Consider, for a moment, the lot of the uber-wealthy Cabinet nominee. Forced to provide 184 pages of financial disclosure, just for the privilege of submitting herself for public service; forced to reveal the most intimate details of her investments and liabilities to the Senate and the nation.
This is the prep required for Penny Pritzker, 54, to try to become the next Secretary of Commerce. The Chicago philanthropist, Democratic fundraiser (she was finance chair of Barack Obama’s 2008 campaign), and Hyatt Hotels heir goes before a Senate Committee this week to face questions about her political, business and financial connections.
Admittedly, not many Cabinet secretaries these days are thousand-aires -- millionaire is more common.
But Penny Pritzker -- heir to a hotel, real estate and industrial fortune -- is a billionaire, with a "B." Forbes pegs her net worth at $1.85 billion, making her the 277th richest person in America. According to her financial disclosures, she runs a quarter-million-dollar tab on American Express and carries tens of thousands more on her Chase and Neiman Marcus credit cards.
So there are sure to be financial entanglements to untangle in Senate hearings this week.
“She and her family are so wealthy that they own investments and stocks that pretty much cover the entire economic field,” says Craig Holman, government affairs lobbyist at Public Citizen in Washington. Ten other family members whose wealth derives from the hotel chain and related businesses are reportedly also billionaires.
Holman says in preparation for her confirmation hearing, having been nominated by President Obama, Pritzker will have already worked extensively with the Office of Government Ethics and the General Counsel’s office to determine which stocks, bonds, and other investments she will plan to sell or shift into blind trusts if confirmed. That is in order to avoid any perceived conflict of interest in her decisions once she is Commerce Secretary. Holman points out that John Kerry and his wife had to sell at least one hundred investments when Kerry recently became Secretary of State.
Pritzker has already said she will resign her board position with Hyatt Hotels Corp., though she will not sell her stock in the company. She says if need be, once she is Commerce Secretary, she will recuse herself from decisions or actions related to Hyatt or other hotel-related entities.
Of course, that is assuming that she and her finances make it through confirmation. Norm Ornstein, resident fellow at the American Enterprise Institute (and author of the book “It’s Even Worse Than It Looks: How the American Constitutional System Colided With the New Politics of Extremism") has a colorful way of describing this: “The multiple proctological exams that congressional committees will put you through.”
Orenstein laments the scrutiny would-be Cabinet secretaries and Ambassadors now get, as congressional staffers from both political parties dig through the candidate's voluminous financial disclosures looking for any investments, relationships or past actions that might make the nominee politically vulnerable.
Orenstein says the disclosure and hyper-intense scrutiny is onerous even for Cabinet and Ambassadorial nominees of modest means. He estimates the typical cost of preparing oneself for confirmation hearings can run into the $35,000 range, most of it paying for lawyers and accountants. “There’ll be a few lawyers driving around D.C. in Mercedes after this is over,” he quips.
In the hearings, Pritzker can expect to be grilled in particular about her family’s multi-million-dollar trust, held in the Bahamas, of which she has been one of several family managers (she received a $54 million consulting fee last year from the trust). The trust was established to divide up the family fortune after a dispute in the early 2000s. Pritzker has said she is in the process of moving her Bahamanian trusts back under U.S. jurisdiction, now that the division of the family's holdings has been completed.
In the hearings, Pritzker’s role on the Hyatt Hotels Corp. board is also likely to be scrutinized, as the company has gotten into repeated fights with hotel unions.
Holman says if she is confirmed, Pritzker will have 90 days after taking the oath to actually complete the divestiture of her investments, and set up any blind trusts that are required.
During the recession, gold became a safe haven for U.S. investors. And in the investment world, it's widely viewed as a strong hedge against inflation. But with stock markets soaring and inflation fears easing, the price of gold is in steep decline. It's off nearly 30 percent from its peak.
For anyone shocked at how much the price of gold has dropped, don't be.
"It turns out it's a very risky investment," says Campbell Harvey, a finance professor at Duke University. He says people who stashed money in gold have been spoiled by positive returns. He adds the real price of gold is way higher than it should be. Two years ago, gold prices topped $1,900 per ounce.
"To revert to the long-run average," Harvey says, "the spot price of gold needs to drop to $800."
Ashish Bhatia, with the World Gold Council, says the price drop opens opportunities for new investors. And there's still plenty of demand for the metal itself.
"We've seen the physical demand from China and India virtually double in terms of tonnage demand from these two major markets in the gold market," Bhatia says.
He notes gold still has its place, just as long as investors don't put all their eggs into one golden basket.
From Texas to the upper Great Lakes, forecasters are warning that the weather will be rough Monday, Tuesday and Wednesday. Tornadoes are possible in the Plains States. Elsewhere, severe thunderstorms — some with hail — are likely. In Oklahoma, two people have died from storm-related injuries.
It's been in the pipeline for several weeks. But now it looks like a Yahoo purchase of the blogging website Tumblr is happening. Yahoo's board agreed on Sunday to pony up for Instagram-sized pricetag of $1.1 billion for Tumblr and its 26-year-old founder David Karp. The buy could offer an influx of advertising and business savvy.
AllThingsD first reported the deal. Kara Swisher, co-founding editor of AllThingsD, says this is a big part of the mission for Yahoo's new CEO Marissa Mayer -- a mission to make the aging Internet company cool again.
"She has been trying to regenerate it by doing a series of superficial things like free food and free iPhones," says Swisher. "But she really needs to fundamentally change the way people think of Yahoo."
Some worry Yahoo's Tumblr purchase will endanger the blog site's youthful, free-form vibe. Though Swisher says as long as the product quality doesn't change, the audience is likely to stay satisfied.
"Nobody has run from Instagram because Facebook owns it. People like Instagram because it's a great product," says Swisher. "They would be smart to leave [Tumblr] alone like Facebook has done with Instagram."
Click on the audio player above to hear more.
Microsoft's Windows phone nudged its way past BlackBerry to claim third place during the first quarter of 2013. Shipments of Apple's iPhone are slowing down -- representing 17 percent of all smartphone shipments, down from 23 percent this time last year. Meanwhile, Android shipments have nearly doubled since the first quarter of 2012.
Fortune Magazine's Adam Lashinsky joins Marketplace Tech host Ben Johnson to discuss the details behind the numbers and where the market is headed.
If you were looking to buy a smartphone, what kind would you get?