Congresswoman With Ties to Bank Helped Seek Funds

BeyondGeography

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Thu Mar-12-09 03:38 PM
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Congresswoman With Ties to Bank Helped Seek Funds

Source: NYT

WASHINGTON � Top banking regulators were taken aback late last year when a California congresswoman helped set up a meeting in which the chief executive of a bank with financial ties to her family asked them for up to $50 million in special bailout funds, Treasury officials said.

Representative Maxine Waters, Democrat of California, requested the September meeting on behalf of executives at OneUnited, one of the nation�s largest black-owned banks. Ms. Water�s husband, Sidney Williams, had served on the bank�s board of directors until early last year and has owned at least $250,000 in stock in the institution. Treasury officials said the session with nearly a dozen senior banking regulators had been intended to allow minority-owned banks and their trade association to discuss the losses they had incurred from the federal takeover of Fannie Mae and Freddie Mac. But Kevin Cohee, OneUnited�s chief executive, instead seized the opportunity to plead for special assistance for his bank, federal officials said.

...Ms. Waters declined on Tuesday to comment on the meeting, or to say if her husband still owns OneUnited shares. Her staff released two letters that showed the meeting was initially called to discuss industry concerns broadly, not matters related just to OneUnited.

The congresswoman, a member of the House Financial Services Committee, did not disclose her ties to OneUnited to Treasury officials, who said they learned of them only later.

...While OneUnited did not get the $50 million it requested, the bank did become among the first minority-owned institutions to receive a cash infusion � $12 million � in December through the Treasury�s bank bailout effort, called the Troubled Asset Relief Program.

The aid surprised some bank analysts because the bailout was intended for healthy banks, and OneUnited was then considered to be in precarious condition. In addition, it had been harshly criticized by regulators in 2007 for failing to give a sufficient number of loans to lower income residents in Miami, while favoring wealthier customers there. And the F.D.I.C. sanctioned the institution in October 2008 for �unsafe or unsound banking practices,� including excessive compensation for Mr. Cohee. The bank had provided him with a 2008 Porsche SUV and maintained his $6.4 million beachfront compound in Santa Monica. Calif., with views of the Pacific and a spa and pool.

Read more: http://www.nytimes.com/2009/03/13/us/politics/13waters.html?hp

More from LA Weekly: The WSJ quotes financial-services committee chair Barney Frank as urging Waters to "stay out of it" when he was trying to assist OneUnited last year. Waters' intercession on behalf of OneUnited at various points in its history has not been unappreciated: According to the NYT, bank executives have contributed $12,500 to Waters' election campaigns.

Against the larger mural of mega-bank failures and investment-house failures, the matter of OneUnited and its L.A. congressional advocate probably amounts to a mere footnote. However, Waters' open intervention on behalf of the bank, along with her racializing the debate over the banking system (she has referred to at least one large lending institution as a "white bank") can only harm the cause of both minority-owned banks and of banking reform in general. Does she really want the public to view OneUnited as the King-Drew of lending institutions?

http://blogs.laweekly.com/ladaily/maxine-in-hot-waters-over-bank/