Pritzker Understated Income, Files Amended Disclosure
Chicago billionaire Penny Pritzker inadvertently understated a portion of her income by at least $80 million in a disclosure form required for her nomination to be U.S. Commerce secretary and has amended the document.
Forms released online last night by the Office of Government Ethics show that Pritzker earned additional income for consulting work on hundreds of trusts, including family trusts, beyond what she disclosed last week. The omission, discovered by Pritzker’s financial advisers, was due to a clerical error, said Susan Anderson, the nominee’s spokeswoman.
“It is a substantial amount and we moved to correct the mistake as soon as it was discovered,” Anderson said in an e-mailed statement.
Documents released last week show Pritzker received $32.2 million for a decade’s worth of consulting on the restructuring of domestic trusts. The filings released yesterday show she earned at least $80 million for that work, according to Bloomberg’s compilation of the data. The revised total is in addition to the amount reported last week, according to Anderson.
Pritzker, whose family founded Hyatt Hotels Corp., is scheduled to testify on her nomination before the Senate Commerce Committee tomorrow. She disclosed last week that she earned $54 million in consulting fees last year for a similar restructuring of trusts based in the Bahamas, also over 10 years. The Bahamas’ income wasn’t changed in the amended disclosure document.
The nominee is worth more than $1.5 billion, according to estimates from the Bloomberg Billionaires Index. If confirmed, she would be among the wealthiest Cabinet officials in U.S. history.
The income in Pritzker’s amended filing includes some in-kind fees, the equity interests of which had already been listed in her original disclosure forms, according to Anderson.
“Ms. Pritzker was engaged by the U.S. trustee of trusts for the extended Pritzker family for advice on restructuring trust investments for the purpose of dividing assets along individual family lines,” Anderson said. They included investments in Hyatt, Marmon Holdings Inc., Union Tank Car Co. and non-hotel real estate investments including the Hyatt Center office tower in Chicago, she said.
Marmon and Union Tank, both based in Chicago, are units of Warren Buffett’s Berkshire Hathaway Inc.
Pritzker provided advice on the restructuring, management and, in some cases, sale of the assets, Anderson said. The trustee sought her services because of her business background and knowledge about the trusts’ investments, she said.
“The fee reflects 10 years of service and all applicable taxes have been paid,” Anderson said.
Pritzker, chairman of Pritzker Realty Group LLC, is a former non-executive chairman of TransUnion Corp. and is a Hyatt board member. She has said she will give up her board position with the hotel company if confirmed.
Senators on the committee that will consider the nomination said the amended disclosure won’t have much sway in a confirmation that may pivot more on issues such as her role in 2001 collapse of Superior Bank in Illinois.
“She has a fair amount of wealth, so those things can be complicated to fill out,” said Senator Ron Johnson, a Wisconsin Republican who was elected in 2010 with backing by the Tea Party. He said Pritzker made a positive impression on him during a recent one-on-one meeting, although he said he still needs to hear her responses to questions about the bank and other matters before he decides how he’ll vote.
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