Good news: Likely Obama nominee for Commerce notorious for subprime lending; Update: Pritzker drops out

posted at 12:30 pm on November 20, 2008 by Allahpundit

Did I say “likely”? That’s because this CNN story cited sources last night claiming that Penny Pritzker was in fact the pick. And now, come the morning, all references to her have been scrubbed and WaPo’s reporting that her appointment’s most unlikely indeed. For “business reasons.”

The early favorite for the job, Pritzker may take herself out of the running soon, sources said. Pritzker was the first campaign insider and “Friend of Barack” to surface as a possible Cabinet pick.

Pritzker had started a review of her vast financial holdings, weighing whether she could disentangle herself to the extent necessary to meet Obama’s strict standards for service in his administration. Assuming she could, and wanted to, Obama sources said, the job would be hers.

It’s a testament either to The One’s loyalty (she was his finance chair) or to his absolute confidence that the Democrats are bulletproof on the Fannie/Freddie meltdown that he’d consider rolling the dice on this confirmation. Pritzker, you see, was securitizing subprime mortgages long before securitizing subprime mortgages — and driving the economy into a ditch — was cool:

Ms. Pritzker served as Superior [Bank] chairman until 1994. During that period, Superior “embarked on a business strategy of significant growth into subprime home mortgages,” which were then packaged into securities and sold to investors, according to a 2002 report by the Treasury Department’s Inspector General.

“Superior was at the forefront of the securitizing of subprime mortgages,” says Timothy Anderson, a retired bank consultant who has studied Superior and other failed thrifts.

Said Anderson elsewhere, in a line heaven-sent for confirmation-hearing soundbite immortality, “Superior’s owners were to sub-prime lending, what Michael Milken was to junk bonds.” And, true to form, it blew up in her face:

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…

[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…

“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.”

The reasons for the bank’s failure were “complex,” Pritzker insists. Exit question: Aren’t the Democrats bulletproof on Fannie/Freddie? The congressional face of the meltdown not only won reelection, but his new project is trying to balloon a bailout for the Big Three into nine-figure territory. Americans don’t care and Obama has political capital to spare. Why not push Pritzker at Commerce and kick Uncle Barney upstairs to Treasury for good measure?

Update: She’s going to take one for the team: Pritzker says no, thanks to “vetting issues.”


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

SCORE for the new media!

:-)

Buckaroo on November 20, 2008 at 12:33 PM

“It’s a testament [snip] to The One’s loyalty

perfect — we’ve found yet another weakness of his!

Buckaroo on November 20, 2008 at 12:34 PM

Doesn’t she/family also have some connections with Iran?

Firebird on November 20, 2008 at 12:34 PM

“Firebird on November 20, 2008 at 12:34 PM”

that would be HI-LARIOUS!

/and sad
//but mostly hi-larious …

Buckaroo on November 20, 2008 at 12:36 PM

“Change you can believe in”

Schadenfreude on November 20, 2008 at 12:36 PM

But then, wasn’t this sort of thing to be expected?

SuperCool on November 20, 2008 at 12:36 PM

Exit question: Aren’t the Democrats bulletproof on Fannie/Freddie?

Yes.

OneGyT on November 20, 2008 at 12:38 PM

I thought Baracky’s campaign rigors gave him the necessary experience to make decisions such as this?

Are you tellin’ me that the Super Wonder Messiah™ doesn’t seem to know what the hell he is doing, and instead is floundering around like a landed perch?

Bishop on November 20, 2008 at 12:39 PM

Why not push Pritzker at Commerce and kick Uncle Barney upstairs to Treasury for good measure?

Let’s not. Some of us still need to earn a living.

phronesis on November 20, 2008 at 12:39 PM

Penny’s Iran ties WTF?

Firebird on November 20, 2008 at 12:41 PM

…to meet Obama’s strict standards for service in his administration.

