By Denise Simon -
The city of “Shitcago” has had a long legacy of corruption and extortion; and it is chock full of RICO activities. Seems the relay race started with Al Capone, and then his baton was picked up by the likes of Daley, Jarrett, and Pritzker… oh yeah, Obama as well? The answer is YES.
Capone was bad enough but he did not use the FDIC, commercial banks, the Federal government, or Fannie and Freddie in his mob activities. But Obama and his friends did, and they still do. It is rather like comparing a game of hop-scotch to Black Ops.
Innocent people died during the Capone Era in Chicago, but under the rule of corrupt power-brokers in Chicago in the over last 30 years, spilling over into 2012, the death of innocents goes beyond loss of life, it reaches to countless innocent citizens and the death of their individual financial security.
The pure definition of financial meltdown of 2008 can be understood with all that is so common in “Shitcago”, pay to play, from campaign donations, community organizing, housing, making a dynamic zoning rule change, loans, mortgages, insurance, real estate, and more.
The gang: Jarrett, Daley, Obama, Pritzker, Miner, Rezko, Auchi and more…
By Neil Munro – Daily Caller
President Barack Obama wants his 2012 re-election campaign to focus on Gov. Mitt Romney’s private-sector record, but his own private-sector history shows that he promoted and profited from the nation’s disastrous real-estate bubble. One striking example comes from the president’s 1995 housing-discrimination class action lawsuit: It provided him with legal fees, greased his political donations and boosted his role in Chicago politics.
While he made personal gains, his lead African-American client, Selma Buycks-Roberson, declared bankruptcy in 2001 — and again in 2008 as she received a home foreclosure notice, according to unpublicized federal and city records obtained by The Daily Caller.
Buycks-Roberson is still likely underwater on her mortgage, owing more to her home lender than the property is worth. Her house has dropped in value by 30 percent since 2010. Its 2011 assessed value for tax purposes was $97,520, well below her 2006 mortgage of $112,400. Meanwhile, the online real-estate database Zillow estimates that home is worth just $69,400 today.
Buycks-Roberson’s story is not an anomaly. It can be found repeatedly throughout Obama’s Chicago. (RELATED: Full coverage of President Obama’s roots in Chicago politics)
By 2012, the average home equity in Chicago’s African-American neighborhoods had shriveled to $6,800, according to a March report from the Woodstock Institute, a liberal Chicago housing advocacy group. The average equity in homes in the city’s white neighborhoods is $108,000.
Fully 44 percent of homes in Chicago are underwater, compared to a national average of 31 percent, according to a Zillow-generated map.
The zip code located five blocks south of Obama’s house at 5046 S. Greenwood Avenue has an underwater-mortgage rate of 56 percent, slightly above Detroit’s famously depressed 55 percent rate. Zillow’s map shows that the wealthier neighborhood just four blocks north of Obama’s has an even more stunning rate of underwater mortgages — 72 percent – one percentage point above that of worst-in-the-nation Las Vegas.
FDIC eases settlement for bankers
A billionaire Chicago family that has donated and raised hundreds of thousands of dollars for President Obama got a deal from the federal government to avoid paying all of a $460 million settlement it agreed to in the 2001 failure of a Chicago-area bank it owned, while 1,400 former depositors are still owed more than $10 million in lost savings.
And now, 11 years later, the prospect that any of the depositors will get their money back is bleak.
The Pritzker family, which made its fortune in hotels and manufacturing, agreed to a $460 million settlement offer in December 2001 to avoid sanctions and civil lawsuits in the failure of Superior Bank in Hinsdale, Ill.
But after paying $316 million of the interest-free debt, the family quietly struck a deal with the Federal Deposit Insurance Corp. (FDIC) in June 2011 to discount the balance in return for paying off the debt early.
“We have been stiffed again,” said Fran Sweet, 67, a depositor still owed $70,000. “It is a lot to lose. We are not wealthy people. We are white-collar and blue-collar workers who saved this money, [or] thought we saved this money.”
John W. Courtney, 67-year-old Vietnam veteran and construction worker still owed $50,000, said, “I worked hard for the money. [The Pritzkers] signed an agreement that got them off the hook, and now they are backpedaling. A deal is a deal. Who gave the FDIC the right to discount the note?”
Ms. Sweet and Mr. Courtney are among 1,400 depositors still owed $10.3 million at the end of March, records show. The FDIC Insurance Fund is still out $296 million after paying off Superior’s insured depositors. It is highly unlikely the remaining depositors or the FDIC will receive much more money since nearly all of the settlement funds have been paid out, according to records and interviews.
“The depositors got nicked coming, going and after the fact,” said Clinton Krislov, a lawyer who represents depositors whose accounts exceeded the $100,000 covered by FDIC insurance. “The depositors have gotten all they will from the Pritzkers.”
The Office of Thrift Supervision (OTS), which regulates federal savings associations, closed Superior and its 18 branch offices on July 27, 2001. The bank failed, the OTS said, because of its aggressive strategy of making high-risk subprime loans to borrowers with troubled credit histories.
At the time, OTS said the bank “suffered from poor lending practices, improper record keeping and accounting, and ineffective board and management supervision.”
Superior was purchased in 1988 for $42.5 million by a partnership involving the Pritzkers and New York real estate investor Alvin Dworman. The partnership operated through Coast-to-Coast Financial Corp., a holding company.
It was one of the first banks in the 1990s to turn to subprime loans, which target high-risk borrowers at higher interest rates. Recipients of those loans often have delinquency or default histories, bankruptcies or limited debt experience, and eventually begin defaulting on their mortgages.
The dramatic rise in those defaults and foreclosures, banking and government analysts said, eventually led to the housing crash and resulting financial crisis a decade later.
