Federal examiners e-mails show outrage over intervention for OneUnited

posted at 9:30 am on April 7, 2011 by Ed Morrissey

We last heard about the ethics charges lodged against Maxine Waters a few months ago, when the House Ethics Committee probe into her intervention on behalf of a bank connected to her husband stalled and two attorneys got suspended.  The focus on budgetary issues pushed the case from the headlines, but it’s back today with an eye-opening exposé in the Washington Post.  According to internal e-mails obtained by the paper, FDIC investigators were livid about the decision to bail out OneUnited, and they knew exactly why it got so much attention:

“There are some really good people expressing very strong opinions regarding what they view as a travesty of justice regarding the special treatment this institution is receiving,” acting regional director John M. Lane warned in a March 2009 e-mail to Christopher J. Spoth, a senior FDIC consumer protection official.

The claim that OneUnited benefited from assistance organized by Waters — whose husband held substantial stock in it — lies at the heart of unresolved House Ethics Committee charges. A special subcommittee alleged last spring that Waters’s actions related to the bank had brought discredit to the House, a claim that she has rejected.

The collapse of OneUnited came despite warnings from the FDIC over the bank’s heavy investment in Fannie Mae and Freddie Mac, and the intervention followed soon after.  The FDIC’s staff weren’t fooled by the nature of the intervention, either:

FDIC officials said that he resisted disclosing his decision to invest $50 million in Fannie Mae and Freddie Mac stock in early 2008 — or about 130 percent of the bank’s core working capital. When they subsequently pressed Cohee to sell the stock, he refused, the officials said. …

On Sept. 7, 2008, the bank’s Fannie and Freddie stock became essentially worthless when they were put into federal conservatorship. The next day, bank executives asked for Waters’s help arranging a meeting with top Treasury Department officials. Waters persuaded Treasury Secretary Hank Paulson to convene a Sept. 9 meeting but has said she was trying to help all minority banks punished by the stock devaluation — not specifically OneUnited.

Inside the FDIC, however, officials immediately connected Paulson’s decision with Waters’s family ties to the bank. “Evidently Kevin has called Maxine Waters. … (Is it her husband who is on the board?) … to complain about our mistreatment of the bank,” Doreen Eberly, then regional director, wrote to Boston area director Daniel Frye on Sept. 9. “Yes, husband of Maxine,” replied Frye.

The husband is Sidney Williams.  In June 2008, the last disclosure before the collapse, Williams held a $350,000 stake in OneUnited, which would have meant a whole lot of problems for the family if the bank collapsed.  The FDIC learned that the Congressional Black Caucus — of which Waters is a leading member — planned to hold up the TARP bill unless OneUnited was specifically included in the bailout.  In fact, Barney Frank added that provision, apparently after advising Waters (in vain) to distance herself from the bank.

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.  For instance, why did Kevin Cohee buy $50 million in Fannie and Freddie bonds a few months before the collapse when it amounted to “130% of the bank’s core working capital,” according to the Post?  Why did he resist disclosing that purchase, and why did he refuse to divest it when the FDIC flagged the transaction?  What role did Waters have in that arena, given her position on the House Financial Services Committee, which oversees all of these entities?

Update: Forgot to link the story; I’ve added it.

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The FDIC learned that the Congressional Black Caucus — of which Waters is a leading member — planned to hold up the TARP bill unless OneUnited was specifically included in the bailout

Excuse me?

ted c on April 7, 2011 at 9:38 AM

if the Department of Justice decides to take a closer look at the activities surrounding OneUnited

Laughable. As if the Dancing Pretzel Clown known as Eric Holder is going to go after a demorat, much less one who fits the racial characteristics of ‘his people’.

There will be some useless wrist slap from the might Ethics Committee, and all will be forgiven for twit Maxine.

Bishop on April 7, 2011 at 9:38 AM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

LOL, good one, Ed. not to worry, Eric Holder has her back.

rbj on April 7, 2011 at 9:38 AM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

I was pretty exicted, up until that part. Then I remembered who was in charge, and just laughed softly to myself.