I’ll be in the other room LMAO for the rest of the day.

innominatus on November 20, 2008 at 12:42 PM

Is Robert Rubin still chairman of Citigroup? He might need a new job soon enough. It would be a heck of a lot better than Frank.

phronesis on November 20, 2008 at 12:43 PM

She was the finance chair of Obama’s campaign, and she was neck deep in a sub-prime loan bank failure, and now we’re hearing about it? Team McCain sure didn’t make much of an issue of this.

And Obama has the nerve to play Mr. Clean and sneer at lobbyists. His very close allies played a major role in scandalous business practices that have undermined economies world wide, but hey, no lobbyists, sorta.

forest on November 20, 2008 at 12:43 PM

The Dems are bulletproof on Fannie/Freddie as long as the MSM continues to be the propaganda wing of the Democrat Party. The general public is too stupid and too lazy to find out what is exactly going on and who is responsible for this meltdown.

Three weeks ago I thought people were generally smart enough to see through this crap and figure out what is going on, now I know they aren’t.

America elected these crooks, and I hope every one of the 63 million Obama voters loves every second of the screwing they are going to get for the next 4 years.

tyrfing on November 20, 2008 at 12:44 PM

Is anyone involved in politics, not have their fingers in this pie?

right2bright on November 20, 2008 at 12:46 PM

Release the hounds!

perroviejo on November 20, 2008 at 12:46 PM

She’s also a big admirer of Soros. Co-hosted a gathering in Chicago to introduce Soros to Obama.

sherry on November 20, 2008 at 12:47 PM

Superior Bank failed in 2001. Unfortunately the rest of the industry did not learn a lesson and kept right on ramping up subprime lending.

rockmom on November 20, 2008 at 12:52 PM

Are you tellin’ me that the Super Wonder Messiah™ doesn’t seem to know what the hell he is doing, and instead is floundering around like a landed perch?

Bishop on November 20, 2008 at 12:39 PM

dont give perch a bad name

UNREPENTANT CONSERVATIVE CAPITOLIST on November 20, 2008 at 12:52 PM

She’s not a supporter/advisor of Obama.

Just like Franklin Raines and Jim Johnson weren’t.

danking70 on November 20, 2008 at 12:53 PM

Gremlin in Chief.

Making America a third world nation, one office at a time.

Hening on November 20, 2008 at 12:54 PM

YAY!!!!

Mr Purple on November 20, 2008 at 12:54 PM

I can’t stand it!!!

All these administrative positions are actually being vetted. While their boss, the POTUS-Elect was not.

To quote beththebaker: OY VEY!

Pass the Tylenol.

kingsjester on November 20, 2008 at 12:59 PM

What does it say when all your closest friends and advisers have “vetting issues?”

Mini14 on November 20, 2008 at 12:59 PM

I cannot believe her name was even floated.

HawaiiLwyr on November 20, 2008 at 1:01 PM

Oh, darn. I would have liked to see the confirmation hearings. All that hopenchange on display for all the faithful to see!

PattyJ on November 20, 2008 at 1:01 PM

Aw shucks, and I was looking forward to the softball questioning she would’ve gotten in her confirmation hearing.

rbj on November 20, 2008 at 1:01 PM

Aren’t the Democrats bulletproof on Fannie/Freddie?

I don’t believe they are. The people are starting to wake up from the Obama coma. This bailout has the potential to bite them in the ass..

Pam on November 20, 2008 at 1:03 PM

Meet the new boss same as the old boss. Maybe he could hire all of the execs that are now out of work due to the failure of some investment banks.

DFCtomm on November 20, 2008 at 1:03 PM

…I hope every one of the 63 million Obama voters loves every second of the screwing they are going to get for the next 4 years.

tyrfing on November 20, 2008 at 12:44 PM

But they are all wearing protection, right?

Yoop on November 20, 2008 at 1:03 PM

Update: She’s going to take one for the team: Pritzker says no, thanks to “vetting issues.”

