If Obama's For Real on the Sub-Prime Crisis, He'll Dump His Campaign Finance Chair

Democratic presidential contender Barack Obama says he'll crack down on fraudulent sub-prime lenders. If he really means it he can start by firing his campaign finance chair, Penny Pritzker. Before taking over Obama's campaign finances, she headed up the borderline shady and failed Superior Bank. It collapsed in 2002. The bank's sordid story and its abominable role in fueling the sub-prime crisis are well known and documented. It engaged in deceptive and faulty lending, questionable accounting practices, and charged hidden fees. It did it with the sleepy-eyed see-no-evil oversight of federal. It made thousands of dubious loans to mostly poor, strapped homeowners. A disproportionate number of them were minority.

Obama's home state, Illinois, ranked near the top of thee states in the percentage of sub-prime mortgages. Nearly 15 percent of home loans were sub-prime according to the Mortgage Bankers Association. But that only tells part of the tale. According to the Woodstock Institute, a Chicago non-profit that studies housing issues, the sub-prime fall-out was far higher in the predominantly black and Latino neighborhoods of South and Southwest Chicago.

The predictable happened when many of those lost their homes. When the bank collapsed Pritzker and bank officials skipped away with their profits and reputations intact. Aside from the financial and personal misery sub prime lenders caused the thousands of distressed homeowners, sub-prime lending has been a major cause of the housing crisis in many areas, and has dealt a sledgehammer blow to the economy. Obama has said nothing about Pritzker, Superior Bank, or their dubious practices.

Instead, there was a touching, even teary eyed photo op, moment during one of Obama's Texas campaign swings. There was Obama talking to a group of San Antonio residents and lambasting the CEO of a sub-prime lender for greedily snatching at a $100 million buy out package while thousands of home borrowers that his company snookered into loans at below market rates faced foreclosure or the threat of foreclosure.

The problem with the staged scene in Texas and Obama's words to the residents is that he left a couple of things out. One is Pritzker's name. He's also been mum on what the bank that she once headed up did.

Other than Obama's quip about the greedy sub-prime lender CEO to San Antonio residents, a Google search found no Obama statement on Superior Bank, no detailed statement on the sub-prime crisis, or what he did as Illinois legislator to deal with the crisis helped along by his finance chair's bank. There was a length list of topics on Obama's official campaign website that detailed the candidate's position on everything from the environment to the Iraq war. Yet there's not one sub-topic on housing, or the sub prime crisis on his campaign website.

Obama has not publicly called for a moratorium on lending, or tough civil and criminal penalties for lenders that engage in deceptive lending practices, or called for an interest rate freeze. Former Democratic presidential contender John Edwards and Clinton called for a moratorium, and providing generous aid to strapped homebuyers face with foreclosure. Obama's rescue plan has been roundly criticized as tepid, cautious and not much better than what Bush has called for to deal with the crisis.

Obama blew off questions about Pritzker and the Superior Bank fiasco with the terse (through a spokesperson) quip that he'd crack down on fraudulent lenders. So again, the two ways he can prove that he means business is to dump Pritzker as his finance chair and then retool his campaign pledge to support a full moratorium on sub-prime lending, tighter regulatory oversight over lending practices, and debt relief for the thousands of homeowners that have already gotten the boot from their homes. Obama boosters will try to muddy the water by fingering Pritzker's brother, Jay Robert Pritzker, who heads up a campaign committee for Hillary Clinton. That's irrelevant. Jay Robert did not head up Superior Bank when it ran roughshod over homeowners in Illinois and nationally. He does not head up Clinton's campaign finance committee. The campaign committee he started is one of dozens of Clinton campaign committees that operate in many states.

Obama's message is one of hope and especially change. He can prove it by changing his finance chair, and doing it now. And then telling the public what he will do to stop bank's like the one his financial point person headed from bleeding needy and desperate home buyers dry.

Earl Ofari Hutchinson is an author and political analyst. His forthcoming book is The Ethnic Presidency: How Race Decides the Race to the White House (Middle Passage Press, February 2008).

