Obama's Subprime Pal: Finance Chief Penny Pritzker's Bank Failed in 2001 Costing 1400 Their Savings

[Maddy McCall]

Obama's subprime pal
PENNY PRITZKER | Finance chief's bank failed in 2001, costing 1,400 customers some of their savings


White House hopeful Barack Obama talks a lot on the campaign trail about how failing banks have used subprime loans to victimize customers.

"Part of the reason we got a current mortgage crisis has to do with the fact that people got suckered in to loans that they could not pay," he told a crowd in Reading, Pa., last week. "There were a lot of predatory loans that were given out, a lot of teaser rates. Banks and financial institutions making these loans were making money hand over fist."

One of the banks that went under after making a lot of subprime loans -- leaving 1,400 of its customers without part of their savings -- was Chicago's Superior Bank.

At the helm of Superior Bank at least some of the time was Obama's national finance chairwoman, Penny Pritzker, an heiress to the Pritzker fortune.

Obama's campaign notes that Pritzker stepped down as chairwoman of the bank's board in 1994, seven years before it failed. She then went on the board of the bank's holding company.

But a letter obtained by the Chicago Sun-Times shows that until the end, Pritzker appeared to be taking a leadership role in trying to revive the bank with an expanded push into subprime loans.

Pritzker wrote in May 2001 that her family was recapitalizing the bank, and she pledged to "once again restore Superior's leadership position in subprime lending." The bank shut down in July 2001.

Pritzker's attorney Kevin Poorman and Obama's campaign spokesman emphasized that not all "subprime lending" is the "predatory" kind that Obama and White House rival Hillary Clinton rail against. The kind of subprime lending Superior was doing in 2001 was not predatory, Poorman said.

But at least some of the 1,400 victims who are still owed money seven years after the bank failed say Pritzker is the wrong person for Obama to put in charge of the campaign's finances when part of his campaign is about reforming the banking industry.

"They still owe me $113,000," said Fran Sweet, 63, of Downers Grove, who deposited her $480,000 retirement account at Superior a month before it collapsed. "To the Pritzkers, this is nothing. They probably think, 'Why pay her back?' That's nothing. But we're all upset that someone who made these decisions could be in that position."

MORE: http://www.suntimes.com/news/politics/obama/919177,CST-NWS-pritz28.article

[blm]

1. Hey Maddy - Some of the Pritzkers are also top donors to Clinton campaign.

.

[Maddy McCall]

2. Are they steering her finance policy, as finance chairs of her campaign?

[blm]

5. They're part of her top tier. And you never showed concern about massive banking scandals

when throughout the 90s the Clintons protected all the BCCI thugs for GHWBush, Jackson Stephens, Dubai and Saudi royals, Marc Rich and many others who have been lining Clintons' bank accounts by the tens of million the last 8 years.

And Penny wasn't even PART of the actions you want her smeared with, anyway.

BILL CLINTON, however, did play an active role in protecting BCCI thugs, didn't he?

[NYCGirl]

17. Her brother is national chairman of Citizens for Hillary, in charge of fundraising,

outreach, and policy matters.

http://www.chicagotribune.com/news/nationworld/chi-0705130653may14,1,540339.story?coll=chi-news-hed

As sister and brother, Penny Pritzker and Jay Robert "J.B." Pritzker have fought over everything from toys to how to divide a family fortune worth billions.

Now they are going head-to-head in politics, with the Democratic presidential nomination as their battleground. One is leading the fundraising for Sen. Barack Obama, while the other has a new alliance with Sen. Hillary Rodham Clinton.

In an interview Sunday, J.B. Pritzker said he would become the national chairman of Citizens for Hillary, a new campaign initiative that will be charged with grass-roots outreach, fundraising and policy matters.

Until now, the younger Pritzker had stood on the sidelines of the presidential campaign, not drawing attention from his older sister, who is Obama's national finance chairwoman.

[indimuse]

3. Obamacans DON"T care!

Obama could do ANYTHING...he is their Savior.

They will come back at you, his brother works for Hillary's campain...He is NOT a crook though. It is Penny who hurt so many people! Obama surrounds himself with TRASH!Obamacans DON"T care!

[blm]

7. You don't care that Jackson Stephens brought BCCI to this country leading to 9-11

and the war on terror, and groomed Bill Clinton's political career to protect the thugs of BushInc involved in his BCCI dealings and you want us to get warm over THIS?

[PBS Poll-435]

8. Pardon Me. This isn't my thread, but I do believe you are hijacking it.

[blm]

10. Nope - it's a reply to what was posted - WHAT WE should care about re financial

dealings of those involved with a candidate.

[indimuse]

4. Obamacans DON"T care!

Obama could do ANYTHING...he is their Savior.

They will come back at you, his brother works for Hillary's campain...He is NOT a crook though. It is Penny who hurt so many people! Obama surrounds himself with TRASH!Obamacans DON"T care!

