President Obama and Penny Pritzker
President Obama has nominated Chicago billionaire Penny Pritzker to lead the U.S. Department of Commerce, and her ongoing Senate confirmation is not expected to meet any major hurdles. This nomination, however, should be alarming to Americans who value transparency and integrity in financial transactions.Pritzker belongs to the family that founded the Hyatt Hotels chain, and published reports show the family has a history of hiding massive amounts of money in offshore tax shelters and even deceiving family members about the contents of trust funds.
If that sounds familiar to Legal Schnauzer readers, it's because the Pritzkers apparently studied at the same school of financial skulduggery as the Atlanta-based Rollins clan, the folks behind Orkin Pest Control and the subject of numerous posts growing from the controversial Rollins v. Rollins divorce case here in Alabama.
The similarities become eerie when you consider the experience of Liesel Pritzker, who filed a $6-billion lawsuit at age 18, claiming that her father and 11 older cousins had looted her trust funds and those of her older brother, Matthew. The Pritzker lawsuit, launched in 2002, was settled in 2005, with Liesel and her brother receiving a settlement that totaled $900 million.
Liesel Pritzker, under the name Liesel Matthews, was a child actress who starred in such films as A Little Princess, Air Force One, and Blast. She left the entertainment field and co-founded the IDP Foundation in 2008.
Her story mirrors that of the younger generation in the Rollins family. A pending lawsuit in Georgia alleges that Randall and Gary Rollins, heads of Rollins Inc. (the parent company of Orkin and other enterprises), raided family trust funds for their own benefit. A recent appellate ruling found that the case brought by four of Gary Rollins' children should be heard by a jury.
Sarah Rollins, who now is 19 and grew up in Birmingham with her mother Sherry and younger sister Emma, apparently is the beneficiary of a trust fund established by her grandfather, John Rollins Sr. But Sarah's father, Campus Crest Community CEO Ted Rollins, has kept his daughter and ex wife in the dark about the fund--even though the law in most states requires that, at age 18, beneficiaries are entitled to be informed about provisions of trust accounts.
Are Ted Rollins and other family patriarchs using Sarah Rollins' money for their own benefit, without her knowledge or consent? That appears to be a distinct possibility. A curious car crash, which coincided with Sarah Rollins' visit to Birmingham and left Sherry Rollins with a number of injuries, adds to the intrigue.
Liesel Pritzker
As for Obama and the Commerce Department, what kind of secretary would Americans be getting with Penny Pritzker. Rick Perlstein, of The Nation, paints a grim picture in a recent two-part series. (See "Penny Pritzker's Commerce [Part One]" and "Penny Pritzker's Commerce [Part Two].") Perlstein describes the Pritzker business motto as "cash for quiet." From Part One of Perlstein's piece:In 1982, for instance, when The Kansas City Times published an investigation of family finances after the collapse of a skywalk at a Kansas City Hyatt killed 114, they discovered that the family’s casino purchases beginning in 1959 were funded by $54 million in loans from the notorious mob-connected Teamsters Pension Fund, without telling stockholders as the law required. (The family agreed to a consent decree that allowed them to neither admit nor deny the allegations—shades of Superior Bank). The paper also quoted an IRS informant, a vice president of the offshore bank where the family stashed their cash: “The Pritzker family of Chicago through their Hyatt Corp. initially received their backing from organized crime.” According to the reporter who won a Pulitzer for the series, Knut Royce, Jay Pritzker’s initial response was to try to buy the newspaper. Failing that, he arranged a private takeover of Hyatt, the family’s one company that has ever been public, so it never would have to file information with the Securities ad Exchange Commission again.
Perlstein also provides a nice summation of the Liesel Pritzker case:
This family is famously secretive. In 2003 two family scions, siblings Liesel and Matthew Pritzker, sued their father Robert Pritzker for $6 billion, claiming he had looted their trust fund. In 2004, a judge gave them access to sealed financial reports. Explained investigating reporter Gus Russo, “that unearthed a secret family deal cut after Liesel’s uncle Jay Pritzker’s death in 1999, a plan that would have broken up the fortune into eleven shares valued at $1.4 billion each. In early 2005, rather than expose the complicated Pritzker offshore shelters to the light of day, the Pritzker family put the final touches on a private settlement agreement” giving Liesel and Matthew Pritzker upwards of $500 million each to drop the case.
We now have some idea about why the Pritzker family, of Chicago, has kept its financial dealings in the shadows. But what about the Rollins family, of Atlanta--with a branch in Delaware that largely is responsible for Dover Downs Gaming and Entertainment, plus Rollins Jamaica Ltd? What is driving the older generation to take liberties with funds that belong to the younger generation?
The pending lawsuit in Georgia might soon provide some answers. And we might learn even more if Sarah Rollins someday pulls a Liesel Pritzker and takes legal action to find out what her father and other patriarchs have done with her money.
