The national media appears to be taking an interest in Rep. Maxine Waters' outlandish - and long-standing - financial conflicts involving a small bank with operations in low-income sections of L.A. and Miami. Until recently, her husband was on the board. The bank in question, minority-owned OneUnited, has been a staunch political supporter of Waters - and Waters has made no secret of her connections to the institution. But here’s where it gets really messy: Waters helped bank executives arrange a meeting with Treasury officials last September in which CEO Kevin Cohee asked for up to $50 million in special bailout funds. Oh, and did I mention that Waters sits on the House Financial Services Committee, which oversees banking issues? Eventually, OneUnited received a $12 million TARP allocation. Like I said, outlandish. From the WSJ, which is following up on a report some weeks ago:
Ms. Waters, who represents inner-city Los Angeles, hasn't made a secret of her family's financial interest in OneUnited. Referring to her family's investment, she said in 2007 during a congressional hearing that for African-Americans, "the test of your commitment to economic expansion and development and support for business is whether or not you put your money where your mouth is."
At a hearing on minority lending in 2007, Ms. Waters criticized regulators for not doing enough to help minority banks stave off mergers with non-minority institutions. The lawmaker said she had contacted the Federal Deposit Insurance Corp. in 2002 over such concerns and "I was told that there was nothing that could be done." In her 2007 remarks, Ms. Waters alluded to two banks, Independence Bank of Washington, D.C., and "another bank that was about to be acquired by a major white bank out of Illinois." Ms. Waters didn't mention that OneUnited had been an unsuccessful suitor of Independence, which had been taken over several years earlier. The second bank, which she didn't name, appears to have been Family Savings Bank of Los Angeles. In 2002, that bank backed out of a merger agreement with FBOP Bank of Oak Brook, Ill., and shortly afterward was acquired by OneUnited.
Wait, it gets better. Here's a snip from today's NYT story:
The [$12 million cash infusion] 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. Critics of OneUnited, which is based in Boston and has branches in poor neighborhoods of Los Angeles and Miami, say the episode shows how special access arranged through a lawmaker with financial ties to the bank had compromised the integrity of the federal bailout effort.