Thursday, May 02, 2013

Penny & Me

More connected cronyism from President Obama, as he has selected Penny Pritzker for Commerce secretary.

For Obama she's raised millions, for taxpayers she's cost us millions and the scientific community is united in that fact.

Pritzker's family-owned Superior Bank, Penny served as head of the bank’s board until 1994, and they specialized in sub-prime lending before ending up becoming one of the greater banking collapses in American history.

The Pritzkers agreed to pay a record $460 million to the federal government to avoid being punished for the failure of Superior Bank FSB. It was a 15 year, interest-free settlement that granted the Pritzkers a share of the government's settlement with the bank's former accountants.

But after paying $316 million of the interest-free debt, the family quietly struck a deal with the Federal Deposit Insurance Corp. (FDIC) in June 2011 to discount the balance in return for paying off the debt early.  The FDIC Insurance Fund is still out $296 million after paying off Superior’s insured depositors. 

I suppose it's just a coincidence that her pal Barry was President when this all came down.

The Internal Revenue Service sued her family to collect taxes from the estate of Abram Pritzker, Penny’s grandfather. The case centered on hundreds of trust funds he’d set up in the Caribbean to avoid taxes. The IRS sought $53 million in taxes, before the two sides settled in 1994 for $9.5 million.

Mere pennys on the dollars, which enables her to sustain a personal fortune estimated at $1.85 billion, making her among the 300 wealthiest Americans.


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