Thursday, August 05, 2010
Earl Ofari Hutchinson
Embattled California Congresswoman Maxine Waters took a bold and virtually unprecedented step. She challenged the House Ethics Committee to fully release the entire report on her alleged ethics violation. The charge is that Waters used her influence to get the Treasury to funnel $12 million to a bank that her husband once sat on the board of directors of and had stock in. This violated the House code of conduct rule that states: Members ‘‘may not permit compensation to accrue to the beneficial interest of such individual from any source, the receipt of which would occur by virtue of influence improperly exerted from the position of such individual in Congress.’’
Waters’ challenge is unprecedented for two troubling reasons. The Ethics committee wraps its investigations in a thick cloud of secrecy. It literally takes an act of Congress to get the committee to publicly reveal the details of the case it makes against one of its own. That’s the case again with Waters. The committee completed its investigation, and published its eyes only report in August 2009.
The second reason Waters made the demand for full disclosure is more troubling. There is no smoking gun proof that she did anything wrong. This writer received a copy of the eighty page report. The report contains a summary of the allegation, a jurisdictional statement, procedural history, and a summary of investigative activity. There are eighteen exhibits of memos, affidavits, testimony and interviews with Waters and the other principals involved.
The committee interviewed Waters in June, 2009. She admitted that she called then Treasury Secretary Henry M. Paulson and asked for a meeting with the National Bankers Assn. The Association is the trade association for the nation’s 103 minority and women-owned banks. Waters requested that Robert Cooper, NBA President-Elect supply her with “talking points” to explain the purpose of the meeting. The meeting focused solely on the government takeover of Fannie Mae and Freddie Mac and the severe financial impact the takeover had on the minority banks. She did not say who should attend, or the meeting agenda. No member of her staff attended.
The report makes clear that the only financial interest Waters had in One United Bank was investment income deposited five years ago. She disclosed that in her financial disclosure statement. Waters was asked why she did not attend the meeting with Treasury, she stated “Why should , I don’t think members normally do that The NBA are their own best advocates, let them tell their own story, that’s how I see it.” Waters chairs the House Financial Services Subcommittee. The ethics committee acknowledged that in that capacity she talked with Paulson frequently on issues involving the bank bailout, minority investment banks, money managers, and toxic assets.
Treasury officials routinely testify before her subcommittee. The committee noted that Water’s husband had resigned his position on the board of One United five months before the meeting between Paulson and the NBA in September 2008. The subsequent letters, memos and correspondence between Waters office and the NBA essentially confirm that a meeting was requested, the NBA officials did attend, and that her office was informed of the meeting.
The committee interviewed Paulson in April, 2009. He detailed the circumstances that led to the takeover of Fannie Mae and Freddie Mac and the financial impact and confusion it caused. Paulson said that he received 70 and 80 calls a day from banks, and financial industry groups about the takeover. Waters’ call was one of them. Paulson was adamant that Waters did not “mention a particular bank” when she requested the meeting. Paulson quickly added that “even if she had mentioned that she had a personal financial interest in One United Bank that he would still have granted the meeting. He considered the request reasonable and non-partisan.
The same month the committee interviewed Congressman Barney Frank. Frank flatly said that he had frequent dealings with the NBA, and that One United Bank “was never a major presence.” When he thought of NBA “he thought of southern banks and not One United.” In December One United got $12 million in TARP funds, but Frank, who chairs the House financial-services committee, said it had nothing to do with Waters intervention. Franks wrote a provision in the federal bailout legislation that was specifically designed to aid One United. Frank has said he inserted it because One United was the only African-American owned bank in his home state, Masschusetts. In an earlier interview, he made it clear that Waters’ interest "had zero impact on the outcome because I would have done it anyway."
The actual committee report reveals in full detail that Waters did not profit from or influence decisions the Treasury made to help One United Bank, or any other minority bank. But the damage has been done. Waters is now firmly imprinted in the media and public mind as the poster politician for congressional corruption. She’s black, high profile, a ranking Democrat, and outspoken. That instantly made her an inviting target to dump on the political hot seat. The release of the full report should, but won’t change that.
Earl Ofari Hutchinson is an author and political analyst. He hosts a nationally broadcast political affairs radio talk show on Pacifica and KTYM Radio Los Angeles.
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