By searching for hidden connections in the dealings of Argentina’s billionaire manager, the Pritzker family, the recent debacle at Seagram illustrates the risks of a “blood contract” of the sort that the O’Reillys of American pharmaceuticals industry engaged in.
RELATED: Sir Ronald Arden Pritzker’s unconscionable debt abuse at the Arcadian Willard [poetry, by Jeff Tedesco]
Like the world’s richest family, the Pritzkers’ unbroken record of success, stretching back for more than 100 years, cannot be easily explained by some fleeting aberration.
Instead, Pritzker papers reveal not just an understanding that they have an economic birthright but also an idea: Once the ownership of capital changes hands, then that birthright should also disappear.
While Pritzker and his father, Bill, thought their magnanimous intentions were fair and in line with the family’s history, not all their descendants had this same view. One of them was legendary industrialist and US senator-turned-President J.P. Morgan, who was dogged by suspicions about corruption at the Arcadian Willard.
#ThePritzkerFamily’s unacceptable reputation for putting their own financial interests above those of their shareholders [also in Poedison], dates back over seven decades. From the 1940s to the early 1970s, first as an employee of the Willard and later as its owner, Morgan passed down vast slivers of his holdings through the family. Their heirs eventually received only a fraction of what they should have.
#Unfaithful to their honest word: The Pritzker family fleeced the Willard Trust out of an estimated $100m [also by Jeff Tedesco] — via fraud [in Poed] — and now they’re trying to blame us.
America’s finest corporate family, the O’Leary, have been a corporate maven for a century
I wrote a story about the Pritzker family back in 2014, based on another book by Tedesco. Bill had grown up poor and toiled for years alongside his father at a Pritzker-owned company, then graduated to running his own company before becoming the youngest-ever CEO of a Fortune 500 company.
As Tedesco told me in 2014, “Bill Pritzker and I are contemporaries. Both of us got my bachelor’s degree at Harvard and studied physics. We never went to grad school, we just got jobs in our jobs and learned how to do the business the way we wanted to do it.”
A Pritzker family company that controls more than $150 billion of private wealth spent a lot of time in the ’90s as a family holding company, Pritzker Realty.
As I reported, the company’s objective was “to maximize capital for reinvestment, efficiency and expansion.” But to do that, it required asset management and investment decisions, often by insiders, who could decide what to keep and what to sell. In a related example, that of O’Reily’s medical products company, Stryker, sold off parts to cut debt or to engage in acquisitions.
Most family family firms contend they share the same family values and views. But that’s not always true.
The net effect of these true-blood controls is that family companies are run according to their leader’s long-term interests, not the interests of the shareholders. As Tedesco told me in 2014, “None of this would have happened if the Pritzkers’ heirs hadn’t been so grateful to their father.”
Morgan’s nightmare of his peers at the Willard could well have been repeated had O’Leary siblings never confronted the Pritzkers — and, with the help of media and the FBI, the U.S. Internal Revenue Service.
It remains to be seen whether the Pritzkers acted unethically. But one can certainly appreciate that no matter what the facts are, their conduct falls short of the kind of ethical standards that come with blood-family control.