Summer of Corruption: Maxine Waters’ zombie deadbeat bank; Update: House Ethics panel releases charges
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I’ve been telling you about Maxine Waters’ shady OneUnited meddling for the past year — and most recently spotlighted the OneUnited/TARP hanky-panky and Waters’ minority fat-cat banker pals last week. You’ll recall that I linked to an analysis by Linus Wilson at Seeking Alpha that exposed how weak OneUnited was. Flashback:
OneUnited Bank was left with NEGATIVE $7.0 million in equity, according to to this spreadsheet, which was mailed by OneUnited bank officials to the U.S. Treasury.
My joint research with Wendy Yan Wu, “Escaping TARP” shows that the average TARP recipient had a tier 1 capital ratio of 11.02 percent. Before it lost the bank’s capital on the Fannie and Freddie preferred stock, OneUnited was near the regulatory minimum of a 5 percent tier 1 capital ratio. After the mortgage giants were seized to prevent their failure, OneUnited’s tier 1 capital ratio was about -1 percent. In other words, OneUnited was a zombie bank. The stock owned by Ms. Waters’ husband would have been worthless without a government rescue and forbearance from regulators.
Yet, despite knowing that OneUnited had negative equity, and thus did not meet even the minimum capital requirements to be open for business, the U.S. Treasury invested $12.1 million of taxpayers’ dollars in this zombie bank on December 19, 2008. Ms. Waters’ alleged use of her position to enrich herself at taxpayer expense is troubling. So is the U.S. Treasury’s ultimate investment in OneUnited Bank based in House Financial Services Committee Chairman’s, Barney Frank’s (D-MA), district. My paper “TARP’s Deadbeat Banks” shows that OneUnited has missed five straight dividends. If it misses its sixth dividend, the U.S. Treasury will have the right to appoint two new directors to the banks’ board. Taxpayers representatives probably will soon be holding a board seat at OneUnited like Ms. Waters husband once held.
Has Congress learned its lesson? Not yet. Ms. Waters’ and Mr. Frank’s party are attempting to pass legislation to invest up to $30 billion in banks like OneUnited. An amendment pushed by U.S. Senator George LeMieux (R-FL) says that banks on the Federal Deposit Insurance Corporation’s (FDIC’s) problem bank list can get access to taxpayer funds, if they get matching amounts of private capital in the amended “Son of TARP” bill. CIT Group raised private capital prior to receiving TARP funds, and it failed nevertheless. I’m wondering why OneUnited was not seized by regulators a long time ago. Perhaps the Boston lender is too politically connected to fail.
This analysis has been confirmed by a separate report from American University’s Investigative Reporting Workshop:
The bank at the center of a House ethics investigation of U.S. Rep. Maxine Waters was the weakest to receive funds from the government’s Troubled Asset Relief Program at the time of its rescue, according to an analysis by the Investigative Reporting Workshop.
When then-Treasury Secretary Henry Paulson announced creation of the so-called “Capital Purchase Program” in October 2008, he said it was directed at “healthy institutions.” Nevertheless OneUnited Bank of Boston received a $12.1 million capital injection from the Treasury Department on Dec. 19, 2008. The money has not been repaid, according to Treasury Department documents.
Records show that as of Sept. 30, 2008, the latest quarter before the investment, OneUnited had “Tier 1 capital” of just 1.8 percent of assets. Of the 363 banks that got TARP money in the fourth quarter of 2008, at the height of the financial crisis, that was the lowest Tier 1 ratio.
In fact, none of the 987 banks that got TARP money between October 2008 and December 2009 reported a lower ratio in the quarter before they received federal cash. As of March 31, 2010, 16 TARP banks had lower Tier 1 ratios then OneUnited’s 4.98 percent.
And more: “OneUnited is one of only a few banks to be under a federal supervisory enforcement order at the time it received TARP funding.”
The more you dig, the worse it smells.
