Pritzker Assured Employees of Bank's Health Two Months Before Failure
After coming under fire in 2008 for her role in the failure of her family’s subprime-lending Superior Bank, President Obama’s campaign defended their then-campaign finance chairwomen, Penny Pritzker, claiming, that "she stepped down as chairwoman of the bank’s board in 1994," seven years before it failed. However, a letter sent by Pritzker to the banks employees in 2001 indicates she was still playing a major leadership role, right up to the bank’s failure that occurred less than two months after the letter was sent.
In the letter, obtained by the Chicago Sun-Times, dated May 31, 2001, Pritzker, who is now President Obama’s nominee for Secretary of Commerce, told bank employees and managers at Superior Bank, that “an agreement had been reached with the Office of Thrift Supervision (OTS) for a $351 million plan to recapitalize” her family’s failing bank.
Pritzker goes on to inform the bank’s employees, “we have been able to preserve the bank’s future and satisfy the requirements of the OTS and FDIC.”
Not only did Pritzker articulate that the bank still held a bright and prosperous future, she also told the employees that reports in the media about the bank’s troubles at the time were “inaccurate” and “untrue,” and encouraged the employees to “remain focused on the strong business fundamentals of sound and fiscally responsible lending.”
Messages like these were echoed by the bank’s employees to depositors who had concerns about their savings held at the bank. John Courtney, a retired veteran who is still out $60,000 more than 10 years after the bank’s failure was also told that the bank, simply being owned by the Pritzker family, was good enough reason he could rest assured that his money was safe.
Despite Pritzker’s claims to bank employees and managers' claims to depositors that the bank was as strong as ever, two months after Pritzker sent the later, the bank’s principles (the Pritzker family of Chicago and Dwarmin family of New York) failed to inject the necessary capital to satisfy the agreement with the OTS and the bank was placed into a receivership by the FDIC.
To avoid any legal repercussions the Pritzkers made a deal to pay the FDIC $460 million over the next 15 years--interest free, roughly $200 million less than the credits they received from the government to initially buy the bank in 1988. Once the Pritzkers paid $316 million to the government, however, they struck another deal, and the FDIC forgave the balance of $144 million. An attorney who represented some of the depositors in a class action suit, Clint Krislov (an open supporter of President Obama), told Breitbart News, the deal for the Pritzkers “was unprecedented,” and left the depositors still un-whole by more than $10 million.
Here is Pritzker's letter to the bank employees. Pritzker's confirmation in the Senate is set to begin this Thursday.