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Obama names Chicago tycoon as commerce chief

US President Barack Obama (L) announces his nominee for Secretary of Commerce, Penny Pritzker on May 2, 2013
US President Barack Obama (L) announces his nominee for Secretary of Commerce, Penny Pritzker, during an event in the Rose Garden of the White House in Washington, DC, on May 2, 2013.

US President Barack Obama on Thursday nominated billionaire Hyatt hotels heiress and major Democratic campaign contributor Penny Pritzker as his new commerce secretary.

Filling out his second term economics team, Obama also named Michael Froman, currently his top advisor on international economics, to be US Trade Representative, as his administration tries to boost US exports.

The choice of Pritzker, a member of a prominent Chicago business dynasty who staked out her own success in real estate, was unsurprising -- her name had been circulating for months as a likely nominee.

After having helped Obama raise millions for his initial White House run as his national finance chairwoman, Pritzker had been tipped to be commerce secretary in his first term.

But amid some controversy over her fortune, her family's use of loopholes to pay low tax rates, and objections from unions over Hyatt's relations with its workers, she announced shortly after the election that she would not take the job at that time.

Four years later, Obama apparently feels that it will now be easier to get the necessary support in the US Senate for her confirmation.

Pritzker, who turned 54 on Thursday, "is one of our country's most distinguished business leaders," Obama said.

"She knows from experience that no government program alone can take the place of an entrepreneur. She is going to make America a magnet for good jobs."

Pritzker earned graduate degrees in law and business administration from Stanford University, after getting an undergraduate degree in economics at Harvard.

Her father, Donald Pritzker, was one of the cofounders of the Hyatt hotel chain.

She currently serves as chairwoman and chief executive of PSP capital Partners and Pritzker Realty Group, and is chairwoman of Artemis Real Estate Partners. Forbes magazine recently estimated her fortune at $1.85 billion.

Her Senate confirmation still faces a few potential hurdles.

In the early 1990s, she chaired the Superior Bank in Chicago, partly controlled by her family. The bank collapsed in 2001, when she was no longer directly involved, but the issue came up as a sticking point four years ago.

More important will be the Hyatt Hotels Corp's treatment of workers and Pritzker's alleged anti-union stance.

The national service workers union, Unite Here, has attacked Hyatt for years for what it calls "substandard working conditions" for its housekeeping staff.

And Pritzker, who served on the Chicago Board of Education until March, was branded "an anti-labor, anti-worker kind of boss" by the Chicago Teachers Union.

US President Barack Obama announces his nominee for US Trade Representative, Mike Froman (L), May 2, 2013
US President Barack Obama announces his nominee for Secretary of Commerce, Penny Pritzker (R), and his nominee for US Trade Representative, Mike Froman (L), during an event in the Rose Garden of the White House in Washington, DC, on May 2, 2013.

Froman, who will be in charge of hashing out major trade pacts with Asia and Europe, will take a role central to the Obama administration's efforts to boost US exports to right the country's trade balance -- especially its deficit with China.

On Thursday, the Commerce Department reported the US trade deficit narrowed 11 percent in March to $38.8 billion, a still-large sum that included a $17.9 billion bilateral deficit with China.

Currently Obama's deputy national security advisor for international economics, Froman held key positions in the Treasury and on the White House economic council during the Clinton administration.

He was the White House's principal negotiator in reaching trade agreements with South Korea, Colombia and Panama, and oversees economic relationships with the country's major trading partners.

Obama called his former law school classmate "an extraordinarily tough negotiator."

"He does not rest until he's delivered the best possible deal," Obama said.

"Mike's going to continue to fight for that level playing field in his new role, as he helps to move forward trade negotiations with both the Asia-Pacific region and Europe."

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