By Doug Palmer
WASHINGTON (Reuters) - Chicago billionaire Penny Pritzker on Thursday appeared on her way to becoming U.S. commerce secretary, after a top Republican lawmaker said she had answered most of his questions about her role in the failure of an Illinois bank and her family's use of an offshore tax haven.
"I can't see that there is anything that would keep her from getting through the process in pretty good shape," Senator John Thune of South Dakota, the top Republican on the Senate Commerce Committee, said after a hearing on her nomination.
Pritzker was President Barack Obama's national finance chairwoman in 2008 and his campaign co-chair in 2012. Her personal fortune is estimated at $1.85 billion, putting her at the pinnacle of the top 1 percent of American households.
The 54-year-old Stanford University-trained lawyer and businesswoman is on the board of the Hyatt Hotels Corp, which her uncle Jay Pritzker founded in 1957, two years before she was born. She plans to leave that position if confirmed.
Pritzker told the committee that Obama wants her to be "a bridge between the administration and the business community" in the hope of improving a sometimes strained relationship.
"That's something I look forward to working very hard on," Pritzker said, adding she also would push for free trade and look for ways to streamline department operations.
The panel's chairman, Democratic Senator Jay Rockefeller of West Virginia, said he believed Pritzker would restore strong leadership at the department.
"You will certainly have my vote," he said.
The committee is likely to back Pritzker's nomination after it returns in June from the upcoming Memorial Day recess, setting it up for swift approval by the full Senate.
She would replace acting Commerce Secretary Rebecca Blank, who is leaving to become chancellor at the University of Wisconsin-Madison.
TAXES AND BANKS
A 184-page financial disclosure form released by the White House provided a detailed view of Pritzker's wealth. It includes $54 million in consulting fees she received from the Canadian Imperial Bank of Commerce Trust Co, which manages an offshore trust for the Pritzker family in the Bahamas.
Some Republicans have said it is hypocritical of Obama to nominate Cabinet members who benefit from offshore tax havens when he criticized 2012 Republican presidential candidate Mitt Romney and others for taking the same step to avoid taxes.
U.S. Treasury Secretary Jack Lew also had to confront questions about his investment in a Cayman Islands tax haven during his recent confirmation process.
Under questioning by Thune, Pritzker acknowledged being a beneficiary of an offshore trust set up when she was "a little girl" and told the panel she has asked the current trustee to step aside and appoint a U.S. trustee.
Thune also pressed Pritzker to explain her role in the failure of Superior Bank, which in the 1990s was a pioneer in subprime mortgages - the type of loans that were blamed for igniting the 2007-2009 financial crisis.
Regulators closed the bank, which was half-owned by the Pritzkers, in July 2001 after auditors concluded that mortgage-related income had been overstated. Five months later, the Pritzkers agreed to pay the Federal Deposit Insurance Corporation $460 million as part of a deal in which the family and the other half-owner admitted no liability.
Pritzker said she was chairwoman of the bank from 1991 to 1994 but never played an active role in its management.
After the bank got into trouble with regulators, "I stepped in on behalf of the 50-percent ownership of my family to try to salvage the situation. Unfortunately those negotiations failed and the bank failed," Pritzker said.
'LIKE SLAVES'
About 30 members of the Unite Here hotel workers' union who attended the hearing painted a different picture of Pritzker.
The union has called Hyatt "the worst hotel employer in America" because of its treatment of workers, failure to reach a new labor contract and opposition to allowing workers at additional Hyatt hotels into the union.
"Today, we send a message to President Barack Obama that Penny Pritzker is not a good choice. She doesn't see people like human beings. (She sees people) like slaves," said Wanda Rosario, one of 100 housekeepers fired by Hyatt in Boston in 2009 as a cost-cutting move.
Under questioning from Senator Claire McCaskill, a Missouri Democrat, Pritzker said she does not support the practice of subcontracting hotel jobs to keep down wage costs and said it was important for employers to provide a safe workplace.
"I've been in business for 27 years. The cornerstone of success in business is you have to have a good relationship and a good balance between management and labor ... . The workforce is part of one's business family, if you will," she said.
(Reporting by Doug Palmer; Editing by Jackie Frank and Xavier Briand)
Source: http://news.yahoo.com/commerce-nominee-faces-questions-failed-bank-tax-havens-160403279.html
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