I wrote a blog post about Penny Pritzker, 2008 campaign finance chairman for Barack Obama 2 weeks ago titled, “Is Obama for the People or the Banks?” and in that post I quoted Earl Ofari Hutchinson from the Huffington Post.
I had to do more research into this and expose the truth behind the Pritzker family, their involvement in the Superior Bank failure and what it means to the American people, who need to know the truth.
NY Times (Dec, 2001):
The Pritzkers, one of the nation’s wealthiest families and heirs to the fortune created by the Hyatt hotels, agreed today to pay a record $460 million to the federal government to avoid being punished for the failure of Superior Bank F.S.B., the big savings and loan institution that regulators seized last summer.
Federal officials said the payment, which will be spread out over 15 years, is the largest settlement ever in the failure of a banking institution. The failure itself is one of the largest in the last decade, one that some estimate could cost the government up to $1 billion.
Unbelievable isn’t it? The failure of Superior Bank, based in Hinsdale, cost the F.D.I.C. about $700 million, making it one of the largest federally insured financial institutions to fail in a decade. Regulators said Superior had collapsed because of poor lending practices and sloppy bookkeeping.
One of the unfortunate victims who suffered as a result of the poor lending practices at the hands of the Pritzker family was Fran Sweet, who was written about in the In These Times in 2002 (emphasis and italicized comments added):
Meanwhile, roughly 1,000 depositors who had deposits above $100,000 in a Superior account—money above the FDIC-insured limit—lost about $65 million. Most of them were middle-class individuals, attracted by Superior’s high interest rates. [Ed. note: it is presence of FDIC itself that allows unsound banks to offer high interest rates like this.] In the three months just before the bank was closed, there was a surge of $9.6 million in uninsured deposits. Since about 54 percent of the uninsured money has since been repaid as Superior was sold off, the depositors have still collectively lost about $30 million. (That just happens to be the amount that the Pritzkers gave to the University of Chicago’s Pritzker School of Medicine earlier this year.)
Some of that money could have paid back Fran Sweet for the roughly $138,000 that she has still not recovered from her deposits at Superior. After retiring as a manager at a telecommunications company, Sweet was seeking a secure place to put her entire retirement savings of about $500,000. “I knew the Pritzkers were owners of the bank,” she says, “and they were a reputable name in Chicago. I had no idea that the bank was in trouble.”
She even asked a bank manager if there was anything wrong with the bank. “She said, ‘No, nothing is wrong, We’re owned by the Pritzkers,’ ” Sweet recalls. “I want it all back. I worked 23 years for a company and got this money from them as a buyout, and the Pritzker family and Dworman stole it from me.”
The political blogosphere has debated the Pritzker/Obama relationship and it is the same ole BS bashing of words, comments and rants. While I have a tendency to rant, a lot, my rants focus on the American people who are getting screwed by corporate America and not the men and women in the glass towers like Obama and the Pritzker family.
I wanted to share these words from a victim of the Pritzker family and with everyone around the world. Fran Sweet just left this comment on my blog (a victim of Superior Bank):
I’m the person mentioned in the article “Breaking the Bank” published in In These Times, 11/08/02.
As of this date I have not been repaid full the amount stolen from me by Penny Pritzker & Superior Bank. To add insult to injury approximately one year after stealing $42 million, the Pritzker family gave a $30 million dollar gift to the University of Chicago. My letters sent to Edgar D.Jannotta, Chairman of the Board of Trustees University of Chicago and other board members asking them to examine their conscience on receiving this money from the same family that stole $42 million dollars from Superior Bank depositors went unacknowledged.
I wonder if Michelle Obama was associated with the University of Chicago Board of Directors at during this time?
In addition, except for Stephanie Tubbs-Jones, letters sent to the 21 U.S House of Representatives Committee on Financial Services Subcommittee on Oversight & Investigation members regarding the Pritzker theft went unacknowledged. Included in this committee were Luis V. Gutierrez (IL) and Janice Schakowsky (IL). These people have no regard for everyday people, caring only about the billionaire class. Needless to say, I have no respect for Senator Obama who has aligned himself the likes of these people.
Could Senator Obama actually be considering Ms. Pritzker for a position on his administration?
If we are to use a person’s judgment as a voting criterion, as Senator Obama suggests over and over again, then the best thing would be a vote against a man with such poor judgment, i.e. Barack Obama. He was in Chicago at the time of the Superior Bank failure & has full knowledge of what went on and the cause of the collapse.
Here is an interview with Fran Sweet and Dennis Bernstein of the Pacifica radio network conducted yesterday in which Fran shared her experience in the original subprime mortgage debacle and expressed her thoughts on Barack Obama and Penny Pritzker.
It amazes me that the media has been virtually silent about the Penny Pritzker and her family’s involvement in the banks failure and her new position with the Obama campaign as his finance chair. Especially in light of the mortgage and housing melt down that is blamed on the same issues that caused the failure of the Pritzkers’ Superior Bank.
Regulators say Superior was badly managed and insolvent when they closed in July 2001. The bank specialized in loans to people with poor credit histories, a practice called subprime lending. Sound familiar?
Here we are, 7 years later and if you truly think about it, Superior Bank was the leader and pioneer of reckless lending and poor accounting in the lending industry. Maybe Aaron Krowne should place this bank at #1 on his infamous implosion list of failed and imploded lenders which now is at 242.