I think the shenanigans with O!’s campaign fundraising had something to do with this, too. It really would open the door to a lot of questions in the public arena that they seem to be neatly dodging otherwise.

Y-not on November 20, 2008 at 1:06 PM

Anybody know if it was Pritzger’s idea to disable the security/ID verification measures on Obama’s online donations?

forest on November 20, 2008 at 1:08 PM

I cannot believe her name was even floated.

HawaiiLwyr on November 20, 2008 at 1:01 PM

She was his campaign finance chair.

Beneath the water, carry the water!

SlimyBill on November 20, 2008 at 1:09 PM

Dang, I was really looking forward to Penny’s confirmation hearings.

Meanwhile, as further proof that Obama plans to govern from the center, there’s always Linda Darling-Hammond, Bill Ayers’ first appointment to Obama Administration?

Buy Danish on November 20, 2008 at 1:10 PM

The people responsible for our financial meltdown should be hanged in the National Mall in full view of CSPAN, CNN, MSNBC, NPR, NYT, etc etc etc.

There is no excuse for this happening under the noses and with the tacit approval of our Congress. None.

I am stunned that Pritzker’s name was even floated.

eaglesdontflock on November 20, 2008 at 1:10 PM

Watch out for the Head Fake…pretending Penny…and instead we get a beaut from the far left we can’t trace.

gracie on November 20, 2008 at 1:13 PM

I love the way it was packaged- that Pritzger had to see if she could meet Obama’s strict standards. You don’t need strict standards to see the problem with Penny Pritzker at Commerce. You barely need any standards.

MayBee on November 20, 2008 at 1:14 PM

Clinton cronies, white collar crooks and lobbyists.

Bang up start so far, Barry.

Chuck Schick on November 20, 2008 at 1:16 PM

Its all about the campaign finances… not Subprime loans.

Subprime would make them look bad…

Under Sarbains/Oxley the campaign finances could be jail time.

Romeo13 on November 20, 2008 at 1:17 PM

The people responsible for our financial meltdown should be hanged in the National Mall in full view of CSPAN, CNN, MSNBC, NPR, NYT, etc etc etc.

There is no excuse for this happening under the noses and with the tacit approval of our Congress. None.

I am stunned that Pritzker’s name was even floated.

eaglesdontflock on November 20, 2008 at 1:10 PM

It’s a little off subject, but do you remember the Chinese executives that were executed over the contaminated food several months ago? Do we have something to learn from our Eastern trade partners?

DFCtomm on November 20, 2008 at 1:19 PM

Hopenchange’s first fatality.

moxie_neanderthal on November 20, 2008 at 1:20 PM

She’s going to take one for the team: Pritzker says no, thanks to “vetting issues.”

She was going to “vet” her pants.

drjohn on November 20, 2008 at 1:21 PM

If there were actualy “vetting issues” to be concerned about, Obama never would have been elected and nobody around him would be qualified to be dog catcher.

JammieWearingFool on November 20, 2008 at 1:22 PM

I cannot believe her name was even floated.

HawaiiLwyr on November 20, 2008 at 1:01 PM
She was his campaign finance chair.

Beneath the water, carry the water!

SlimyBill on November 20, 2008 at 1:09 PM

Wooops submitted too soon.

She was his campaign finance chair, AND NO ONE EVEN NOTICED.

SlimyBill on November 20, 2008 at 1:22 PM

If there were actualy “vetting issues” to be concerned about, Obama never would have been elected and nobody around him would be qualified to be dog catcher.

JammieWearingFool on November 20, 2008 at 1:22 PM

Shoot, if there was true vetting, the House would be able to hold a roll call in the back of a Grand Caravan.

SlimyBill on November 20, 2008 at 1:24 PM

She’s going to take one for the team: Pritzker says no, thanks to “vetting issues.”

………….. too bad she just couldn’t seal her own reacords like Mr. Obama, President Elect, the Office of…………

Seven Percent Solution on November 20, 2008 at 1:24 PM

She was his campaign finance chair, AND NO ONE EVEN NOTICED.