Comments

[BarnabyDinges]

These anti-capitalists rants and posts make me nostalgic for my college years. But in the present day they seem wildly unfair and certainly do a disservice to the fine corporate and charitable work of Penny Pritzker and her family. Is this what happens when a successful woman enters public service? Apparently it's all about scorched earth campaigning -- trying to drive good people out of the process -- and not the truth. No wonder so many Americans are turned off by politics.

The fact is, Penny Pritzker left her position as chairman of the board of Superior Bank 14 YEARS AGO, and years before there were any questions about the work of its managers and auditors. The Pritzker family lost millions by investing in the bank. The roughly 1,400 bank customers who had more than $100,000 in deposits are substantially whole.

The activities of Superior Bank in the mid-90's have no bearing whatsoever on current mortgage and lending conditions affecting the US economy. This is old news being manipulated by people who have agendas. The Pritzker family has done more to help Chicago than any family I know. They shouldn't be driven out of politics by the shock and awe tactics of mean-spirited and mostly anonymous bloggers.

As a former investigative reporter in Chicago, I’d say these old stories were thinly reported and agenda-driven back in 2001 … and carry even less weight in 2008.

[argeec]

Good for you, Earl - keep em coming!

[joebaggadonuts]

The real value of this article is to point out that we don't have a plan by any candidate which has a chance of saving us from the liquidity crisis. In any event, I want a change of regime. Whichever candidate is most likely to change things the most toward making citizens run their own country is the one I want. Simple as that.

[Independent voter]

Perhaps we should wait until Senator Obama wins the presidency before we get our panties in a knot over who his tempoirary advisor is.

Cabinet members are much more important and longer lasting.

[DBriz]

I would question this article. It sounds like it is trying to be an investigative piece but is just a bunch of Google searches and assumptions.

Isn’t journalism in my opinion.

[Halsey]

Earl...now I have to google Pritzker..­.way back..in the 80's..ther­e was a family of Pritzkers.­.who were into the whole Greenmail.­.LBO..mess that gave us THAT recession.­..any familial ties..?


I AM an Obama supporter.­.but yes...this is troubling.­..she's got to go...

[ifreez]

Fellow democrats are getting real ugly now.
I hope if Hillary loses she will drop out quick, because this party is going to crap, and I mean fast!
And if Obama goes on a losing streak, I hope he drops out fast too, because now we are hating one another, and more specifically, giving the republicans more, and more talking points everyday.

[Waldimore]

OOPS! There it is........­......!!!!­!!!!

[seepee]

The Obamabots can not stomach a different view point –
They resort o vile hatful insults – where’s the HOPE, LOVE and PEACE
Shades of religious zealots that slash and burn in the name of god!!

[ForwardtoYesterday]

Where are these hateful comments? Accusing people who make skeptical statements of "hateful comments" is, itself, making a hateful comment. Very few Obama supporters spend their days throwing insults at Hillary supporters, yet there seem to be a bunch of you whose only job is to spread the "Obama followers are like Indian thuggees" meme. Why?

[moevaughn]

Thank you, Mr. Hutchinson!

Part of Sen. Obama's plan to deal with foreclosure crisis is to offer a five hundred dollar tax rebate to those in danger of losing their homes!! Do you really think a $500 rebate will prevent someone in danger of foreclosure from losing their home?!

Not surprising his chief economics advisor hails from U. Chicago Friedman School of Thought. Everyone must read Naomi Klein's Shock Doctrine for the history of U. Chicago Economics.

[Kordo]

If you signed a mortgage (did i spell that right?) without reading the fine print, then I'm sorry, but your're an idiot. I remember an old ditty, something fools and their money, and how easy it is to part them....

[tbone99]

The big print giveth and the small print taketh away.

[cheforacle]

Eart, I am an Obama supporter that has been very critical of your consistently anti-Obama posts. In this case, however, you are probably correct. He should get rid of Pritzker because of her past position. As an Obama supporter, I've never considered him perfect and still don't expect him to always be such.

That being said, I must laugh that you never miss an opportunity to slam Obama when there is the smallest of chances. Your problem is that you have such a big chip on your shoulder. You are very worried that, if Obama won, you would lose the opportunity to believe that this country is as racist as you believe it to be. You would lose the opportunity to believe that this country is as unfair as you believe it is.

