Nomination of Hyatt heiress and Democratic fundraiser likely to upset unions who oppose hotel giant's treatment of workers
Barack Obama made a controversial choice as commerce secretary Thursday when he nominated top fundraiser and Hyatt hotel heiress Penny Pritzker, in spite of her long-running dispute with unions over workplace conditions and school closures.
Pritzker is the latest in a long line of friends and supporters from the president's hometown of Chicago that he has rewarded since taking office in 2009, among them former chief of staff Rahm Emanuel, now Chicago's mayor. The appointments have led to accusations of cronyism.
Obama, urging speedy confirmation of the appointment by the Senate, portrayed Pritzker as pro-worker. Pritzker was by his side along with long-time aide Mike Froman, the deputy national security adviser on international economics whom he nominated as a US trade representative.
Speaking in the Rose Garden before heading for Mexico, Obama said: "She [Pritzker] knows that what we can do is to give every business and every worker the best possible chance to succeed by making America a magnet for good jobs."
But this portrait is hotly disputed by unions who lambasted her over conditions of workers in the Hyatt hotel chain, on whose board she sits.
The hotel workers union Unite has campaigned against Hyatt and targeted board members in the past, organising a boycott through its Hyatt Hurts campaign. She has also been criticised for her role on the Chicago Board of Education.
Kristine Mayle, financial secretary of the Chicago Teachers Union, called Pritzker's appointment "deeply disappointing".
Pritzker resigned from the board in March after overseeing what is believed to be the largest school closing programme in US history. "I can only hope she does a better in this position than she had done for the children of Chicago," said Mayle.
Chicago is planning to shut 54 schools in a move that will hit 47,000 children, 88% of them African American. The closures have sparked huge protests. "It just shows if you donate enough money, everything is fine," said Mayle.
Pritzker joins others from Chicago who have served – or are still serving – in the Obama administration. They include: Valerie Jarrett, a White House adviser; Arne Duncan, education secretary; former White House adviser David Axelrod; and Austan Goolsbee, who was in Obama's first cabinet as chairman of the council of economic advisers.
Chicago businessman Louis Susman was a big Obama fundraiser and was rewarded with an ambassadorship to London.
Pritzker helped fund Obama's early political career and then ran the mammoth fundraising operation for his 2008 White House run, bringing in millions of dollars. Although less prominent in the 2012 campaign, she is estimated to have given him $117,000 and been a top bundler, bringing in $500,000. She also donated $250,000 towards the costs of January inauguration.
"There is not a lot of love for her here," said Mayle. She said many of the children affected by the school closures had family working for Hyatt. "She is not known for being a good employer," she said.
Pritzker, if confirmed by the Senate, would be one of the few women in a predominantly male cabinet. She would also be the richest, with an estimated wealth of $1.8bn, ranking 277th in Forbes 400 list.
There was strong speculation in 2008 that she would be appointed to commerce, but she said at the time she was not putting her name forward for family reasons. At the time, the Pritzker family was involved in a long-running dispute with the IRS over overseas tax holdings, and also ownership of a bank involved in the sub-prime scandal, both of which would have made any appointment problematic.
Obama, in his Rose Garden statement, said: "Penny is one of our country's most distinguished business leaders. She's got more than 25 years of management experience in industries including real estate, finance, and hospitality. She's built companies from the ground up. She knows from experience that no government programme alone can take the place of a great entrepreneur."
He added: "And Penny understands that just as great companies strengthen the community around them, strong communities and skilled workers also help companies thrive. So she's been an extraordinary civic leader in our shared hometown of Chicago."
He noted it was her birthday – she turned 54 – and joked that as a present she now faced a confirmation hearing.
Unions have a mixed attitude towards the Obama administration. The unions invested large amounts of money and provided volunteers for the 2008 and 2012 White House campaigns. Although there is disappointment over what they feel is the failure of the Obama administration to do as much for them as they had hoped, they acknowledge they have secured some concessions and that a Democratic White House is more favourable for them than a Republican one.
In spite of the outspoken response of Mayle, the unions have largely reined in criticism of Pritzker.
Unite, in a statement, was relatively muted in its response. "Today, it was announced that President Barack Obama will nominate Penny Pritzker to be commerce secretary, a role that requires a serious focus on the challenge of helping workers achieve full-time jobs with decent wages and safe working conditions."
Anticipating her stepping down from the Hyatt board, it called for her to be replaced by a hotel worker.
The commerce job has been vacant since John Bryson resigned after he suffered a seizure that led to two car crashes.