SlimyBill on November 20, 2008 at 1:22 PM

I sure noticed. I wrote countless letters about it, and posted it here as well. It takes a special kind of stupidity for someone to even mention her for that sort of position.

drjohn on November 20, 2008 at 1:27 PM

Believe you can Change in.

portlandon on November 20, 2008 at 1:27 PM

Everyone knows she funneled money from the middle east to his campaign.

Firebird on November 20, 2008 at 1:31 PM

It takes a special kind of stupidity for someone to even mention her for that sort of position.

drjohn on November 20, 2008 at 1:27 PM

Or Chutzpah. Don’t forget that the first people who Madame Pelosi thanked for their “leadership” during the bailout negotiations was Barney Frank and Chris Dodd.

Buy Danish on November 20, 2008 at 1:39 PM

Dang, I was really looking forward to Penny’s confirmation hearings.

Meanwhile, as further proof that Obama plans to govern from the center, there’s always Linda Darling-Hammond, Bill Ayers’ first appointment to Obama Administration?
Buy Danish on November 20, 2008 at 1:10 PM

Ha! I, too, was looking forward to that! I am really tripping on all of this. Your Bill Ayers link just sent my “Conspiracy Theory” Truth Level up to orange!
*Looks down all slippery slopes*
Where the hell are we going!?

Elektra on November 20, 2008 at 1:39 PM

Pritzker is a billionaire heiress to the Hyatt hotel fortune.

No more stays for me at any Hyatt hotel.

This goes on my ever expanding list of people and places that will not get my business.

tru2tx on November 20, 2008 at 1:40 PM

oh dear, so many corrupt, anti american, socialist cronies; so few cabinet positions. what will “the occupant” do?

samiam on November 20, 2008 at 1:41 PM

Under Sarbains/Oxley the campaign finances could be jail time.

Romeo13 on November 20, 2008 at 1:17 PM

Do you know if Sarbanes-Oxley applies, or just (like me) suspect that it does? I’ve been trying to try to get one of the blogs with legal minds on this issue for several weeks, but I haven’t been successful.

This is what I’ve gleaned on my own:

A couple of the provisions of SOx apply to non-profits (whistle-blowing, destruction of records), but the bulk of it applies to for-profit organizations.

Despite that fact, when SOx passed, non-profit groups (and their professional societies) immediately developed policy recommendations that reputable organizations put in place to avoid any possible problems with SOx. (I worked at some of those organizations and I can tell you that the stuff O!’s campaign did with its fundraising and record-keeping would not pass muster.)

Since SOx, some states (I have not found a complete list, but California and NY are two of them) have passed measures resembling SOx to apply specifically to non-profits. For example, California passed The California Nonprofit Integrity Act of 2004. This measure applies to organizations who conduct business in California, not just CA-based orgs. Commercial fundraisers and fundraising counsel are subject to the act which includes, amongst other things, publicly-available audited financial statements.

I really think the Obama campaign and its leadership are severely exposed under Sarbanes-Oxley and related measures, but I don’t have the legal background to prove it. If anyone does, could you please jump in or let Ed or Allah know?

Y-not on November 20, 2008 at 1:44 PM

Update: She’s going to take one for the team: Pritzker says no, thanks to “vetting issues.”

And the criminal investigation that would follow…

Bush should have nominated the Our New Getting More Confused Overlord for a cabinet post 2 years ago…Then he could of had some kind of vetting process…and probably wouldn’t be our new ONGMCO…

BigWyo on November 20, 2008 at 1:44 PM

Where the hell are we going!?

Elektra on November 20, 2008 at 1:39 PM

Look downward. Way down, farther than the eye can see.

Buy Danish on November 20, 2008 at 1:50 PM

I’m seeing this thread for the first time AFTER the update….are you kidding me??? Penny Pritzker was being considered for Commerce??

