Cross-posted by Gary Fouse
Not surprisingly, Rep. Barney Frank (D-MA) is back in the spotlight. This time, the chair of the Financial Services Committee is attracting attention for interceding with the Treasury Department and arranging 12 million dollars in Troubled Asset Relief Program (TARP) funds to be directed to OneUnited Bank of Massachusetts-even though the bank doesn't seem to meet the guidelines for bailing out banks.
This tiny bank in Massachusetts is the only minority-owned bank in the state. The bank's capital has been depleted, and it suffered a loss of $54.3 million from its holding of preferred stock in Fannie Mae and Freddie Mac. It is currently under a cease and desist order from the FDIC for its unsound practices in lending and executive compensation. The bank has been ordered to cut financial ties to a California-based liability company that possesses a beachfront home in Santa Monica worth 6.4 million. The bank also pays for Porsche for the personal use of its president Kevin Gohee.
So why did Frank personally intercede on OneUnited's behalf and steer 12 million to the bank? According to Frank, it would have been tragic if the only black-owned bank in Massachusetts were allowed to fail. He also stated that it was not OneUnited's fault that Fannie Mae and Freddie Mac ran into problems.
It has been reported by the Wall Street Journal (1-27-09) that in addition to Frank, one other member of Congress was contacted by the bank for assistance. That would be Rep. Maxine Waters (D-CA). Just coincidentally, Waters' husband, Sidney Williams, was a director of the bank until this past spring. Just a coincidence, mind you.
However, I am confident that President Barack Obama, in his promised era of change and transparency, will clean up this behind-the-scenes process that is anything but transparent.
Besides, Barney Frank is on the job.