[Savanarola]

Earl"- The whiny pattern of victim politics extends now to commercial deals. Thirty years ago, there was a crusade against lenders who red-lined or would not lend to minorities. When people began to misrepresent their incomes knowingly, bank loans to minorities increased. I guess your new threshold of guilt by association will required that Obama do a FBI check on every voter who supports him...BTW the term "predatory lending" is redundant so buyers have to beware anytime they get loans for something they cannot afford or can't save for.

[handyallen1]

hear no evil, see no evil, speak no evil

[MariaHopeful]

Earl Hutchinson, go get a life. You have made it your business to be a negative thorn in Obama's side. Why don't you go be some-one's rose instead.

Maria Hussein

[LarBear]

From Debate (2/ 26/2008)
SEN. CLINTON: But I also have heard Senator Obama refer continually to Afghanistan, and he references being on the Foreign Relations Committee. He chairs the Subcommittee on Europe. It has jurisdiction over NATO. NATO is critical to our mission in Afghanistan. He's held not one substantive hearing to do oversight, to figure out what we can do to actually have a stronger presence with NATO in Afghanistan.
RUSSERT: Senator Obama, I want you to respond to not holding oversight for your subcommittee. But also, do you reserve a right as American president to go back into Iraq once you have withdrawn with sizable troops in order to quell any kind of insurrection or civil war?
OBAMA: Well, first of all, I became chairman of this committee at the beginning of this campaign, at the beginning of 2007. So, it is true that we haven't had oversight hearings on Afghanistan.
* NOTE: Some NATO Countries are NOT fulfilling their obligation­... Most of the Troops fighting in Afghanistan (including NATO Troops) are American..­.
Barack runs for President his first term in US Senate... (Videotape, January 22, 2006): MR. RUSSERT: When we talked back in November of "04, after your election, I said, "There"s been enormous speculation about your political future. Will you serve your full six-year term as a United States senator from Illinois?" Obama: "Absolutel­y." It's about a Test of Character and Integrity ....... Clearly, Barack puts his political ambition ahead of his State, Country and Troops.... Character/ Integrity TEST = Failed... At least 3 times Barack's Campaign has played the Race Card, when NO mention of Race, or skin color was made... Character/ Integrity TEST = Failed... Michelle said people with black skin need to wake up and Vote for the first BLACK President.­.. Oprah Campaigned for the First BLACK President.­.. The Obama Campaign has made direct appeals to Race and Skin Color... In Nevada, Barack himself said the Rules for Caucusing clearly favored him... Character/ Integrity TEST = Failed...

[writeonbro]

I think "The Earl of Hutchinson" is off base with his idea that having Penny Pritzker on Obama's team is guilt by associatio­n.Why shouldn't he avail himself to someone with her financial expertise? I am sure Obama would have gladly chosen a dream team of saints, if they existed. Anyone can make a mistake and throwing the baby out with the bathwater has never been a good idea.

Don't forget that supporters of Senator Obama come from every walk of life the poor, the downtrodden, and the rich, have come together on one accord, to create change.

Expect Obama to make some mistakes on his way to the White House and as a President. It's part of the human condition called life.

Surley, "The Earl" is just as wrong about this as he was when he wrote,"Oprah can't help Barack Obama nail Hillary Clinton in Iowa, New Hampshire, or even South Carolina."

http://www.huffingtonpost.com/earl-ofari-hutchinson/oprah-cant-help-obama-na_b_75786.html

[JoseyJ]

Obama had GOOD judgment when he wasn't in the senate - and couldn't vote.

But Obama's judgment CHANGED when he got to the Senate - as he remained silent on the war and supported Bush's war funding bills for 2 years.

Sen. Oblahma also knowingly transacted a house deal with a man under federal investigation - while Obama was plotting his prez run.

And Obama selected a campaign finance chair who helped cause financial ruin for thousands of families.
Obama saw nothing wrong with the Rezko deal or the finance chair because that's the norm in Chicago politics.