3, 2, 1…RAAAAACIST!
***
Update: The House Ethics panel has released details this afternoon of the charges against Mad Maxine. Go here.
Transcribing from the PDF of the House Ethics panel’s memorandum in support of the order rejecting Waters’ request to dismiss the case:
…the Statement of Alleged Violation asserts that the day after the Department of Treasury and the Federal Housing Finance Agency took action that threatened the viability of OneUnited Bank (OneUnited), a bank on whose board Respondent’s husband had previously served and in which Respondent’s husband held a significant investment, Respondent arranged for a meeting between executives from OneUnited and officials at the Department of Treasury. At the meeting between the OneUnited executives and Treasury officials, the executives asked Treasury for $50 million in funding for OneUnited. Treasury officials informed the executives that Treasury was not legally authorized to provide such funding. Following this direct request for funding by OneUnited executives, Respondent determined that it would be ethically improper for her to advocate on behalf of OneUnited. Despite previously instructing her Chief of Staff to work with the OneUnited executives, Respondent failed to instruct her Chief of Staff that he should not advocate on behalf of the bank. Respondent’s Chief of Staff in fact continued to do so even after Respondent determined that she could not do so.
The memo goes on to note that Waters’ chief of staff was heavily involved in proposing legislative solutions and communicating with other congressional staff about those solutions. And most notably, Waters’ chief of staff was thanked by OneUnited executives for helping to raise $17 million in private funding — in addition to the $12 million in TARP bailout money that OneUnited eventually secured after the Waters-brokered meeting.
The memo also responds to Waters’ claim that she did not benefit from her intervention:
…the fact that the value of Respondent’s shares of OneUnited stock did not change after receipt of TARP funds does not show that Respondent did not benefit from OneUnited’s receipt of TARP funds. This retention of value is the benefit Respondent received….the Investigative Committee concluded that OneUnited was under eminent threat of failure, and that Representative Waters, through her husband, had a significant financial interest in OneUnited, which would have been worthless if the bank had failed…this created the appearance that Respondent was improperly using official resources for her own narrow financial interest.”
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I can’t imagine what it feels like to waste other people’s money with a good conscience.
How about this. . . no congressperson gets paid anything. . . the money goes to me and I will decide what to spend for them. That’s what they are doing to America. Crooks. They are all crooks who aren’t worth what they are spending.
You’d make a poor dem…and to them its not wasting other peoples’ money, it’s investing other peoples’ money. And invest they do – in their and their cronies accounts, with just enough spare change thrown to the rabble to buy votes. All done with a good, and profitable, conscience.
I have a very fluffy fat gray cat. When she sits on our fence, she hangs over both sides. Kind of like this. My son calls her The Monorail. A rather appropriate moniker, since most liberals love spending tax dollars on public transit boondoggles.
I suggest we call all fat cats by this name name – Monorails.
Works for me.
Oh you can bet that the racist thing will be the first words out of everyones mouth. The fact the bank was a monority bank will be out there also. Like dear charlie, maxine is a crook and I hope the facts get out on them.
L
Crooks, cronies, and liars. Smart crooks steal from the gubmint, because no one will be going after you, and even if you are stupid enough to get caught, they won’t prosecute.
To them, it’s not even other peoples’ money.
When you get paid, your paycheck shows the net amount. According to the gov’t, they refer to that net amount as an expenditure. In other words, the gov’t is entitled to all of your salary and what you get is what they have decided to “spend to you” (expenditure).
How thoughtful of them.
Socialist criminals.
“Dead Bank Walking”
“Less Than Zero%”
“Night of the Living Bankers”
letget#4,
S/B minority
L
You’re a racist … so when the money runs out, they do a ‘Shore Bank’ boogie?
It is one stinky bundle. So how is the donks going to sell their teacher union bailout, and medicare money.
