Troubled Waters

Why should Barney Frank and Chris Dodd have all the fun? The Wall Street Journal this morning has published a story detailing the apparent conflict of interest of California Congresswoman Maxine Waters and the OneUnited Bank. Rep. Waters is a member of the House Financial Services Committee and a one-time shareholder of OneUnited Bank, a bank which recently received over $12 million in federal TARP money and one with which she still maintains close personal and financial ties.

While the article acknowledges that the relationship is nothing new – the representative has detailed her ties in disclosure forms – it does call into question the appropriateness of such a relationship during a time of financial crisis given the government’s continuing role as financial overlord. Waters’ Financial Services Committee oversees financial issues, and the representative is a (*shudders*) potential future chairperson.

Rep. Waters has been a vocal supporter of the minority-owned OneUnited Bank. Both she and her husband have held financial stakes in the bank – her husband still does, and was up until recently a director.

And while the bank has received numerous raves from community groups for its lending practices under the Community Reinvestment Act; OneUnited, like many of its competitors, has succumbed to the effects of the housing bubble. The bank had invested heavily in Freddie and Fannie, and had seen most of its assets wiped out last October. It was then that Rep. Waters stepped in and secured a meeting with Treasury officials. Shortly after, OneUnited received over $12 million in TARP money. Rep. Waters says she was unaware of the transaction, and added that OneUnited was “just a small” bank.

But a small bank with big friends nonetheless.

In October 2008, federal regulators ordered the bank to stop paying for a Porsche used by one of its executives and its chairman's $6.4 million beachfront home in Pacific Palisades, Calif., a luxury enclave between Malibu and Santa Monica.

What is the difference – propriety-wise – between the CEO of a major failed lending institution receiving a bonus, and the Porsche and $6.4 million beachfront home of “just a small” bank’s executive team being paid for by the shareholders and taxpayers?

And at the risk of poking the racial hornets nest, could someone please tell me what a "major white bank" is?