 2010, with CEO Deborah Harmon, Artemis Real Estate Partners, which manages two commercial real estate funds.
◆ Founded PSP Capital Partners in 2011 to invest in small businesses with high-growth prospects.
Pritzker now serves as chairman of Artemis Real Estate Partners; chairman and CEO of PSP Capital Partners, and as CEO of Pritzker Realty Group.
Her spokeswoman declined to say whether she would sell assets or set up trusts for her assets to avoid perceived conflicts of interest if she were to serve as commerce secretary. She would be required to leave her corporate jobs if she won Senate confirmation and took the secretary’s post.
Pritzker’s friends see her as well-rounded and ready for the challenge.
She “is a great mother, a great person to the core” and “a very complete person you would admire for her fortitude, her capabilities and what she has accomplished,” said Byron Trott, founder and CEO of Chicago merchant bank BDT Capital Partners, who has known Pritzker for 15 years. “She does not wear wealth on her sleeve.”
Goolsbee said Pritzker and her husband host families every weekend at modern-day “salons” at their summer home near Sawyer, Mich. There, they discuss weighty issues with artists, economists and a variety of intellectuals while treating guests to biking, kayaking, tennis, hiking and running.
“The place is almost magical,” Goolsbee said. “It is such an idyllic setting. She gathers really diverse people.”
Reynolds recalled how Pritzker let her son travel unescorted as a teenager on a basketball team with kids who slept three to a room during their road trips.
Reynolds’ son played on the team with Pritzker’s son.
“She went out of her way to make sure [her son] . . . experienced what all the other kids experienced — no limo, no bodyguards, no delivered food,” Reynolds said.
Pritkzer looked no different from any other parent at the games, he said, adding: “She had no airs, no pretenses.”