March 15, 2013
Billionaire Chicago businesswoman Penny Pritzker resigned from the Chicago Board of Education on Thursday.
A spokeswoman for Pritzker declined to provide a reason for the resignation. Pritzker is being vetted as a potential candidate for U.S. Commerce secretary, sources have told the Chicago Tribune.
An appointment to that post would require her to step down from many roles, including the school board.
While the resignation increases speculation that Pritzker, a top fundraiser for President Barack Obama, will be nominated for a federal position, there is no assurance her candidacy will move forward. The cabinet post requires Senate confirmation, and a Pritzker nomination likely would face opposition from critics.
Pritzker is a board member of Chicago-based Hyatt Hotels Corp., which was founded by her family, and is embroiled in a long-running dispute with its hospitality workers' union in Chicago and several other cities.
White House officials have acknowledged that Pritzker is under consideration for the Commerce job, but opposition, particularly from labor unions, has been strong, according to union officials and Democrats familiar with the nomination process.
Pritzker withdrew from consideration for the Commerce post four years ago because of family obligations. She was overseeing billions in assets for one of the richest families in the country during the peak of the financial crisis.
Pritzker's resignation letter to Mayor Rahm Emanuel does not refer to the potential Cabinet position. "I want to thank you for giving me the opportunity to serve the city of Chicago, its children and families, during these last two years," Pritzker wrote. "Education is critical to ensuring every child has an opportunity to succeed, and I wholeheartedly support the work that you are doing to improve Chicago schools."
The family recently concluded a 10-year process of selling off businesses and real estate holdings and dividing up the proceeds among cousins. The end of the so-called family agreement has left participating cousins with more than $1 billion. Pritzker is worth an estimated $1.85 billion, putting her at No. 825 on Forbes' list of the world's richest.
In a statement, Emanuel said: "Throughout (Pritzker's) career she has been a champion for Chicago and our students, a true leader in her every business, civic and philanthropic endeavor. I thank her for her tireless service to our students and our schools and I know she will continue to be an advocate for our city's bright future."
A spokeswoman for Emanuel said the mayor is in the process of filling Pritzker's spot.
Pritzker's spokeswoman, Susan Anderson, said that Pritzker and her husband, Bryan Traubert, will continue funding Chicago education initiatives, including construction of athletic fields and Chicago Run, a nonprofit that supports physical fitness in schools.
If Pritzker receives a federal appointment, her resignation from the school board is among the first of many changes she will need to make. She likely will have to step down from Hyatt's board as well as divest some of her assets and sign an ethics agreement similar to one signed by new Secretary of State John Kerry. Kerry was among the wealthiest members of the U.S. Senate.
That would leave several potentially contentious issues, including her family's use of overseas tax shelters and its oversight of Hinsdale-based Superior Bank, which failed in 2001. Unions, which have focused on the Hyatt issue, are among her most vocal critics.
"We know Penny Pritzker has a long and storied history as an anti-labor and anti-worker kind of boss," said Kristine Mayle, financial secretary of the Chicago Teachers Union. "Her policies adversely affect working families. She has worked to close schools and destabilize neighborhoods, and we hope she does a better job in her new position, if she gets it."
Although Pritzker was not the president or vice president of the board of education, she had a great deal of influence. She was often the first board member briefed on policy, according to schedules for former schools CEO Jean-Claude Brizard and current CEO Barbara Byrd-Bennett.
Attacks from the teachers union have included a cartoon mocking her and other city education reformers, and rallies inside and outside downtown Hyatt hotels.
While Hyatt and its hospitality workers' union, Unite Here, have reached deals in several cities in recent days, there has been no agreement in Chicago, Los Angeles and two other locations. Housekeepers and other Hyatt workers in Chicago have not had raises in years.
Pritzker's cousin, Thomas Pritzker, is chairman of Hyatt's board. But her public roles as a school board member and top Obama adviser have caused the spotlight to fall on her.
After Obama's 2008 election, Penny Pritzker joined two White House councils that focused on the economy.
In the 1980s, she graduated from Stanford University with a law degree and an MBA and rose through the ranks of her family business.
She soon assumed responsibility for the family's non-Hyatt real estate holdings. She expanded them to include senior living facilities, now held under the Vi brand; the Hyatt Center in downtown Chicago; residential developments; and an off-site airport parking company. Most of these holdings have been sold, pursuant to the family agreement.
According to friends, the constant criticism from labor unions has upset Pritzker, but it has not stopped her from wanting to take a role in the Obama administration.
"She likes to contribute at the intersection of business and politics," Greg Brown, chief executive of Motorola Solutions Inc., told the Tribune last month. "People like things they may not be good at. Penny happens to like it and can add value."
Tribune reporter Noreen Ahmed-Ullah contributed.
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