Wow…..Obama has the most un-ethical administration evah and it hasn’t even started.

Let’s roll.

ex-Democrat on November 20, 2008 at 1:54 PM

Intersting… the Obama for America site is STILL taking donations.

Bribery of a soon to be sitting President anyone?

Romeo13 on November 20, 2008 at 1:55 PM

If the bailout was only 9 figure territory I wouldn’t feel so bad.

RW Wacko on November 20, 2008 at 1:59 PM

She was the finance chair of Obama’s campaign, and she was neck deep in a sub-prime loan bank failure, and now we’re hearing about it?

I heard about it during the Palin-disinvite-to-the-Achmadinnajacket-NYC-protest-by-Democrat-cowards debacle.

It was pointed out that moonbats and peaceniks would be feting the little persian freak at Pritzker’s hotel.

Of course, crickets from the lamestream media.

Let’s roll.

ex-Democrat on November 20, 2008 at 2:02 PM

Elektra

If you liked my earlier link to Bill Ayers you’ll like this one too. CPUSA’s expectations for Obama.

It’s all the same kettle of fish.

Buy Danish on November 20, 2008 at 2:11 PM

I wonder if she withdrew because of her recent family scandal. Her brothers and she stole money from their father’s daughter by his second marriage. The daughter sued and criminally accused them of stealing from her trust fund. Which they did. She won, they lost. It was a very juicy story.

I am beginning to think that the “Obama Questionaire” is a tool devised by Axelrod to renege on the promised favors.

sherry on November 20, 2008 at 2:13 PM

Y-not on November 20, 2008 at 1:44 PM

Sarbains applies to the accounting firms who RUN these things. It forces them to keep the records and such for 5 years, and to accuratly report what was going on.

But it also covers any CPA paid for by the Obama for America commitee.

Sarbains means they have to keep the evidence, but does not kick off the investigation into campaign finance fraud.

However, it will nail Execs who knowingly perpetuate fraud… will be interesting if they can make the link to knowingly perpetuate CAMPAIGN fraud.

Romeo13 on November 20, 2008 at 2:13 PM

Romeo13 on November 20, 2008 at 2:13 PM

In the non-profit world, Sarbanes-Oxley has been interpreted to mean accountability to board members and other officers of the organizations as well, not just the accountants.

As I understand it, sloppiness (such as the gross lack of controls and standards applied to Obama’s campaign contributions) and ignorance are not excuses for the folks in charge, even if they are removed from the daily monetary side of things.

But as far as I know, the non-profits have mostly been changing their procedures voluntarily as a preventative measure, not necessarily because SOx applies to non-profits. (Actually, I don’t even really know what type of entity the Obama campaign’s fundraising arm would be considered — I just assume it is not the traditional ‘corporate’ organization that I thought the bulk of SOx applied to… ) But, California’s measure would seem to apply to the Obama campaign. I wish someone would investigate this.

Y-not on November 20, 2008 at 2:22 PM

sherry on November 20, 2008 at 2:13 PM

I think it’s more likely that it’s because she earned the title of the Subprime Queen It got little notice during the election, but putting her in front of the Senate would have been a disaster (and I was licking my chops at the thought of it).

Buy Danish on November 20, 2008 at 2:23 PM

Buy Danish on November 20, 2008 at 2:23 PM

I’m sure you’re right. She is a very dicey character, but then again most of the liberals here in Chicago operate with their own set of rules.

sherry on November 20, 2008 at 2:37 PM

Y-not on November 20, 2008 at 2:22 PM

I actualy just reread Sox…. hadn’t done if for a couple of years since I got out of corporate type IT work.

If I read it correctly, what it boils down to is if a CPA sees somthing hinkey… they are required to make public reports to the board… once that weirdness is known by the board, they are then accountable as well if it is not fixed.

Obama contributions were run by a profesional corp… who also ran other Demo campaign finace funds… Chase was the credit card entity, but the other firm was the one who was the one who collected the money, which they then gave to Obamas campaign.

