The Trump administration’s five-page extortion letter threatening to withhold federal funding for Harvard if the university does not comply with onerous ideological demands was addressed to its president , Dr. Alan Garber.
It was also addressed to the most senior member of its board of governors, Penny Pritzker.
Pritzker is also widely viewed as the dominant member of the ultra-wealthy Pritzker family that was Donald Trump’s partner in his first big real estate deal in Manhattan back in 1975.
She has not made a comment about Harvard’s decision to stand up to the Trump administration and the university did not reply when the Daily Beast asked about her role.
But she must know from her family’s experience decades ago what it can ultimately mean to make a deal with Trump.
At the time the Pritzkers entered into a partnership with him, Trump was a 29-year-old outer borough unknown. He used his father, Fred’s political connections to secure a 40-year, $160 million tax break for the renovation of the 28-story Commodore Hotel adjacent to Grand Central Station.
“Whatever my friends Fred and Donald want in this town, they get,” New York’s then Mayor Abe Beame reportedly once said.
But the banks were not ready to bet millions on some unproven kid from Queens. Trump made a partnership deal with Hyatt Hotels that was the opposite of deals he would make in the future, when he would provide the Trump name and let the other party manage the property. This time it was the Hyatt name and Trump management.
After an initial financial success, the partnership devolved into a prolonged, acrimonious dispute between Trump and Hyatt, which was then headed by Jay Pritzker, Penny’s uncle.
“The china is smashing against the walls again in one of New York’s rockiest corporate marriages — the partnership between Jay Pritzker, the Chicago financier, and Donald J. Trump the Manhattan developer, who jointly operate the Grand Hyatt Hotel” The New York Times reported.
Trump complained that Hyatt had actually asked him to pay his due share in upgrading the hotel at a time when his dependence on junk bonds and outsized sense of his own brilliance in other projects had left him at the brink of ruin. He narrowly escaped and revealed a taste for revenge that has become familiar to many of us in recent days.
“They attacked me when I was down,” Trump said. “Now I’m doing great again and it’s my turn. I always said, the first time I got back on my feet, the Pritzkers would be the first people I’d go after.”
The split had been presaged by a 1989 investigation by New York’s then Auditor General, Karen Brustein. She noted that under the terms of the tax abatement deal, the owners of the Grand Hyatt were required to pay a certain percent of their profits to the city.
The city’s end was $3.7 million in 1985, but dropped by more than $3 million the following year even though the hotel’s profits were up. Her office asked the Trump people to see the books.
“They denied that they had them,” Burstein told the Daily Beast this week. “[But] somebody sent us an original accountant’s report for the year.”
The report showed that Trump’s accountants had applied what Burstein would term “aberrant and distortive” procedures to reduce what was purportedly owed the city to $1.3 million. There was also a letter from Trump to account indicating that even this was not enough.
“Saying, ‘Can’t you get this down?’” Burstein remembers.
Trump’s accountants had complied and by using further unorthodox procedures and came up with $667,155. Trump’s people howled when Burstein prepared to release the findings of her audit.
“‘His people called all the time saying, ‘This is Donald Trump. You can’t do this,’” Burstein remembered. “And I said, ‘He’s exactly like any lessee of the city… Of course I can publish it.”
Burstein went ahead and released the results. Trump responded like a married guy who has been caught cheating.
“[The Trump people] insisted we were completely crazy, crazy wrong,” Burstein recalled. “And then we were reviewed by a major accounting firm that said our work was pristine.”
Burstein took exception to Trump essentially robbing the city she loves at a time it was so cash strapped it was struggling to maintain essential services such as the police.
“I’d never had dealings with him, and I was just horrified by his reckless flimflamerry,” she told the Daily Beast.
She continued, “I recognize that he’s a dangerous man, and he’s an absolutely unprincipled man. Nothing matters to him except his success, Nothing matters except that he wins, and winning means making more money or hurting other people.”
Trump tried to turn it around and then some, He filed a 1993 lawsuit in Manhattan Federal court charging that Jay Pritzker and his family had sought to force him to sell his share of the hotel. Trump further alleged that the Pritzkers had engaged in “a racketeering enterprise.”
“[The Pritzers] have systematically looted tens of millions of dollars from the Grand Hyatt through theft, fraud, waste and mismanagement,” Trump’s lawsuit charged, seeking $500 million in damages, using words that have in recent days become a DOGE mantra.
Trump tried to make it seem that Burstein’s audit was the result of an effort to conceal the supposed misdeeds of the Pritzkers.
“The defendants then fraudulently covered up this misconduct by … exerting undue influence over the Grand Hyatt’s auditors as well as through falsification of documents,” the lawsuit alleged.
Trump was even playing the victim even back in those days.
“There I was, at the lowest point of my financial life, and they tried to force me to default or sell my hotel cheaply,” he said when he filed suit.
Jay Pritzker replied that his family had only been pressing Trump to live up to his commitment.
“While it is true that he had a problem, we also had a problem,” he was quoted saying. “We had a hotel to maintain. There was nothing personal about it.”
The Pritzkers said the suit was “totally without merit.” None of the numerous allegations against them were proven.
“I don’t think they’re crooks at all,” Burstein said.
In 1994, the Pritzkers filed a suit of their own, seeking $100 million from Trump for damages to the hotel and its business resulting from his alleged failure to live up to his financial obligations. Trump responded much as he does now.
“Hyatt is merely trying to cover up their total incompetence in the running of the Grand Hyatt,” he said “Never before in my career have I witnessed such gross mismanagement. It’s unbelievable.”
The two sides subsequently reached an overall settlement of both suits. Trump sold his share of the hotel to the Pritzkers for $140 million in October 1996.
Jay Pritzker died three years later, at 76. His nephew, J.B. Pritzker is now the governor of Illinois and has presidential ambitions, comparing Trump to Hitler and declaring , “we don’t have kings in America.” But the J.B.’s brother, Penny has replaced her uncle as the central figure in the family. She has proven to be a tough, astute and principled business person and served as secretary of commerce in the Obama administration.
Now 65, Penny Pritzker is also the most senior member of the Harvard Board of Governors. That made her one of two people who received the extortion letter that comes as more evidence of how little Trump has changed over the half century since his first big deal and messy divorce from the Pritzkers that left him vowing revenge. Harvard responded in a letter from its lawyers, but a Pritzker joined the university’s president in refusing to submit to shameless threats.
Burstein, who is 82 and has since been a state senator and a widely respected judge, says that from all she can see, Trump is still exactly Trump.
“The same practice of undervaluing what he has in the way of profits, and overvaluing the cost to himself is how he has practiced his entire business life,” Burstein said. “And, it’s one of the reasons, by the way, in the end, nobody trusted him. He failed. He always failed. If he hadn’t been a reality star, he wouldn’t be where he is.”
She added, “He has a world that he keeps creating for himself, and anybody who interferes with it is a danger to him. He sees the person as a terrible threat. It’s astonishing to me. I don’t think there’s anything like it in the history of the United States. We have had people like Trump, but they have been at lower levels, in the states. They’ve never been the president of the United States.”
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