It would be nice if so obvious a case of fraud/abuse was looked into.

It would also be nice if I won the lottery.

DrAllecon on April 7, 2011 at 9:40 AM

Free Market. lol.

Anyone think we live in a free market capitalistic society ?

China has the right idea: politicians, regulators and corporate CEO’s who are guilty of corruption should be put up against a brick wall and shot.

These people are worse than street criminals and they retire fat offshore accounts and not a care in the world.

rickyricardo on April 7, 2011 at 9:44 AM

Focusing on THIS case is demeaning to MY people…/-Eric Holder (DOBJ).

canditaylor68 on April 7, 2011 at 9:47 AM

Organized crime goes where the money is. That’s why having a super-big federal government is an even bigger disaster than you’d think. It’s not just the taxes. That kind of money attracts career criminals, who just what to skim the top off the three trillion coming in. Pretty soon you have millions of people who just want to skim the top off.

RBMN on April 7, 2011 at 9:49 AM

The reality is that no criminal action can be taken against Waters (or Frank) for their actions in Congress. Such blatant misuse of our tax dollars is legally permissible through the legislative process. So ultimately this entire issue should be an eye opener to all Americans when Congress refuses to take action against members acting in this manner. They are all dirty and despicable.

The only thing we are left with for potential recourse is for the DoJ to produce evidence linking some sort of financial gain to Waters or her husband from all of these dirty dealings.

NotCoach on April 7, 2011 at 9:50 AM

Maxine was pretty riled up in that House hearing last week about Fannie and Freddie. She grilled the director of the FHFA about what the agency knew about Countrywide and its shakedown of Fannie to buy all of its bad subprime loans. There is some real smoke there if anyone wants to look into it.

rockmom on April 7, 2011 at 9:50 AM

Waters persuaded Treasury Secretary Hank Paulson to convene a Sept. 9 meeting but has said she was trying to help all minority banks punished by the stock devaluation — not specifically OneUnited.

Not a dimes worth of difference between the 2 parties.

darwin-t on April 7, 2011 at 9:51 AM

rickyricardo on April 7, 2011 at 9:44 AM

Why not just use your real name here, Mr. Friedman?

Bishop on April 7, 2011 at 9:51 AM

China has the right idea: politicians, regulators and corporate CEO’s who are guilty of corruption should be put up against a brick wall and shot.

rickyricardo on April 7, 2011 at 9:44 AM

China’s entire political system is corrupt as Hell. One party rule tends to do that. Only those who embarrass the regime are treated this way.

While we have our own set of money grubbing weasels to deal with, we still aren’t a one party system. As a result we are slightly less corrupt.

NotCoach on April 7, 2011 at 9:53 AM

One of Holder’s people in every way.

Hening on April 7, 2011 at 9:54 AM

Organized crime goes where the money is. That’s why having a super-big federal government is an even bigger disaster than you’d think. It’s not just the taxes. That kind of money attracts career criminals, who just what to skim the top off the three trillion coming in. Pretty soon you have millions of people who just want to skim the top off.

RBMN on April 7, 2011 at 9:49 AM

This.

Paul-Cincy on April 7, 2011 at 9:54 AM

…if the Department of Justice decides to take a closer look at the activities…

*cough* *gag* *sputter* *drool*

Jeebus, Ed! Are you trying to kill me!?

catmman on April 7, 2011 at 9:56 AM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

Unless there is someone in the Bush administration that DOJ can go after, I think this is a pipe dream.