On July 27, 2001, the Office of Thrift Supervision officially closed the banks doors and issued this pess release. These words are straight from the OTS:
OTS Closes Superior Bank FSB; Hinsdale, Ill. Thrift is Insolvent
Superior Bank suffered as a result of its former high-risk business strategy, which was focused on the generation of significant volumes of subprime mortgage and automobile loans for securitization and sale in the secondary market. OTS found that the bank also suffered from poor lending practices, improper record keeping and accounting, and ineffective board and management supervision.
Superior became critically undercapitalized largely due to incorrect accounting treatment and aggressive assumptions for valuing residual assets. The bank also experienced significant losses during 2000 from its automobile lending program.
OTS has determined that Superior Bank is insolvent, having incurred losses that have depleted all or substantially all of its capital. OTS also determined that Superior Bank was no longer able to transact business in a safe and sound manner.
OTS notified the bank of its serious concerns in July 2000.
The bank was purchased by two families in 1988 — the Pritzker family of Chicago, owner of Hyatt Hotels and other interests, and the Dworman family of New York, with interests in real estate and financial services activities — and was operated through a complex network of holding companies.
In light of these findings, OTS determined that closure and the appointment of FDIC as receiver were necessary to protect the interests of the bank’s insured depositors.
As of March 31, 2001, the failed bank had total assets of $1.9 billion and total deposits of $1.5 billion. FDIC insures depositors’ accounts up to the statutory limit of $100,000.
Superior is the only bank that OTS has closed in 2001, and only the fourth OTS-regulated institution closed in the past five years.
The FDIC has established a toll free telephone number for customers of Superior. That number is 1-800-331-6306, and will be available until midnight tonight and then from 7 a.m. to 7 p.m. daily thereafter.
And guess who bought the servicing portfolio rights of the failed bank? From the FDIC:
The assets were sold to EMC Mortgage Corporation, a wholly owned subsidiary of Bear Stearns & Co., Inc.. The FDIC recovered $517 million (net) from the residual interest portfolio since Superior’s failure on July 27, 2001, including $471 million in sales proceeds. The transfer of the servicing rights to EMC Mortgage Corporation is expected to be completed by the end of June.
So the glorious Federal Reserve bails out Bear Stearns, TO THE TUNE OF $30 BILLION and Bear Stearns was involved in buying all the toxic crap from Superior Bank in 2001? Holy smokes Batman! What the hell is going on here? I am sure the guys at Bear packaged and sold that stuff fast. Rinse and repeat. They now have found the new business model that they will duplicate over and over to where we sit today folks.
Who is Penny Pritzker?
Pritzker is the national finance chair of Obama’s presidential campaign. She’s from one of America’s richest families, the founders of the Hyatt hotel chain, and is herself the 135th richest person in America.
She also has an ugly history as the former chair of Superior Bank in Illinois, which (1) was created thanks to a giant S&L bailout by the government; (2) then helped invent the securitization of subprime mortgages; and (3) then collapsed in 2001 thanks to massive financial chicanery.
Interestingly, she lives in a fancy Chicago neighborhood just a short stroll away from Austan Goolsbee, a University of Chicago professor who’s one of Obama’s main economic advisors. It’s really quite wonderful how Goolsbee can maintain his deep admiration for the Free Market while living a few blocks away from billionaires who use massive government power to create and subsidize their businesses. (Both Pritzker and Goolsbee are, of course, graduates of Stutts University.)
I have been wondering why the Clinton camp has been silent on this matter and here is a theory on why:
One reason we don’t hear the Clinton campaign raising this as an issue is because Penny’s brother has apparently been playing a spokes-person role in Hillary’s campaign. Reminds me of Enron buying off both Republicans and Democrats, along with accounting firms, the media, law firms, regulators, ….
Interesting reads on the Pritzkers, the Superior Bank failure.
FDIC Failed Bank Information - Superior Bank
OTS Closes Superior Bank FSB; Hinsdale, Ill. Thrift is Insolvent
OTS Announces Resolution of Charges Against Auditor of Closed Superior Bank FSB
The Consent Order requires that Ernst & Young pay $85,000,000 to the Federal Deposit Insurance Corporation (FDIC) as receiver for Superior Bank. Ernst & Young agreed to issuance of the Consent Order without admitting or denying that its conduct in auditing Superior Bank did not comply with any professional accounting standards.
Ernest & Young Order from the OTS - PDF
Ernst & Young LLP Stipulation and Consent to Issuance of Consent Order - PDF
Ernst & Young to Pay U.S. Over Bank Collapse in ‘01 - NY Times
Dennis Berstein:“Obama’s Sub-Prime Conflict”
Earl Ofari Hutchinson:“If Obama’s For Real on the Sub-Prime Crisis, He’ll Dump His Campaign Finance Chair”
Bob Feldman:“Obama Campaign’s Pritzker/Superior Bank S&L Scandal Link?”
Flashpoints Radio:“An investigative report into Penny Pritzker”
The lender carnage, death and destruction litter the home page of Aaron Krowne’s Mortgage Lender Implode-O-Meter like the beach at Normandy on D-Day. The infamous list has grown from September 2006 when Aaron started the website with approximately 10 failed lenders to a whopping 276 major U.S. failed lending operations today.