Now, Obama’s campaign should be able to be held accountable for not puttinb sufficient safeguards in place ONCE a problem was known… as it was early on… but its the intersection between campaign finance law, and Sarbains, that is in question…

Or, does a fraudulent campaign finance system, which is KNOWN to have no safeguards vs fraud, rise to the level of fraudulent accounting practices under Sarbains.

Romeo13 on November 20, 2008 at 2:42 PM

on NBC a few minutes ago, they said Penny had withdrawn her name because she had so many corp holdings, that she would never be able to resolve all the conflicts. naturally, the subprime issue was not mentioned.

do you ever feel like we are the only ones in this alternate universe who are not robots?

kelley in virginia on November 20, 2008 at 3:23 PM

sherry on November 20, 2008 at 2:37 PM

Are you familiar with the New Zeal blog? Trevor Loudon, from New Zealand of all places, has the definitive dossier on all the Chicago liberals Communists and Socialists, going back in time for many, many decades up until the present.

Most of them are Barry and Michelle’s dear friends and political associates, or the parents and grandparents who raised them. As Mayor Daley proudly says, they’re “family”.

Buy Danish on November 20, 2008 at 3:24 PM

Now, Obama’s campaign should be able to be held accountable for not puttinb sufficient safeguards in place ONCE a problem was known… as it was early on… but its the intersection between campaign finance law, and Sarbains, that is in question…

Or, does a fraudulent campaign finance system, which is KNOWN to have no safeguards vs fraud, rise to the level of fraudulent accounting practices under Sarbains.

Romeo13 on November 20, 2008 at 2:42 PM

Thanks for your informed opinion.

It sure does sound like they were in violation by intentionally disabling safeguards, doesn’t it?

Y-not on November 20, 2008 at 3:48 PM

It sure does sound like they were in violation by intentionally disabling safeguards, doesn’t it?

Y-not on November 20, 2008 at 3:48 PM

Yeah, no question of that. But it would take a US Attorney with large Cajones to bring this thing to a Grand Jury.

This looks to me like conspiricy to bypass the campaign finance laws, as even standard Credit card transaction safeguards were TURNED OFF.

Question becomes if you can find a paper trail back to the campaign itself, or do you just burn the company who ran the funding process (which IS a for profit company, and thus covered by Sarbains, so all those records still exist).

Romeo13 on November 20, 2008 at 4:11 PM

Is she part of the George Soros Billionaires Club??? Sounds like what the Sandlers did.

reshas1 on November 20, 2008 at 4:24 PM

Again I’ll question The One’s experience as this again proves he has pretty damn little of it.

DannoJyd on November 20, 2008 at 4:51 PM

Buy Danish on November 20, 2008 at 3:24 PM

No, I haven’t heard of it, but thank you for the link. That is unbelievable. The letter from the CT commie lady was chilling. The amount of influence is appalling and no doubt, we are going to see it come out slowly but surely as soon as he gets into office. I always thought the lean-to here in Chicago was the African American influence, I guess I was wrong.

sherry on November 20, 2008 at 5:57 PM

Exit question: Aren’t the Democrats bulletproof on Fannie/Freddie?

Not at all. It’s just there is nobody on the right that can convince any moderate or lefty (and probably a few on the right) to care.

91Veteran on November 20, 2008 at 8:50 PM

Team McCain sure didn’t make much of an issue of this much.

forest on November 20, 2008 at 12:43 PM

…and neither did many other candidates on the right. The whole election was incoherent from the perspective of the GOP.

91Veteran on November 20, 2008 at 8:54 PM

Danish

Smelly, creepy…radical, huh?
Thx for the links.
Can’t wait for his 1st 100 days as we get a feel for his priorities. Already pressing are some of GB’s preemptive strikes.
I wonder, why all this bad blood?

Elektra on November 21, 2008 at 1:03 AM