Despite the bank’s failure, the Pritzkers have continued to make money — 11 of the heirs are billionaires, according to Forbes magazine. One of those heirs, Penny Pritzker, was the national finance chairwoman of Mr. Obama’s 2008 presidential race and has “bundled,” or collected, between $100,000 and $200,000 for his current campaign.
In 2009, Mr. Obama named her to the President’s Economic Recovery Advisory Board to help solve the nation’s financial crisis. Mrs. Pritzker and her husband, Dr. Bryan Traubert, have donated more than $133,000 directly to Mr. Obama’s political campaigns, election records show, and they and other family members have helped raise hundreds of thousands of dollars in campaign contributions for him over the years.
Despite Superior’s failure, the Pritzkers have begun to invest in banks again. In 2010, the Pritzker Family Foundations LLC (PFF), of which Mrs. Pritzker is president, invested $503,000 in Community Bancorp, which later became Cadence Bancorp. Cadence raised $1 billion from investors.
In April 2011, Cadence — with financial guarantees from the federal government — bought from the FDIC substantially all the assets of a failed bank in Birmingham, Ala., ironically also named Superior Bank. The Alabama bank, which is not related to the Pritzker’s earlier defunct bank in Illinois, was the largest bank failure of 2011.
Susan Anderson, spokeswoman for Mrs. Pritzker, said PFF is owned by a consortium of nonprofit charitable 501(c)3 tax-exempt organizations headed by Pritzker family members. She said the Cadence investment was intended to help the organizations award grants, primarily in the areas of education, science, health, art and culture.
Ms. Anderson described PFF’s investment in Cadence as “minuscule,” with no decision-making authority. She also said Mrs. Pritzker had “no knowledge of, nor was she involved in” the Superior settlement agreement that led to the early payment to the FDIC, saying it was handled by trustees for the Pritzker family.
But OTS records show the agency identified “concerns” with Superior’s mortgage-banking operations as early as July 1993 and reported in June 1994 that its continued investments in subprime mortgage pools exposed the institution to a “somewhat greater risk than normal.”
In a February 2002 report, the General Accounting Office — since renamed the Government Accountability Office — noted that Superior’s management began to focus on its subprime lending business in 1993 by acquiring Alliance Funding Co., from which the bank adopted a business strategy that included the targeting of borrowers nationwide “with risky credit profiles, such as high debt ratios and credit histories that included past delinquencies.”
In 2008, Mrs. Pritzker’s attorney, Kevin Poorman, told The Washington Times that while his client had stepped down as Superior’s chairwoman in 1994, she wrote a letter on May 31, 2001, as a Coast-to-Coast board member urging the bank to make an expanded push into subprime loans in an effort to save itself.
“Your resolve and dedication is a primary reason for the past successes of the bank and will once again restore Superior’s leadership position in subprime lending,” she wrote.
The bank was shut down 57 days later.
Critics have cited that letter as evidence of Mrs. Pritzker’s continuing stewardship of the bank and her advocacy for a subprime lending practice that Mr. Obama has criticized. During a campaign speech in July 2008 in Pennsylvania, Mr. Obama said the nation’s mortgage crisis “has to do with the fact that people got suckered into loans they could not pay” — adding that the banks and financial institutions that made the loans were “making money hand over fist,” but knew that many of the deals were “just too good to be true.”
Played no role
White House spokesman Eric Schultz declined to comment on the Pritzkers’ dealings with the FDIC, referring inquiries to Ben LaBolt, spokesman for the Obama campaign. Mr. LaBolt also declined to comment, but a campaign official who asked not to be named said the campaign played no role in the decision to give the Pritzkers a discount.
The $460 million settlement agreement called for the Pritzkers to pay $100 million upfront and the balance over the next 15 years in annual payments of $24 million. The Pritzkers also were not required to pay interest on a $360 million promissory note. As the receiver, the FDIC collected the money and made payments to the depositors and the FDIC Insurance Fund.
Records show the Pritzkers still owed the federal government $144 million in June 2011 as they negotiated a payoff deal. The FDIC and Ms. Anderson cited confidentiality in refusing to disclose the amount of the discount or how much the Pritzkers paid to settle the debt.
FDIC spokesman David Barr said only that the agency considered the debt paid in full.
Since 2001, the government has paid $43.7 million to Superior depositors whose accounts exceeded the $100,000 covered by FDIC insurance — about 81 percent of the $53.9 million they had in uninsured deposits the day the bank was shut down. As of March 31, records show, the FDIC had $12.9 million in its Superior receivership account, but owed $375 million to the FDIC Insurance Fund, the uninsured depositors and other creditors.
“The uninsured depositors will get pennies,” said Bert Ely, a banking consultant who heads Ely & Co., an Alexandria financial-institutions and monetary-policy consulting firm. He said there was not enough money left to make the depositors and the FDIC whole, adding that of the remaining $12.9 million, the first $1.8 million would go to pay administrative costs and the remaining $11.1 would be split — 97 percent to the FDIC and 3 percent to the depositors.
“Clearly, people who run a bank into the drink should not get another bank until the depositors are paid,” said Mr. Krislov. “Owners of a failed bank should not be approved for future bank ownership while former depositors remain unpaid.”
In a letter, Ms. Sweet told the FDIC it should “prohibit the Pritzker family from investing in FDIC-insured banks until former Superior depositors are made whole.” She said she was “outraged” the family was “once again trying to make an opportunistic play off of the federally insured banking system.”
Mr. Courtney said the Pritzkers getting back into banking was “a kick in the teeth” to depositors like him who are still waiting to get their money. He also said he was annoyed that every time he gets a payment check from the FDIC, the agency charges him $25 for handling. “It is just another kick in the ass.”