Bombshell evidence may make Waters an ethics nightmare for Dems

Apparently, the Charlie Rangel ethics trial was just the warm-up act.  The New York Times reported over the weekend that the House Ethics Committee suddenly postponed the trial of Maxine Waters on ethics violation because it found more evidence of direct intervention by her office to benefit the bank in which her husband owned a substantial interest.  According to new e-mails uncovered by the committee, her chief of staff directly coordinated with other members of the House Financial Services Committee on behalf of OneUnited:

A newly discovered exchange of e-mails led the House ethics committee on Friday to delay its trial of Representative Maxine Waters, a California Democrat accused of helping steer bailout money to a bank in which her husband owned shares.

The e-mails are between Mikael Moore, Ms. Waters’s chief of staff, and members of the House Financial Services Committee, on which Ms. Waters serves. 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. ..

The subcommittee’s original report found that in early September 2008, Representative Barney Frank, Democrat of Massachusetts and the committee’s chairman, told Ms. Waters not to get involved with any issues involving OneUnited and that Ms. Waters agreed to refrain from advocating on the bank’s behalf. The case against Ms. Waters hinged largely on a series of e-mails between Mr. Moore and OneUnited, which may suggest that Ms. Waters’s office continued to lobby on behalf of the bank, although Mr. Moore has argued that he was primarily on the receiving end of the messages.

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.

Waters may not be the only Democrat in trouble if this is true.  The e-mails used loaded but generic terms like “small bank language,” a code for the known interest Waters had in OneUnited.  After all, Waters had already discussed her interest in the bank with Frank, and the nudge would be unmistakable.  Everyone on that committee knew that the “small bank” that held the most interest for Waters was the small bank in which her family held so much interest.

That opens up questions about the ethics not just of Waters but of those committee members who cooperated with Moore and his pleas for “small bank” assistance. OneUnited ended up with millions in TARP money, and unlike other applicants, got to count that cash among its assets before actually receiving the money.  The preferential treatment the bank received — unique among over 700 applicants for TARP money — seems oddly coincidental to Waters’ status and the newly exposed machinations of Moore on her behalf.

How long will it be before the House takes up this case?  One would presume that the Democrats would want to conclude the ethics trial before the end of the lame-duck session in order to have a majority on the House floor for Waters’ eventual punishment, but the news of the e-mails may have them hoping they can get everyone to forget about it forever.  That’s not likely to happen, but it may be a little more likely that a future Ethics committee may be looking into the actions of other Financial Services Committee members.

Note: I’ve been traveling the last few days and will be traveling the rest of the week.  You’ll continue to see posts from our fine guest bloggers today and through the holiday weekend, with me getting back to normal next week

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