The bigger they think they are, the harder they fall, Part Three

Rep. Maxine Waters is vowing to fight charges that she violated House ethics rules. But Waters may face an uphill battle.
According to the Washington Post, the evidence is that she approached Treasury Secretary Paulson to request that he meet with African-American bankers to discuss the federal takeover of Fannie Mae, which had wiped out millions of dollars in Fannie Mae stock held by minority-owned banks. There was nothing wrong with requesting a meeting for that purpose. But when the meeting occurred, it was dominated by representatives of OneUnited Bank, in which Waters’ husband was a major shareholder. And these representatives asked for direct federal assistance. After the meeting, says the Post, Paulson pointedly told Waters that he had expected “a larger turnout.”
Paulson may have been surprised that the meeting was about OneUnited Bank, rather than minority banks generally, but Waters wasn’t. According to the Boston Globe, an email to her office from a OneUnited director indicates that the meeting was intended to advocate for OneUnited, not for a broader group of banks
Waters also approached the ever-accommodating Barney Frank, chairman of the House Financial Services Committee, about the problems faced by OneUnited Bank. Frank says he told Waters not to intervene in the matter. It’s not clear (at least to me) whether Frank claims to have given this advice before or after Waters lobbied Paulson for a meeting.
It is clear, though, that Frank inserted language in the TARP that enabled OneUnited to draw $12 million in aid. Frank did this even though OneUnited had what the Post calls a “mixed” record of lending to minority communities. That’s a charitable characterization. According to the Globe, the handful of mortgages the bank had written in recent years were mainly to wealthy clients in chic locations, including the South End and Martha’s Vineyard, despite the bank’s stated mission to support Boston’s urban communities.
In addition, OneUnited had run afoul of regulators for buying its executives a Porsche. Other perks included a $6.4 million beachfront mansion in Santa Monica the bank says it used to conduct business.
Since the enactment of the TARP, OneUnited has missed all but one of six scheduled payments to the Treasury Department. But even if OneUnited had been a good candidate for federal help, Waters should not have been working to secure that help, given the heavy involvement of her family in the bank.
As the Washington Post’s board of editors concludes, “this sure has an unethical whiff to it.” It seems to me Rep. Waters will inflict further damage on her party if she insists on a trial. But there’s not much reason to beleive that Waters is particularly concerned about her party.


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