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EXCLUSIVE: Big donors dominate Obama panel
The election appeals master, Kenneth Conboy, a former federal judge, said in a 72-page report that Mr. Davis also asked Mr. Trumka to raise an additional $50,000 for the Carey campaign and that “Mr. Carey was agitated that Mr. Trumka had not yet provided the $50,000 that he had agreed to raise.”
The report also said that Mr. Carey’s campaign manager, Jere Nash, who also pleaded guilty in the case, testified Mr. Carey thought “it was unreasonable that Mr. Trumka was taking so long to provide his contribution because Mr. Carey, as general president of the [Teamsters], had helped Mr. Trumka get elected secretary-treasurer of the AFL-CIO.”
According to the report, Mr. Trumka eventually raised the money, which was “funneled into the Carey campaign.”
“Mr. Trumka was subpoenaed by my office, but refused to testify, asserting his Fifth Amendment right against self-incrimination,” the judge wrote.
Another member of Mr. Obama’s advisory board is Penny Pritzker, chairwoman of Classic Residence by Hyatt, a chain of luxury senior living communities. Listed among Forbes magazine’s 2008 richest Americans with a net worth of $2 billion, she served as the campaign finance chairwoman for Mr. Obama and was one of his bundlers, personally raising $200,000.
Ms. Pritzker saw her Chicago-area bank shut down after it pursued a failed strategy of subprime loans. The Office of Thrift Supervision, a Treasury Department agency that regulates federal savings associations, closed Superior Bank and its 18 branch offices in July 2001, after the Federal Deposit Insurance Corp. said its financial condition had “rapidly deteriorated” and its management was “unable to resolve existing problems.”
A 2002 FDIC report said the bank “paid dividends and other financial benefits without regard to the deteriorating financial and operating condition of Superior.” It said the bank’s high-risk business strategy focused on the generation of significant volumes of subprime mortgage loans for securitization and sale in the secondary market.
Her attorney, Kevin Poorman, said Ms. Pritzker had stepped down from day-to-day management before the closure for a role on its parent company’s board of directors, but confirmed she did write a letter as late as May 2001 urging the bank to make an expanded push into subprime loans in an effort to save itself.
Critics have cited that letter as evidence of Ms. Pritzker’s continuing stewardship of the bank and her advocacy for a subprime lending practice that Mr. Obama has criticized. In the letter, Ms. Pritzker wrote that her family was recapitalizing the bank and pledged to “once again restore Superior’s leadership position in subprime lending.” The bank was shut down two months later.
Superior was one of the first banks in the 1990s to turn to the emerging practice of subprime lending, where loans are targeted to high-risk borrowers at higher interest rates. A dramatic rise in those defaults and foreclosures is blamed, in part, for the recent financial crisis.
Barbara Casey, a spokeswoman for Ms. Pritzker, said Mr. Obama had sought experienced business people for the board and “certainly Penny is a proven business leader.” Ms. Casey said Ms. Pritzker chaired four businesses, three of which she founded.
Obama spokesmen have not disputed her advocacy of subprime lending as the bank was failing but said she was “never accused of any wrongdoing nor did she receive compensation in relation to the closing of Superior Bank.”
They noted that instead of “walking away as millions of homeowners and stockholders suffered, the Pritzker family entered into a voluntary settlement and agreed to pay the government” $460 million that the bank cost taxpayers over 15 years to defray its losses.
Nonetheless, about 1,400 underinsured Superior Bank depositors ultimately were paid the FDIC-guaranteed insured amount of $100,000 but are still out of pocket a total of about $18 million.
Ms. Pritzker and two other advisory board members - Robert Wolf, president and chief operating officer for UBS Investment Bank and chairman and chief executive officer for UBS Group for the Americas, and Mark Gallogly, director of Dana Holding Corp. - are listed as bundlers for the Obama campaign, meaning they pledged to personally gather a large number of campaign contributions from political action committees and individual contributors for his presidential campaign.
About the Author
Jerry Seper is the investigative editor for The Washington Times.
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