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Is Obama Ready for a Billionaire in His Cabinet?

Penny Pritzker
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Penny Pritzker

Penny Pritzker has always been comfortable wearing many hats: CEO, mom, entrepreneur, arts patron and major fundraiser for Barack Obama.

But there is one title that she accepts only reluctantly: billionaire.

"She really doesn't like when people call her that—especially in the media," said one of Pritzker's friends. "It's the B-word for her."

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The question now is whether her billionaire status will sit well with the White House. News reports say Pritzker is leading the race for commerce secretary. If chosen, she would be the far and away the wealthiest member of Obama cabinet—and one of the richest presidential cabinet members in history.

Forbes puts Pritzker's wealth—which stems from the Hyatt hotel chain and other assets—at $1.8 billion. Yet the family's offshore accounts and complex holding structures make it difficult to truly determine her wealth. The Pritzkers have sold off many of their assets to settle a family financial battle and took Hyatt public in 2009. She founded Classic Residence by Hyatt and was chairman of Parking Spot— an owner of parking properties—which was sold to a private equity firm in 2011 for $360 million.

Pritzker has known the president since the early 1990s, when her son and daughter played in a summer basketball league in Chicago coached by Michelle Obama's brother. She was Obama's finance chair in 2008, helping him raise hundreds of millions of dollars, in part from wealthy donors (she was less involved in the 2012 campaign). After Obama was elected, she helped lead White House Skills for America's Future initiative, which seeks to better match worker skills with jobs.

Advisers say Pritzker's closeness with the president will serve her and the Commerce Department well.

"There's no question that she's trusted by the president, and she's given very good input and advice in whatever she's been asked to do," said Austan Goolsbee, the former chairman of Obama's Council of Economic Advisers. He added that if she's appointed, Pritzker will also help dampen criticism that the Obama White House lacks private sector expertise.

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Yet unions and other groups have criticized Pritzker for er family's businesses. And it remains to be seen whether someone of such wealth and varied businesses can hold sway in a White House with few former CEOs or business leaders. The president attacked Mitt Romney repeatedly in the 2012 campaign for his wealth and overseas accounts.

UNITE HERE, a union representing hotel workers, called for a boycott of Hyatt hotels last year over workplace conditions. Pritzker also faced criticism in the past over Superior Bank, a failed bank partly owned by the family and that had to pay a $460 million to regulators in a settlement over subprime lending.

These criticisms helped scuttle her bid to become commerce secretary in 2008, though people close to Pritzker say this is a new day.

"I think those issues are behind us," said one of her friends. "It's really a different climate now."