Maxine Waters Charges Spelled Out by House Ethics Panel
A congressional ethics panel accused California Democrat Maxine Waters of bringing discredit on the House of Representatives by helping get government assistance for a troubled bank in which her husband held stock.
After Waters was warned by Financial Services Committee Chairman Barney Frank to refrain from helping OneUnited Bank, she broke three House rules by failing to stop her chief of staff from providing such aid, the committee alleged.
The Boston-based bank was seeking $50 million in emergency government aid to avert financial collapse in September 2008, the ethics panel said in a statement of alleged violations. Such assistance would also have prevented the investment of her husband, Sidney Williams, from becoming “worthless,” the panel said.
The charges were announced a week after the Committee on Standards of Official Conduct said it was bringing ethics allegations against Waters for intervening on behalf of OneUnited. Waters denied the charges and said she wants a full hearing.
Frank had told Waters “not to get involved” in advocacy for OneUnited because her husband had recently been a member of the bank’s board, the ethics panel said. Frank, who didn’t know of Williams’s financial stake in the bank, told Waters “he would handle the issues related to OneUnited,” the committee said.
While Waters told Frank she would stop helping OneUnited, she didn’t tell her chief of staff, Mikael Moore, to stop assisting the bank, the committee charged.
The $12 million that OneUnited received from the Troubled Asset Relief Program in October 2008, plus $17 million in private investment, prevented Williams’s stockholdings from being wiped out, the committee charged.
“If OneUnited had not received this funding,” her husband’s “interest in OneUnited would have been worthless,” the committee said. Moore’s continued assistance to OneUnited “created an appearance” that Waters “was taking official action” for “her personal benefit, which did not reflect creditably on the House,” the panel said.
Waters’s lawyers, Stanley Brand and Andrew Herman, said in a July 12 motion to dismiss the ethics charges that “there is no factual basis” to the assertion that OneUnited would have failed without TARP funding.
The congresswoman’s office said today she had no immediate comment.
Waters is also accused of violating the spirit of another rule that bars members from receiving compensation as a result of exerting improper influence.
She was also charged with violating a House rule that bars members from “dispensing of special favors or privileges to anyone” and accepting benefits that might be “construed” as “influencing the performance” of official duties.
The bank’s financial troubles began when Fannie Mae and Freddie Mac were placed in a government conservatorship on Sept. 7, 2008.
OneUnited held “substantial investments” in preferred stock of Fannie Mae and Freddie Mac so their collapse “effectively wiped out OneUnited’s Tier 1 capital and threatened the viability of the bank,” the committee said.
Williams’s stake in the bank, worth more than $350,000 as of June 30, 2008, was valued at $175,000 after the conservatorship of Fannie Mae and Freddie Mac, the committee said.
Talking to Paulson
On Sept. 8, Waters called then-Treasury Secretary Henry Paulson to request a meeting between members of the National Bankers Association, of which OneUnited was a member, to discuss the collapse of Freddie Mac and Fannie Mae on minority- owned banks, the charges said.
The bank’s chief executive officer and chairman, Kevin Kohee, asked Waters to set up the meeting. Cohee and his wife, Teri Williams, the bank’s president, were frequent contributors to Waters’s campaign fund and hosted a fundraiser for her at their home, the committee said.
Paulson didn’t attend the Sept. 9 meeting between OneUnited executives and Treasury officials, the committee said. At the meeting Cohee and other bank officials sought $50 million from Treasury.
The panel said today it was releasing the details of the charges “in the interest of fairness and transparency” even though the panel wasn’t required to do so until later.
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.