Obama was an inconsequential lawmaker in the Illinois Senate when his future pick to be U.S. secretary of Commerce introduced him to titans of the finance industry and raised three-quarters of a billion dollars toward his presidential election, investigative reporter Greg Palast tells us.
As Truthdig wrote this week, Pritzker is worth more than $1.8 billion and has held leadership positions in the Hyatt Hotels Corp. and the now-defunct Chicago-based Superior Bank. Her vast fortune affords her “a heavy magic wand in the world of politics,” Palast writes, an instrument that “would have been heavier ... except that in 2001, the federal government fined her and her family $460 million for the predatory, deceitful, racist tactics and practices of Superior.”
At the time of its collapse, Superior was the costliest bank failure ever and “the first of the deregulated go-go-banks to go bust.” Taxpayers lost nearly half a billion dollars. Depositors lost millions and many poor residents of state Sen. Obama’s South Side of Chicago lost their homes.
“Penny did not like paying $460 million. No, not one bit,” Palast writes. “What she needed was someone to give her Hope and Change. She hoped someone would change the banking regulators and the Commerce Department so she could get away with this crap.
“Pritzker introduced Obama, the neophyte state senator, to the Ladies Who Lunch (that’s really what they call themselves) on Chicago’s Gold Coast. Obama got lunch, gold and better—an introduction to Robert Rubin. Rubin is a former Secretary of the Treasury, former chairman of Goldman Sachs and former co-chairman of Citibank. Even atheists recognized Rubin as the Supreme Deity of Wall Street.”
In return for Rubin’s help raising campaign money from the major banks, Obama agreed to appoint Larry Summers and Timothy Geithner to the highest economic appointments in his Cabinet, Palast notes. All three of these men had played an executive role in creating the deregulated banking industry that brought the U.S. economy to its knees in 2008.
But high-level positions for Summers and Geithner were not the only returns Obama was supposed to make for Rubin and Pritzker’s help raising campaign money, Palast writes. Pritzker was supposed to be made secretary of Commerce at the start of Obama’s first term. But “in November 2008, just as Obama was about to submit her nomination to Congress, a bunch of Pritzker’s victims marched on Washington. They were not from her busted bank, but unhappy workers from the lucrative nursing homes that her family owns through a string of complex offshore trusts.” The president didn’t want to risk tarnishing the false progressive image that millions of his liberal voters had bought. For the moment, the deal with this “infamously combative anti-union apostle” was off. “Obama slammed the door on Penny pronto.”
“Obama appeared to keep the door shut on Pritzker throughout the 2012 campaign,” Palast reports, “reducing her to hosting an election fundraiser at her Gold Coast digs, which she had to bill as a Goldman Sachs PAC event. This marks possibly the first time and last time anyone used Goldman Sachs as a PR cover.
“But today, with the unions’ money and votes already pocketed and counted, Obama can give working folks The Finger and give Penny her pound of flesh: the Commerce post.”
—Posted by Alexander Reed Kelly.
President Obama gives Penny Pritzker a kiss in the Rose Garden of the White House during the announcement of her nomination Thursday.