Pritzker’s Billions

Hyatt heiress faces tough questions during Commerce confirmation hearing

Penny Pritzker / AP
May 23, 2013

The billionaire heiress and major campaign donor tapped by President Barack Obama to head the Department of Commerce faced tough questions from Republicans about a failed bank owned by her family at her confirmation hearing on Thursday.

Penny Pritzker, whose father founded the Hyatt Hotel chain, was on the receiving end of strong queries from Republicans on the Senate Committee on Commerce, Science, and Transportation.

Ranking Committee Republican Sen. John Thune (R., S.D.) grilled Pritzker over her tenure as board chairman of Superior Bank. The bank, which her family purchased in 1989, failed in 2001 under the weight of subprime loans. Some bank members lost their life savings, according to Thune.

"What do you have to say to the depositors who lost great sums of money?" Thune asked.

Pritzker acknowledged the bank's failure, but denied that she played an active role.

"I was never an officer of the bank or a manager," she said. "My family voluntarily agreed to pay $453 million (to the FDIC) ... it was the right thing to do both for depositors and for my family."

Pritzker attempted to distance herself from her billionaire reputation during the hearing. She highlighted her great grandfather's immigration to the U.S. from Russia in the 19th Century.

"He came here dirt poor," she said.

She also emphasized that her inheritance had little to do with her career as a businesswoman. She said that she encouraged her family members to fire her if she couldn't "get the job done" when she started her career and emphasized that she had started five companies on her own.

"Through hard work we survived and grew and the company remains successful and employs thousands of people," she said.

The crowd at the confirmation hearing was dotted with grim-faced men and women wearing red UNITE HERE t-shirts.

UNITE HERE, a union representing hotel workers, has waged a campaign against Hyatt for many years, alleging abusive working conditions. The 270,000-member union announced Monday it would publicly oppose Pritzker's nomination and protested in front of the landmark Chicago Hyatt.

UNITE HERE has become increasingly critical of the administration. Not only has it opposed Pritzker's nomination, its leadership has criticized the implementation of Obamacare because it could cost union members their health benefits.

The union has been a vital political ally of Obama and Democrats in recent years. It has been a strong proponent of immigration reform, as well as a major fundraiser, spending more than $7 million in the 2012 cycle.

Pritzker helped launch Obama’s political career in Illinois by contributing to his Senate campaign. She also bundled more than $1.3 million for the president in 2008 and 2012, contributed $250,000 to his 2013 inauguration, and served on his Jobs Council.

UNITE HERE members are aware of her close ties to the administration but remained steadfast in their opposition.

Pritzker defended her approach to labor organizations when Sen. Maria Cantwell (D., Wash.) asked about the AFL-CIO's boycott of Hyatt.

"There's no success in business without a good relationship between management and labor," Pritzker said. "I support the right for workers to organize if that's what they want to do."

"Very entertaining," a man wearing a UNITE HERE shirt said when asked how he thought the hearing went. "We're going to be here no matter what. That's what justice is about."