Pritzker denies role in offshore tax accounts
May 23rd, 2013
10:42 AM ET
10 years ago

Pritzker denies role in offshore tax accounts

Washington (CNN) - Commerce Secretary nominee Penny Pritzker denied any role Thursday in the creation or control of offshore tax accounts used to help manage her family's vast fortune - a politically sensitive issue for President Barack Obama in the wake of last year's election.

Democrats repeatedly criticized GOP presidential nominee Mitt Romney in 2012 for stashing some his wealth outside of the United States.

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Pritzker, testifying before the Senate Commerce Committee in her confirmation hearing, conceded that she is the "beneficiary of offshore family trusts" established when she was a "little girl."

But "I didn't create them. I don't direct them. I don't control them," she told the members of the committee. And "I have complied with all of the disclosure obligations ... required of me in this [confirmation] process."

Pritzker noted that she has asked for the appointment of an American trustee to oversee the accounts.

With a net worth estimated at $1.85 billion by Forbes Magazine, Pritzker, a business executive and heiress to the family that founded the Hyatt hotel chain, is poised to become one of the wealthiest Cabinet members in U.S. history.

Pritzker was not asked about an amendment she made to her financial disclosure reform earlier this week after initially underreporting her income by nearly $80 million.

Her attorney, who filed the amendment with the Office of Government Ethics, blamed the omission on a "clerical error."

South Dakota Sen. John Thune, the panel's top Republican, asked Pritzker about her involvement with Chicago-based Superior Bank, which went belly up in 2001. The bank was widely considered a pioneer in subprime mortgages and the securitization of those investments, years before the recent housing-driven financial crisis.

Pritzker said she had stepped down from the bank's board seven years before its failure, but became involved again after problems arose "to try and salvage the situation."

"Unfortunately ... negotiations failed and the bank failed," she said.

Pritzker claimed she voluntarily went to the head of the Federal Deposit Insurance Corporation and offered to "make this situation right" for depositors. Her family ultimately paid $450 million.

"It was the right thing for us to do, because both for the depositors and for us as a family," she told the committee.

"The lessons that I've learned [from the collapse of Superior Bank] are really about good management, good governance structure, the importance of diversification in risk management, transparency, and having a solid governance," she said.

Pritzker, a key fundraiser for both of President Obama's two White House campaigns, was considered a front-runner for Commerce secretary following the 2008 election until questions were raised about her finances.

As a leading figure in the Hyatt hotel empire, Pritzker has found her nomination bitterly opposed by many of the chain's union employees who question the company's business practices.

A group of Hyatt workers were joined by the labor organization, Unite Here, at the Commerce Committee hearing.

"I am here to just to let everybody know the abuse the workers are under at the Hyatt. I wanted to let everybody know the kind of situation Penny Pritzker puts her employees in," said Leslie Newson, a housekeeper at Hyatt Regency Chicago who made the trip to Pritzker's hearing.

Pritzker's nomination is not seen as being in any danger.

Republicans respect "her business acumen," a congressional source told CNN.

Filed under: President Obama • White House
soundoff (22 Responses)
  1. Data Driven

    I don't like this nominee. Anti-union. Admitting $80 million is a "clerical error" - and given her vast wealth, it IS.

    Perhaps there IS hypocrisy from Obama on this nominee, but the bigger hypocrisy is that her nomination will sail through unimpeded, thanks to congressional Republicans. Guys, this is one nominee you SHOULD pause on. Whatever.

    May 23, 2013 10:49 am at 10:49 am |
  2. Jeff

    President Obama favorite saying should be, "Do as I say, not as I do".

    May 23, 2013 10:52 am at 10:52 am |
  3. Al-NY,NY

    expect a fillibuster, posturing, and political theater of the highest degree by those that don't care about anything but making Obama look bad

    May 23, 2013 10:53 am at 10:53 am |
  4. Sniffit

    "There's a certain level of hypocrisy," said the congressional source who spoke on the condition of anonymity."

    Yeah, the janitor. Yawn.

    May 23, 2013 10:55 am at 10:55 am |
  5. Dutch/Bad Newz, VA -aka- Take Back The House -aka- No Redemption Votes

    I think she's going to have a hard time getting the nod. I don't think she's going to be confirmed.

    May 23, 2013 10:57 am at 10:57 am |
  6. much thunder..little rain

    if you think there is any real difference between repubicans and democrats you cant .....its all about power and money

    May 23, 2013 11:05 am at 11:05 am |
  7. Ray E. (Georgia)

    Aw Humm,
    Do you know how to make a Billion Dollars? You start with 2 Billion. Subprime Loans? Wasn't that a "Gift" from Barney Frank and Chris Dodd? Not sure it is hypricital to stash your money off shore where the theves will have a harder time stealing it. And remember! The rich need to pay their "Fair Share", no? Just another bump in the road.

