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The ethics trial of Maxine Waters was supposed to to start today, but in a surprise announcement the house committee announced last week that the trial was being delayed.  While Ms Waters claimed this was a victory, the NY Times has reported that the reason for the delay is new evidence which casts doubt on the truthfulness of the Congresswoman’s testimony.

At issue is deal that Waters is accused of arraigning between  regulators and One United of Massachusetts, a bank in which her husband held shares. Rep. Barney Frank (D-Mass.), who did not own shares in the company, subsequently inserted language into the bailout bill that effectively directed the Treasury to give special consideration to that bank which had been cited for unsound business practices and excessive compensation.

The new evidence comes from a series of emails from Waters’ Chief of Staff, Mikael Moore and members of the House Financial Services Committee:

The e-mails show that Mr. Moore was actively engaged in discussing with committee members details of a bank bailout bill apparently after Ms. Waters agreed to refrain from advocating on the bank’s behalf. The bailout bill had provisions that ultimately benefited OneUnited, a minority-owned bank in which her husband, Sidney Williams, owned about $350,000 in shares.

On the other hand the Congresswoman is happy about the delay of her trial, she is telling people that the committee delayed the hearing because they didn’t have enough evidence:

“The committee’s decision to cancel the hearing and put it off indefinitely demonstrates that the committee does not have a strong case and would not be able to prove any violation has occurred,” Ms. Waters said in a written statement.

Not so fast Rep. Waters

A person directly involved in the investigation said the new e-mails could show that members of her staff continued to work on the bank’s behalf.

“It may directly contradict a bit of Maxine’s story, if not the actual facts, the way she has told it,” said the person, who did not want to be identified because of the sensitivity of the trial.

Among other key documents pointing toward  wrongdoing by Ms Waters is an October 17, 2008, email from former Deputy Assistant Secretary for Banking and Finance King Mueller to former Assistant Treasury Secretary Neel Kashkari and other Treasury officials referencing the contact between Frank and Paulson:

Just spoke w/ Jim [Segel] in BF’s [Barney Frank’s] office. This is about One United Bank (a minority owned bank in BF’s district). Maxine Waters is interested in the bank as well, Treas[ury] and others met w/ them (minority bankers assoc) last month per the Water’s request. They were a big holder in f/f preferred. BF is interested and may call HMP [Henry Paulson] again about this. FDIC is their primary federal regulator. [Emphasis added.]

And there is also this October 16, 2008, email from Kashkari to former Deputy Assistant Secretary for Appropriations and Management Peter Dugas:

“Peter, Jim Siegel [sic] from Frank’s office called a few times-can one of you follow-up with him?” (Segel serves as Frank’s Chief Counsel.) Paulson’s October 2008 calendar, which has been released separately, details calls from Frank on October 2, 3, 7, 9, 13, and 17.

With respect to Rep. Waters, the documents include a January 13, 2009, email from Brookly McLaughlin, Treasury’s Deputy Assistant Secretary for Public Affairs, expressing surprise at Waters’ apparent conflict of interest: “Further to email below, WSJ [Wall Street Journal] tells me: …Apparently this bank is the only one that has gotten money through section 103-6 of the EESA law. And Maxine Waters’ husband is on the board of the bank. ??????”

The fact that Frank and Waters improperly intervened to score some TARP cash for One United is not shocking. This is exactly the kind of corrupt deal-making expected when the federal government decided to throw massive amounts of taxpayer dollars at private institutions.


According to the NY Times, these e-mails will be studied by the ethics committee’s investigative subcommittee, said a statement released by Representative Zoe Lofgren, Democrat of California and the committee chairwoman, and Representative Jo Bonner, Republican of Alabama.

Dan Riehl reports that the AP says the new email evidence is inconclusive he has an interesting theory for the delay, the Democrats are trying to let the new GOP-led house run the investigation so it looks as if it is the big bad racist GOP going after someone who is trying to protect minority banks.He wonders if the GOP will have the guts to proceed with the case in January with that in mind. Read Dan’s site and decide for yourself.

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