Maxine, Barney, Fannie, Freddie & TARP Hanky-Panky

Posted on August 3, 2010


By Michelle Malkin  Over the weekend, I gave you a refresher course on entrenched California Democrat Rep. Maxine Waters’ OneUnited Bank ethics scandal. It’s a textbook case of cronyism of color.

Last night, the House Ethics Committee filed three charges against her related to those shady dealings — specifically, her role in arranging a special meeting between then-Treasury Secretary Hank Paulson (known on this blog as the lying, Naked Emperor) and her pals at the black-owned, deeply indebted OneUnited Bank.

In a nutshell: The minority depository institution was seeking a backdoor government rescue from its reckless decision to squander nearly $52 million of its bank capital on Fannie Mae and Freddie Mac preferred stock. After the federal bailout of Fannie/Freddie, OneUnited’s stock in the government-sponsored enterprises plunged to a value estimated at less than $5 million. Only through Rep. Waters’ intervention was OneUnited Bank able to secure an emergency meeting with Paulson and Treasury. They did so under the guise of representing the “National Bankers Association.” But records obtained by congressional investigators showed that OneUnited Bank’s legal counsel, vice president and president (the latter two are married to each other) spearheaded the meeting, its agenda, and drafted the talking points/briefing material for Rep. Waters. As I noted in my OneUnited column last year:

“The banks’ executives donated $12,500 to her congressional campaigns. Her husband, Sidney Williams, was an investor in one of the banks that merged into One United. They’ve profited handsomely from their relationship with the bank…Waters (along with Rep. Frank) participated directly in pressuring the feds for OneUnited’s piece of the bailout pie. She personally contacted the Treasury Department last December [2008] requesting $50 million for the company– and failed to disclose her ties to the bank to them. The government ended up coughing up $12 million in TARP funding for OneUnited — despite another government agency rapping the bank in October 2008 for “operating without effective underwriting standards and practices,” “operating without an effective loan documentation program” and “engaging in speculative investment practices.”