Last January we reported that as part of the release of TARP dollars, Congressman Barney Frank directed funds to a local Massachusetts bank Cited by regulators for excesses (they bought the CEO a Porsche). Even worse the Bank has been cited for UNSOUND Business Practices:
Frank, head of the powerful House Financial Services Committee, acknowledged that last fall he inserted into the government’s $700 billion Troubled Assets Relief Program bill specific language to help OneUnited, New England’s only black-owned bank. He also said he contacted someone at the Treasury Department about OneUnited’s application for emergency TARP funds, though he insisted he never asked Treasury to bend any rules on behalf of OneUnited.
OneUnited was financially reeling from the federal government’s takeover of Fannie Mae and Freddie Mac, both of which had their shares wiped out by the government action. OneUnited owned substantial shares in the two mortgage giants, Frank said….
..But OneUnited was also facing regulatory scrutiny last fall from other government agencies, which later slapped a cease-and-desist order on OneUnited due to “unsafe and unsound banking practices.”
Regulators also complained of “excessive” executive pay at OneUnited – including a Porsche for use by CEO Kevin Cohee….
Barney Keller, a spokesman for the Massachusetts Republican Party, said he wasn’t surprised by Frank’s action.
“Rep. Frank’s motives on the committee have always been politics first, people second, which is exactly how we got ourselves into this mess in the first place,” Keller said. “I hope he at least gets to test-drive the Porsche.” Source:Barney Frank helped controversial black-owned bank gain money
Yes that is the same Barney Frank who has spent much of the last year in a half demonizing CEOs for their compensation packages.
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Judicial Watch made a Freedom of Information Act request for all communication about the deal and it seems as if Mr. Frank has not be telling the whole truth, and nothing but the truth.
When Barney Frank was asked about intervening on behalf of a home state bank for Troubled Assets Relief Program (TARP) funds, the Massachusetts Democrat admitted he spoke to a “federal regulator” but according to the Wall Street Journal, “he didn’t remember which federal regulator he spoke with.”
According to explosive new Treasury Department emails uncovered by Judicial Watch, it appears this nameless bureaucrat is none other than then-Treasury Secretary Henry “Hank” Paulson!
Well wait a second, Frank is so much smarter than the average person, maybe that memory just got excised from his overstuffed brain.
These documents, which we obtained in response to a Freedom of Information Act (FOIA) lawsuit, indicate that Frank personally called former Secretary Paulson regarding a TARP cash infusion for the Boston-based OneUnited Bank. And it worked. On November 25, 2008, following Frank’s intervention, the Treasury Department awarded $12,063,000 in bailout funds to OneUnited, which is located in Frank’s district.
Moreover, according to these documents, Frank is not the only Democratic Congressman with dirty hands in the OneUnited bank scandal. Rep. Maxine Waters (D-CA), whose husband, Sidney Williams, served on the OneUnited Board of Directors, also intervened on behalf of the Massachusetts Bank. (Williams resigned shortly after Waters approached federal regulators regarding the OneUnited TARP grant.)
Among the key documents 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 OneUnited does not shock me. This is exactly the kind of corrupt deal-making I expected when the federal government decided to throw massive amounts of taxpayer dollars at private institutions. But I have to say, it is a rare case indeed when the documented evidence of impropriety is so clear.
These documents indicate that Barney Frank has been flagrantly dishonest about his role in lobbying for OneUnited. I mean, who is Frank kidding trying to suggest he didn’t remember calling Hank Paulson? It’s early but this looks to me like it could mushroom into another Keating Five-type scandal. And it certainly calls into question whether Rep. Frank should remain head of the powerful House Financial Services Committee.
No wonder the Obama Treasury Department stonewalled the release of these documents.
As I’ve mentioned previously, without the intervention of Frank and Waters, OneUnited would seem an unlikely recipient of TARP funds. As reported in the January 22, 2009, edition of the Wall Street Journal, the Treasury Department indicated it would only provide funds to healthy banks in order to jump-start lending. Not only was OneUnited Bank in massive financial turmoil, but it was also “under attack from its regulators for allegations of poor lending practices and executive pay abuses, including owning a Porsche for its executives’ use.” The bank continues to flounder and is one of the few financial institutions to have not paid dividends to the federal government in exchange for the TARP cash infusion.
Hey maybe it was a Porsche hybrid, you know how the Obama administration appreciates “green products.”
Fox Buisness has covered the scandal, but I wouldn’t expect many other outlets to pick it up, after all it does put the progressives in a bad light.