Cindy Munford on April 7, 2011 at 9:57 AM

“…the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look…”

C’mon Ed, that’s a joke, right? I mean, it did make me laugh out loud. You do remember who calls the shots over at the so-called Department of Justice, don’t you? What are the odds that Eric Holder, Attorney General and Protector of New Black Panther thugs will even investigate let alone prosecute another member of his race who is also a Democrat?

novaculus on April 7, 2011 at 9:59 AM

There’s no longer a “justice department” int this country . . . now there is only the Eric Holder protective association for the oppressed and downtrodden.

rplat on April 7, 2011 at 10:00 AM

So we have a more lavish standard for federal intervention in financial institutions if they are “minority banks”. It’s like Double-A for financial institutions!

Really, why would this surprise anyone? How’s that investigation of why certain Chrysler and Government Motors dealerships were closed and some were kept open? Maybe that was Double-A as well?

slickwillie2001 on April 7, 2011 at 10:04 AM

Congressional Black Caucus was involved.

Chances of anything at all being done by Department of Justice?

Zero.

Bank on it.

coldwarrior on April 7, 2011 at 10:07 AM

if the Department of Justice decides to take a closer look

Holder? Hahahahahahaha! Gasp! Wheeze! Snort!

Yeah, Holder will get right on this.

GarandFan on April 7, 2011 at 10:08 AM

DRAIN THE SWAMP!

SDarchitect on April 7, 2011 at 10:09 AM

Also on the topic of Federal Investigations:

Sen. Chuck Grassley: Letting Guns Walk Across the Border Breeds Violence

Since January I’ve called upon the administration to come clean about its alleged policy that allows guns to “walk” across the border. So far my requests for answers have hit a stone wall at the ATF, the Justice Department, the Department of Homeland Security, ICE and Customs Border Protection.

When asked about the allegations that the ATF let guns “walk” across the border, the President said, “There may be a situation here in which a serious mistake was made. If that’s the case then we’ll find out and we’ll hold somebody accountable.” The executive branch has the Constitutional authority to execute the laws of the land, not trample on them. If the federal bureaucracy thumbs its nose at the rule of law and evades accountability, the violence along the southwest border will worsen the public trust. A government, especially a federal law enforcement agency, which acts above the law, undermines the rule of law.

Insert witty screen name here on April 7, 2011 at 10:10 AM

Holder won’t touch this with a 10 foot pole

cmsinaz on April 7, 2011 at 10:14 AM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

Thanks Ed, now I’ve got coffee spray to clean off of my monitor. Eric Holder and justice should never be used in the same sentence.

skeneogden on April 7, 2011 at 10:20 AM

cmsinaz on April 7, 2011 at 10:14 AM

Nor a Czech, nor a Slovak, either.

Holder has said enough, done enough, been involved in enough that in a sane time, he’d have been indicted, convicted and sentenced long long ago.

coldwarrior on April 7, 2011 at 10:20 AM

…if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

LOL. Obama`s Department of Justice with Holder in Charge??? Double – LOL.

albill on April 7, 2011 at 10:22 AM

This case, as well as dozens of others, could make for a good campaign tool for Republicans.. Elect us and we will make sure these criminals face justice; elect Obama and you buy these criminals a get out of jail free card.

Keemo on April 7, 2011 at 10:23 AM

We owe “them”. That is the attitude. Until people draw a line in the sand and say enough is enough this kind of fraud will continue. Next project is forcing the banks to give “them ” their mortgages free and clear. Why? Because banks are full of a bunch of rich white people.Watch for the Action Network to ramp this up. It will continue until enough people say No More.

Hummer53 on April 7, 2011 at 10:25 AM

Heh, coldwarrior

Tru dat re holder

cmsinaz on April 7, 2011 at 10:29 AM

Laughable. As if the Dancing Pretzel Clown known as Eric Holder is going to go after a demorat, much less one who fits the racial characteristics of ‘his people’.

There will be some useless wrist slap from the might Ethics Committee, and all will be forgiven for twit Maxine.

Bishop on April 7, 2011 at 9:38 AM

BANG. Democrats NEVER pay for their misdeeds.

fossten on April 7, 2011 at 10:30 AM

This is why you need an independent counsel. Anybody know where crr666 is?