It is so, pathetically sad. Many of our citizens have been so indoctrinated by political correctness that they would prefer anything rather than being called a “racist.” They’d rather be raped and have their country looted by an urban mob rather than stand up for themselves.
Does anybody in his right mind think that Obama would have been elected if he were not (somewhat) black? The fact that he is a socialist, has terrorist friends, and had no experience or record to qualify him for the presidency…none of it mattered whatsoever. He was black (and, as Bidden reminded, he was “clean”), so no other questions could be asked. It was racist to question The One.
The congress is packed with black crooks: William Jefferson, Conyers, Rangle, Waters, to name just a few recent and current examples. Does anyone see a pattern here?
Being black doesn’t make you a crook; but it sure as heck puts you in a statistically suspect category.
Call me “racist”…I don’t give a damn. Sometimes I think we all need to claim that we are “racists” — even though few in the conservative movement actually are. When they hurl it at you and, naturally, you start denying it since it is not true, you look pitiful. I may never be quite confrontational enough to actual claim the label, but I will never dignify the charge with a denial. And I will get right in their face to say that being a Negro may not be anything to be ashamed of, but it sure is nothing to be proud of.
She was just getting her reparations early.
Just another racist example of The Man trying to keep a bruth… er… sistah down!
“We have to
pass the billsave the bank before weknow what’s in itfind out it’s worthless.”“If you like your
healthcarefailed bank, you can keep it.”“Too
bigminority to fail.”Keith Olberman: Zombie Commentator
True that to the left ALL of our money belongs to the government. Its also evident that the government is NOT entitled to the lefts’ own money, or as little as possible, which I’m sure Geitner, Rangel, Waters, et al can attest.
She’ll have do do some serious shuckin’ and jivin’ to get out of this one. But the CBC probably has a training manual with a chapter covering just such a contingency. “What To Do In The Unlikely Event You Get Caught“
HAHAHA. That is so true! Corrine Brown did just that in Jacksonville, Florida. It is still losing millions every year. I think she even tried for some of that stimulus boodle to EXPAND it to more nowhere stops. Thankfully I think she missed out on that. Unbelieveable. Entitlement on steroids.
Blacks in Congress are spotted owls…
….can’t touch them.
1) Hold a press conference – anyone that asks a direct, unscripted, question is a racist.
2) During the press conference – anyone that disagrees with you is a racist.
3) After the press conference – go on the morning propaganda shows and tell the world that any regulation you violated was racist inspired.
4) Give a speech on the floor of the senate/house chamber and use the words racist/racism at least once per paragraph. Have more than one paragraph.
5) Blame Bush.
So, a Republican in Alaska tries to get a bridge built to nowhere and it’s a bad idea.
Liberals all across the country are building public transit systems that stop where people aren’t, pick up no one, and drive empty buses and light rail cars around all day wasting energy. But it’s a good idea.
The main problem with taxes. The gov’t gets to decide how much they are and where they’re spent.
>>3) After the press conference – go on the morning propaganda shows and tell the world that any regulation you violated was racist inspired.
Try to get on with Harry Smith. He’s a pleasant-seeming fellow who is a specialist in sucker-punching conservatives with the “racist” canard. He struts a bit in the glow of self-righteousness and then fads back into the vacuous world of morning, network television.
It is unfair to imply that liberals want their public transit systems to be empty. Admittedly, they don’t much mind…makes it easier on their (mostly black) do-nothing, unionized transit workers.
But they also like it when lots of Democrat-voting urbanites get transportation for a buck or two a ride that actually costs the taxpayers more like twenty bucks. The only downside for them is that black ridership, though high, does not reach quite the numbers that it could. That’s because not that many blacks actually go to jobs and the trip to the welfare office or the parole officer tends more to be a weekly or monthly affair rather than a daily one.
…and just what did Barney Frank know, and when did he know it?
Follow. The. Money.
