Obama’s latest nominee for Commerce Secretary, Penny Pritzker, has a tough confirmation process ahead of her. Not only because of the billionaire heiress’s 184-page financial disclosure information, in contrast to the 8-page report submitted by Transportation Secretary nominee Anthony Foxx, but also because of what her nomination represents. Just months after bashing Mitt Romney for keeping money overseas, Obama has for the second time this year nominated to a cabinet post someone who has their own offshore account.
Senator Charles Grassley, an Iowa Republican, explains that “it isn’t just about her or the offshore stuff, it’s about the fact that the president made a big deal out of Romney’s offshore accounts. You’d think if that’s a big deal for his opponent, then the president of the United States wouldn’t be appointing people who make use of that in his own cabinet. If it’s wrong, it’s wrong.”
For example, the long-time Obama backer and heiress of the Hyatt Hotels empire received $53.6 million in income last year from a trust in the Bahamas for her role as a consultant in the distribution of her family assets and, at the time of the filing, owed between $250,000 and $500,000 on her American Express card. Sen. Grassley added that she was “associated with the kind of tax avoidance activity that the president dismisses as fat cat shenanigans for others. It’s hypocritical to overlook tax avoidance when it’s convenient.”
In 2008, when she was originally considered for the position, Ms. Pritzker explained that most of her wealth, estimated at over $1.5bn, is held domestically and that she has no control on how offshore assets of which she is a trustee are administered.
In the 2012 presidential campaign, Obama and Democrats in Congress pushed Romney to release tax returns from the last 10 years, and ran adds criticizing the candidate for stashing his money in blind trusts invested in tax-favored jurisdictions. However, with the Pritzker nomination, Senate majority leader Harry Reid (D-Nev.) vowed full support from Senate Democrats, and said that “playing politics” would be nothing more than “mindless, knee-jerk” obstructionism by Republicans.
Freshman Republican Sen. Tim Scott warned that Republicans who defended Romney should not flip flop on the issue: “So far, I think of it sort of as a benign nomination at this point. I haven’t found anything that raised my blood pressure yet […] I’m looking at her job qualifications. It’s not illegal to have money in the Cayman Islands.”
In a similar tone, Sen. Jeff Sessions (R-Ala.) added, “This is a huge and important nomination, … and so that nominee will have to prove that they’ve got something to offer other than raising money.” And some Republicans have raised doubt on just that, Pritzker’s qualifications. While many point to her career in business and role as a female business leader, Sen. John McCain said the bigger issue would be her involvement in the 2001 collapse of Superior Bank, in which her family owned a 50% stake and of which she was chairman from 1991 to 1994.
While some may see discussion of Pritzker’s wealth as a political sideshow, it does raise the issue of hypocrisy in an Obama administration that was so critical of Romney’s offshore accounts. Even if Republicans follow the lead of Sen. Tim Scott in looking solely at her job qualifications, Pritzker will still have to prove that she is not only being appointed due to her friendship with Obama and that despite some failed investments, she is the right woman for the job.