Vince on April 7, 2011 at 10:33 AM

Why can’t the House Ethics Committe (or the Justice Department) pull the trigger on all these corruption charges in the House? No one ever seems to really get charged with anything…

Fallon on April 7, 2011 at 10:39 AM

Ah, yes…the Congressional Black Nitwit Caucus, operating on the fringe left edge of the Democrat party both from a left-right perspective and from a corruption measure.

This is the single most pathetic segment of the entire congress, and should be pursued on RICO charges, prosecuted and disbanded.

Jaibones on April 7, 2011 at 10:39 AM

Let it be shown that Holder’s DOBJ is a committee of the CBC.

Jaibones on April 7, 2011 at 10:40 AM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

And if Holder’s DOJ doesn’t pursue this travesty, it is just one more brick in the growing case against Holder. He has politicized the department beyond belief. “Justice” apparently has an agenda and is not blind.

onlineanalyst on April 7, 2011 at 10:41 AM

if the Department of Justice decides to take a closer look

The Department of Justice, under the outstanding leadership of Eric “The Cowardly Lion” Holder … you must be kidding

Maxine Waters is a person of (shitty) color

J_Crater on April 7, 2011 at 10:42 AM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

On Holder’s “to do list,” right after he gets up off his knees in front of O-Ding-A-Ling.

GrannyDee on April 7, 2011 at 10:42 AM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

No offense, Ed….but c’mon. Really? Do we really believe Holder or anyone in the department will do a thing about this? They let Rangle off the hook for tax fraud, yet how many now are being audited, and threatened with jail time for noncompliance? This case is going exactly where Maxine wants it to go. Nowhere!

capejasmine on April 7, 2011 at 10:48 AM

Forgive me for not adding, pray for the people in Japan.

GrannyDee on April 7, 2011 at 10:59 AM

why did Kevin Cohee buy $50 million in Fannie and Freddie bonds a few months before the collapse when it amounted to “130% of the bank’s core working capital,”

Someone should look into the relationship between Cohee, Waters, etc. and Franklin Raines, the one-time head of FM who walked away with over $90 million in compensation and “performance” bonuses (which he “earned” by fraudulently cooking the books at FM). Something tells me there’s more than a passing acquaintance there.

AZCoyote on April 7, 2011 at 11:01 AM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

I just love the tongue in cheek humor of these posts.

John Deaux on April 7, 2011 at 11:06 AM

coldwarrior on April 7, 2011 at 10:07 AM

Hmmmmmm. Would Obutthead not been a part of that black caucus when this went down? I do believe so. Hmmmmmmmmmm.

capejasmine on April 7, 2011 at 11:16 AM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

Yeah, ok…so that way, they can investigate the case, prosecute it, win, and then dimiss it altogether. And then they can investigate their investigation and declare it properly investigated!

Dopenstrange on April 7, 2011 at 11:23 AM

Why are you using a picture of Norbit’s Rasputia?

mrt721 on April 7, 2011 at 11:23 AM

What?? Another corrupt California Democrat??

No Way!

I guess “minority” banks aren’t evil. Who knew?

Tim_CA on April 7, 2011 at 11:24 AM

When people realize that this is their money these crooks are using to line the pockets of relatives, friends and donors/voters, maybe they’ll get tired of being robbed in the name of fairness and vote the bums out.

Kissmygrits on April 7, 2011 at 11:55 AM

capejasmine on April 7, 2011 at 11:16 AM

Oh, Yes. He was.

coldwarrior on April 7, 2011 at 11:56 AM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

I just love the tongue in cheek humor of these posts.

John Deaux on April 7, 2011 at 11:06 AM

I guess Ed is picking up on posters’ recent discussions on the necessity of the /s formality.

slickwillie2001 on April 7, 2011 at 12:07 PM

Considering that Maxine Waters is one of Eric Holder’s ‘people’, I doubt the Justice Department will address the charges against her seriously.

zoyclem on April 7, 2011 at 12:08 PM

This case, as well as dozens of others, could make for a good campaign tool for Republicans.. Elect us and we will make sure these criminals face justice; elect Obama and you buy these criminals a get out of jail free card.