[PBS Poll-435]

6. Wow. A real article (not an Op/Ed,) in a real paper (Not PoHuff,)

:thumbsup:

[sandnsea]

9. 2001 was way before this loan stuff started

I think the decent thing to do would be to pay all these people back, but that's how bankruptcy works. Individuals aren't responsible for corporate business failures.

[Texas Hill Country]

11. super

[ProSense]

12. Penny Pritzker was chair of the bank from 1991-1994. The bank failed in 2001, and yet:

The Pritzkers and Superior Bank

Obama Campaign Statement

"Penny Pritzker was never accused of any wrongdoing nor did she receive compensation in relation to the closing of Superior Bank in 2001, and instead of walking away as millions of homeowners and stockholders suffered, the Pritzker family entered into a voluntary settlement and agreed to pay the government $460 million to defray its losses. Former FDIC Chairman William Isaac said he had 'never known any investor in a failed bank to take responsibility as the Pritzkers have done.' Senator Obama believes that the current housing crisis was caused by lax regulation and a system that put the interests of corporations before the interests of homeowners and investors and he has proposed an aggressive plan to step up the regulation of our financial markets to restore fairness and balance to our economy and to prevent a housing crisis of this scale from occurring again."


Penny Pritzker Statement

"I regret that Superior Bank failed in 2001. I was chair of the bank from '91-94 and over those years, the bank achieved high ratings from the Office of Thrift Supervision. Superior's failure was complex. In short, the bank failed in 2001 because regulators concluded that the valuation of certain assets in Superior's financial statements, which had been audited by Ernst & Young for many years and previously approved by regulators, was overstated and as a result the bank was not capitalized sufficiently. My family voluntarily agreed to pay the FDIC $460M to help defray costs incurred by the government and other losses in connection with the bank's closure. We did this without litigation or any allegation by federal regulators of wrongdoing. I am proud of how my family responded to this situation."


THE PRITZKERS DID MORE THAN ANY OTHER BANK OWNER IN HISTORY TO SETTLE THE CASE, VOLUNTARILY SETTLING AND PAYING HALF A BILLION DOLLARS

Forbes: The Pritzkers Agreed To Pay $460 Million; "No Bank Owner In History Had Ever Offered Anything Close To That To Settle A Case." Forbes reported, "The Pritzkers initially seemed confident, offering in July 2001 to infuse the bank with $210 million. But by December, with details of Superior's losses under increasing scrutiny, the family was forced to open its checkbook, agreeing to shell out $460 million over 15 years. No bank owner in history had ever offered anything close to that to settle a case." (Forbes, 9/30/02)

Former FDIC Chairman: "I've Never Known Any Investor In A Failed Bank To Take Responsibility As The Pritzkers Have Done." Former FDIC Chairman William Isaac wrote in a Letter to the Editor, "I represented the Pritzkers in their discussions with the FDIC after Superior Bank failed. The family decided to stand behind its investment, ultimately agreeing to pay the FDIC $460 million over a 15-year period, without interest. This is roughly equivalent, on a net present value basis, to the amount the family offered to contribute to keep Superior from failing. I served as FDIC chairman during the 1980s banking crisis. I've never known any investor in a failed bank to take responsibility as the Pritzkers have done. " (Forbes, William Isaac Letter to the Editor, 10/14/02)

The FDIC Lawsuit Against Ernst & Young Didn't "Implicate Superior's Owners Or Management" And The Complaint Went "Out Of Its Way To Sing The Pritzkers' Praises." "The FDIC's allegation against Ernst & Young made big headlines over the weekend. It seeks $2 billion in damages and claims the firm hid accounting errors at Superior to avoid a scandal that might have interfered with the $11 billion sale of Ernst & Young's consulting group in June 2000. But the FDIC's complaint doesn't implicate Superior's owners or management. In fact, it goes out of its way to sing the Pritzkers' praises." (Forbes, 11/5/02)

more

[PBS Poll-435]

13. I love that the Obama Campaign has a Rabid Response to this...

:rofl::rofl:

[ProSense]

14. April 3.

You're salivating over an old spin that was debunked April 3.

Now, that's funny.

[PBS Poll-435]

16. Not salivating over anything. Just entertained.

Reading more into something than is there?

[rodeodance]

22. yet they are obsessed with hillary and her brief work over 20 years ago

at Walwart.

what a bunch of hypocrits

[mopinko]

21. hillary clinton, all slime, all the time.

sheesh.

[Vinca]

15. Yet another Groundhog Day posting.

There are about 6 Obama stories that are reposted about once ever couple of hours over and over and over and over and over and over. The Clinton camp has finally come up dry at the old scandal well.

[lojasmo]

18. I read the congressional report.

Pritzger's name is not mentioned.

[BlueIdaho]

19. This looks like a job for plastic man!

strrrrrreeeeeeeeeeeeeeeeetch

[nichomachus]

20. Karl Rove thanks you for your help. Keep it up and

you may get an invitation to McCain's inauguration.