Penny Pritzker served on board of failed Chicago bank

May 2, 2013 4:24:30 PM PDT
As Penny Pritzker stood in the rose garden, Elizabeth Grabill thought of her late father and the $100,000 he lost that he earned brick by brick.

"He was a bricklayer and worked very hard, and he could have traveled," said Elizabeth Grabill, daughter of a bank depositor. "It was retirement money."

Jerry Grabill was one of hundreds of Superior Bank customers that lost millions collectively when the bank failed in 2001.

Deposits were insured up to $100,000, but Grabill had twice that amount in savings.

"He had put all this money away for us," said Elizabeth Grabill. "When you lose that kind of money, you get bitter."

The Pritzker family owned half of Superior Bank which, according to federal regulators, failed because of its involvement with risky subprime mortgage loans - instruments that would help crash the economy years later.

"Many people say this was the first domino of the subprime debacle that we're all suffering through," said Clint Krislov, an attorney who represented bank depositors.

Attorney Clint Krislov filed a lawsuit on behalf of depositors after the Pritzkers agreed to pay a record $460 million to the federal government to settle its stake in the failed bank.

But that payment was less than the $645 million the Pritzers reaped in tax benefits through its ownership of the bank.

"They came out, as I calculate it, about $200 million ahead," said Krislov. "They are the only ones who made a multi-hundred million dollar profit on a failed bank."

The Pritzkers would also receive another $20 million after its accountant, Ernst & Young, also settled with the government.

None of that money, according to Krislov, was shared with its customers.

Today, prominent democrats came to Pritzker's defense.

"Did she act, and did her family act, in a responsible fashion?" said U.S. Senator Dick Durban (D-Ill.). "And I think the answer is going to be absolutely yes. I don't know what her involvement was in terms of whether she had any management responsibilities or any authority for decisions, but it's going to be asked, and it should be."


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