Penny Pritzker, Barack Obama’s fairy godmother

Nov 11, 2008
Charles Laurence

Billionaire Penny Pritzker put Barack Obama on the road to the presidency. What will she get in return, asks Charles Laurence

Penny Pritzker is the fairy godmother whom Barack Obama will be thanking most profoundly - if privately - when he gets to his Inauguration Ball in Washington in January.

Among the richest Americans - 153rd on the Forbes 400 List with about $2bn to her name - Pritzker has plenty of gold dust to sprinkle, and when Obama organized his presidential campaign, she took on the role of his National Finance Chair.

She did a good job: Barack trounced both primary rival Hillary Clinton and Republican John McCain in the race for campaign funds. By the end, he had five dollars to every one of McCain's.

But Pritzker showered Obama with more than money: before any of the rest of us had heard of Barack Obama, she had taken him under her wing to give him the keys to the Chicago Establishment's fabled political 'machine' which has taken him to the White House.

It has been a triumph for Pritzker as well as for the new President. Her victory makes her the undisputed chief of one of Chicago's wealthiest families, which has a combined wealth of more than $12bn and which founded the Hyatt hotel chain and myriad other businesses. It is also notorious for its secrecy and its feuds.

The Pritzkers are quintessential Chicago Gold Coast, descendants of Jewish immigrants who built the Windy City in America's heartland alongside the Irish, the Poles and, a generation later, the black migrants from the Deep South.

Penny Sue, 49, is the granddaughter of Abram Pritzker, the immigrant born in 1896 who launched the Hyatts which grew into a global brand under the rule of his sons Jay and Robert, both of them Penny's uncles. She went to Harvard and then to Stanford for an MBA before coming home to Chicago to join the family firm.

Penny Pritzker, married, has two teenage children and lives in Lincoln Park. With a fourth generation growing up, there are now dozens of Pritzkers. There are Pritzkers in the universities, the law, the arts and on all the boards of the Chicago theatres, museums and galleries. Penny proved to be a real chip off the old block, and has joined uncle Robert and cousin Tom as one of the three who run the family business. She earned her spurs in 1987 by founding a new chain of luxury old folks homes, Classic Residence by Hyatt, which is still a market leader.

Conduct of the family business was kept strictly private until Jay Pritzker died in 1999. Then the feuding broke out. By this time, there were 11 branches of the family, and some resented the rule of  Robert, Penny and Tom, and they want to get their assets in cash.

Things turned ugly when cousins of Penny's, the youngest children of Robert, discovered they had had been cut out of the money; their father, annoyed by divorce from their mother, had secretly transferred their share to the family charitable trust.

There was a lot of unwelcome publicity when the niece and nephew sued, because the niece, Liesel Pritzker, turned out to be the Liesel Matthews who had starred as a teenager in the Hollywood movies A Little Princess and Air Force One. They won their claim and the judge gave them back $560m.

Chicago has been entertained by stories of dynastic dysfunction ever since. Penny made more headlines when she bought and ran Chicago's Superior Bank, which went bust making sub-prime loans in the precursor to today's financial meltdown. When federal regulators investigated, the family agreed to 'infuse' the bank with $460m from their own funds.

Obama will be well aware that there is no such thing as a free lunch in Chicago politics. The Pritzkers have done a lot for the new president, and now the question is, what can he do for them? Something to do with foreign policy is the hot tip back on the Gold Coast.

The Pritzkers have always been major supporters of Israel. After the Six Day War, the family built the Hyatt Regency hotel in east Jerusalem, and in his early days as an Illinois senator, Obama co-sponsored an amendment to the Illinois Pension Code allowing the state to make loans to Israel.

So, is it an embassy for Penny Pritzker?

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