Paul Jacob

Fighting three ethics charges, Congresswoman Maxine Waters now performs her most important public service, illustrating modern national governance in a way that is clear and easy to understand.

The ethics counts stem from Waters’s official actions, and those of her congressional office, in helping OneUnited Bank snatch up $12 million in TARP funds. Back in September 2008, with her husband’s investment in OneUnited nose-diving from about $350,000 to $175,000 — and with a very real possibility that the bank would go belly up, making the remaining investment worthless — Congresswoman Waters called then Treasury Secretary Hank Paulson to set up a meeting between Treasury officials and representatives of OneUnited.

Though, please understand, this is where the various accounts of the story diverge. Waters claims she sought to set up a meeting between Treasury and the National Bankers Association, a trade group for banks owned by women and minorities. But the House Ethics committee didn’t buy that rationale considering that only representatives of OneUnited Bank showed up for the meeting. Moreover, the meeting seems to have been squarely centered around a request for the Treasury Department to bailout OneUnited to the tune of $50 million.

At least some of OneUnited’s difficulty was caused by the bank’s investment in Fannie Mae and Freddie Mac, which just days before Rep. Waters’s call had been announced as going into receivership. Waters has been a strong Fannie and Freddie booster and years ago pooh-poohed arguments that the two Congress-created financial institutions were in trouble.

The meeting with Treasury did not result in any bailout for OneUnited, as there was no legislative authority for such a bailout. Yet. But TARP was coming and Waters’s Chief of Staff Mikael Moore (also her grandson) continued to communicate back and forth with OneUnited’s CEO and House Financial Services Committee Chair Barney Frank. At one point, Moore shared draft language for TARP legislation prepared by the Treasury with OneUnited officials.

Paul Jacob

Paul Jacob is President of Citizens in Charge Foundation and Citizens in Charge. His daily Common Sense commentary appears on the Web and via e-mail.