Keemo on April 7, 2011 at 10:23 AM

Yes! (not “We Can”….but “We Damn Well Better”)

redwhiteblue on April 7, 2011 at 12:10 PM

8ffirmative action…

… you just have to luv it!

Seven Percent Solution on April 7, 2011 at 12:11 PM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

I don’t see the Holder DoJ doing anything with this other than figuring out how to bury it. Take the New Black Panther case for example.

dogsoldier on April 7, 2011 at 12:55 PM

I’m expecting at least 3000 pages of last-minute presidential pardons when Obama finally leaves town…

landlines on April 7, 2011 at 3:05 PM

LOL, good one, Ed. not to worry, Eric Holder has her back.

rbj on April 7, 2011 at 9:38 AM

Eric Holder is her back.

Schadenfreude on April 7, 2011 at 3:22 PM

Maxine I think we should nationalize…. or no federalize your incarceration in Ft. Leavenworth.

tim c on April 7, 2011 at 3:22 PM

We all know that the Department of Justice, under the outstanding leadership of Eric “The Cowardly Lion” Holder, will do nothing with this case because corruption runs so deep in DC that they put in public water just to make sure that nobody drills down and finds it.

J_Crater on April 7, 2011 at 4:36 PM

NO! Maxine Waters? No way! REALLY? SOmebody made a mistake somewhere I’m SURE of it.. I mean.. Maxine? OMG! She’s just so.. so.. I mean, she’s part of that bastion of great works the CBC!!!

NOOOOOOOOOOOOooooooooooooo!!

Nooooooooo!

nnnnnnnnooooooooooooooooooooooooooooooooooooooooooooo!

/s

44Magnum on April 7, 2011 at 5:20 PM

How does a woman that stupid have a husband that has $50 million to invest in Fannie/Freddie? I’m guessing that he’s no rocket scientist either so I’m also guessing corruption somewhere.

Big John on April 7, 2011 at 6:46 PM

Oops, misread. It was someone else with the 50 mil. My bad but my guess about corruption stands…

Big John on April 7, 2011 at 6:47 PM

This case isn’t going away, and the ethics committee might be the least of Waters’ problems if the Department of Justice decides to take a closer look at the activities surrounding OneUnited.

Mwaaahhh hahahahahahahahahaha. Right, like that’s gonna happen.

Big John on April 7, 2011 at 6:52 PM

How does a woman that stupid have a husband that has $50 million to invest in Fannie/Freddie? I’m guessing that he’s no rocket scientist either so I’m also guessing corruption somewhere.

Big John on April 7, 2011 at 6:46 PM

Has the crack cocaine market in South Central locked up. (This is why Maxie was sooo angry over a decade ago when she claimed the CIA was bringing crack cocaine into South Central. San Jose Mercury News did an “expose” on it that later proved to be made up out of whole cloth.)

coldwarrior on April 7, 2011 at 7:14 PM

coldwarrior on April 7, 2011 at 7:14 PM

Forgot the “sarc” tag.

coldwarrior on April 7, 2011 at 7:15 PM

For instance, why did Kevin Cohee buy $50 million in Fannie and Freddie bonds a few months before the collapse when it amounted to “130% of the bank’s core working capital,”

Well, if you happen to know that your bank is in trouble and is probably going to go under anyway, and if a little birdie tells you that the GSEs are in trouble and likely to go under. And if your bank is made to appear to go under by the failure of the GSEs then maybe the government might just bail you out.

It is sort of like having an underwater mortgage and unable to make your payments but being able to move your house in the path of a tornado so you can get bailed out by the insurance payoff before you are foreclosed on.

That investment was doing just that, moving the bank into the path of a financial tornado in order to obtain federal bailout funds.

crosspatch on April 7, 2011 at 10:40 PM