Democratic Rep. Maxine Waters of California is notorious for her high-decibel rants against corporate executives and career exploitation of identity politics. Class warfare and racial division are her two-decade-long stock and trade. She would normally be first in line (and in front of the cameras) to lambaste the very kind of Porsche-driving, luxury beach house-partying bank officials who begged her for a government handout. If they were white, that is.
But the minority fat cats who lobbied her during the fall 2008 financial meltdown represented the black-owned OneUnited Bank. They were her longtime friends, donors and fundraisers. Her husband was an investor in one of the banks that merged into OneUnited. He later served on the company's board of directors. Both Woman of the People Waters and her hubby have owned six-figure sums of OneUnited stock at various times over the past six years. Mr. Waters remained a OneUnited stockholder at the time Rep. Waters went to bat for the company. However, that indelible conflict-of-interest odor didn't stop her from intervening to arrange a high-powered meeting between OneUnited and then-Treasury Secretary Hank Paulson and 20 of his minions, who engineered a special federal rescue of the teetering company behind closed doors.
The taxpayer price tag of this textbook case of cronyism of color? Twelve million dollars in TARP bank bailout cash.
On Monday night, the House Ethics Committee filed three charges against Waters for using her influence to gain special favors for a woefully mismanaged financial institution run by politically correct suits living high on the hog. In a nutshell: OneUnited, a "minority depository institution," was seeking a stealth government bailout after squandering nearly $52 million of its bank capital on Fannie Mae and Freddie Mac preferred stock.
After the federal bailout of those troubled financial behemoths, OneUnited's securities in the government-sponsored enterprises plunged to a value estimated at less than $5 million. OneUnited initially demanded $41 million from the feds in exchange for unloading the junk stock. Truth be told, the bank was already in dire straits before the feds put Fannie/Freddie into receivership. Regulators criticized its unsound lending practices and lavish executive benefits (including fancy sports cars and a $6.4 million Santa Monica, Calif., beach house).