Sounds to me like Waters is throwing her chief of staff under the bus.
o/t – our hostess (MM) will appear on Hannity tonight
BTW, her CoS is her grandson. That will go over well at the next family reunion… “So, what has Granny done for the family this year as a Congresswoman?”
“She threw Mikael under the bus and now he is doin’ time!”
I’m all for setting annual salaries for members of Congress and the Senate and reducing said salaries for every vote that they cast to spend money that is not related to national defense, including border security, national transportation and communications infrastructure, and government operation for essential personnel. (No sense in paying for people who are “nonessential.”) At this point, most of them would owe the Treasury.
ECS
I think we are heading from 1 to 2 but on the fast track to 3.
1.Capitalism: You have two cows. You sell one and buy a bull.
2.Socialism: You have two cows. You give one to your neighbor.
3.Communism: You have two cows. You give them to the Government, and the Government then gives you some milk.
4.Naziism: You have two cows. The Government shoots you and takes the cows.
5. Progressivism: You have two cow. You must sell one to pay taxes to the Government, which will buy cows from lobbyists and give the cows to urban apartment dwellers. Union laborers will collect the cow dung which will be given to minority-owned businesses to sell to the lobbyist-owned fertilizer companies, which……..
– ThackerAgency
Of course they’re not worth what they’re spending. These people vote to spend almost inconceiveable amounts of money. No many folks in the whole world are worth the 10′s of billions of dollars these folks decide to spend day in and day out.
Oh to return to a day before buying the vote of entire segments of the population via passage of one entitlement program or another (paid for, of course, by everyone else) wasn’t yet the norm.
The sad thing is that the smell is spreading all across the country,and the people still hold their noses and vote these crooks back into office. Politics has become a cesspool of corruption and very few people are willing to do whats right. Vote them all out of office.
“…And guess what this liberal will be all about?” “This liberal will be all about
socializing, … basically, taking over and the government running all of your companiesmaking a hell of a lot of money off the tax payers.” ~ Maxine WatersWhat amazes me, and should enrage the taxpayer, is how many of these folks get to Congress poor, yet leave multimillionaires.
With the pay they get? Its WAY to consistant to be Honest or Moral… although since they write the rules… legal..
Does anyone feel that the word “racist” will soon be the new “wolf”? As in the boy who cried wolf?
If every time something negative happens you yell “racist” at the top of your lungs, it soon loses meaning …
Can’t happen quick enough for me.
There are a few honest people left.
Don’t throw them out with the creeps.
Waters has already said that the GOP would not accept her plea deal which forces her into a public trial.
Too bad.
So sad.
Speaking of pay . . . Here is a neat idea.
Your pay reduces by 10% each year you are in office.
Yea, I know . . .
We’re dealing with flesh-eating bacteria. There is no cure. Don’t take any chances.
Was it Rush that mentioned both Rangel and Waters were very pro-Hillary during the primaries and that Chicagobama has a very long memory?
Not quite, you do not give – that is personal compassion, sacrifice and kindness not indicitive of socialism. In socialism the government takes one cow and gives it to someone else – not necessarily your neighbor.
One of your cows is seized to feed “disadvantaged” people. It is killed on the spot and a few steaks are hacked out. Most of it rots, because the people — who have food stamps anyway — don’t want to mess with it.
Later, the people are hungry again and your other cow is seized…
That problem was taken off of LGM’s math final…HAR!
What ever happened to LGM???? Did he reinvent himself and come back as les?
When did the party of the people turn into the party of the party?
I’d like congressional pay tied to the budget deficit.
Deficit goes down: raise.
Deficit goes up: no raise.
Balanced budget: bonus.
Budget surplus: bigger bonus.
Waters’ attorneys plan to use her grandson in a buffer defense. It might work: Her grandson, Mikael Moore, was voted one of the “Hottest Blacks on Capitol Hill” by BET.
BET staffers say he has the “swagger and style” thing down. What do you think ladies — is he hot? This is the all-important question!
Shhhhhhhhhhh.