    May 23, 2013 11:07 am at 11:07 am |
  8. anonymous

    Absolutely use Obama's attack lines against his nominees to show the deceptive hypocrisy of this horrendous president. Do not let him off the hook and give him a free ride. He asked for it.

    May 23, 2013 11:10 am at 11:10 am |
  9. Lynda/Minnesota

    "There's a certain level of hypocrisy," said the congressional source who spoke on the condition of anonymity."

    Yeah. As is there also a certain level of hypocrisy speaking on condition of anonymity.

    "Barring an unforeseen bombshell at her hearing, Pritzker's nomination is by no means in any danger. Republicans respect "her business acumen," a congressional source said."

    Good grief, CNN can't STILL be upset Romney lost the election (especially after giving us his most heartfelt rendition of America the Beautiful).

    May 23, 2013 11:15 am at 11:15 am |
  10. Dominican mama 4 Obama

    Pritzker is not running for President.
    She is Romney rich, or maybe I should say that Romney is Pritzker rich. Whatever. Where do you think these people put their money? Under their mattress?
    She's filthy wealthy, I don't personally like what I know of her, but....we'll ALL get over it and the sun will come out tomorrow.

    May 23, 2013 11:18 am at 11:18 am |
  11. just sayin

    oh come on people! everybody knows obama's billionaire supporters are clean as the driven snow and always pay the maximum amount of taxes and never, ever take deductions or try to minimize their taxes. it is only other billionaires that support obama's opponents that are evil and money grubby 1%ers.

    May 23, 2013 11:20 am at 11:20 am |
  12. lottie

    you would think the repos would love her. After all she is only doing what mittens has done. Yawn. They will as usual make a stink.

    May 23, 2013 11:23 am at 11:23 am |
  13. Fair is Fair

    She's got so much money she makes Romney look blue collar.

    May 23, 2013 11:30 am at 11:30 am |
  14. Sandy

    How come the press hardly EVER points out hypocrisy of republicans, which happens daily?!

    May 23, 2013 11:38 am at 11:38 am |
  15. Lynda/Minnesota

    Dominican mama: "She's filthy wealthy"

    Indeed she is. I know very little about her myself so I may have to google the woman just to see if she's been strutting around in blue jeans and oxford shirts pretending to be one of the little people. Something tells me she hasn't. Something also tells me she will be drilled for her wealth ... including showing tax returns and all the little details Mr. Mittens was unwilling to share as a potential President of the United States.

    May 23, 2013 11:42 am at 11:42 am |
  16. Marvil

    How many "key fundraisers" has Obama appointed? Can you say payback?

    May 23, 2013 11:44 am at 11:44 am |
  17. Al-NY,NY


    Dominican mama: "She's filthy wealthy"

    ... including showing tax returns and all the little details Mr. Mittens was unwilling to share as a potential President of the United States.

    you mean something like "We've given you people all we need to so you're not getting any more returns?"

    May 23, 2013 11:46 am at 11:46 am |
  18. Wake up People!

    Ah Lynda but they are still upset and each and every article tells the story......

    May 23, 2013 11:56 am at 11:56 am |
  19. Bill from GA

    This "Double Standard" thing should work both ways: If mitt romney was good enough for all these repubs with his offshore accounts, then why would offshore accounts eliminate Penny Pritzker from qualification?

    Sounds like repubs are the ones guilty of hypocrisy.

    If there is no absolute reason to disqualify her, give her the job. It's the President's right to choose anyone who is qualified for the job.

    May 23, 2013 12:01 pm at 12:01 pm |
  20. ghostriter

    Exactly. What about the republican hypocrisy of wanting to see her tax records?

    I'm starting to think CNN is really trying to be more conservative. I guess by Xeroxing conservative talking points. Talk about dumbing things down.

    May 23, 2013 12:04 pm at 12:04 pm |
  21. Lynda/Minnesota

    @Al-NY and Wake Up People

    Yes. Absolutely to both of your comments!

    May 23, 2013 12:16 pm at 12:16 pm |
  22. Wake up People!

    You'll never see that here Bill from GA.... I think they are making sure they don't seem to biased when the GOP, whom is so desperate, pulls a repeat of 2000, and steals the WH again. Wouldn't want to alienate the group in power right......

    May 23, 2013 12:24 pm at 12:24 pm |