Shock, Shock–Politics Infects Federal Bail-Out
Who would have imagined that the honorable Barney Frank, head of the House Financial Services Committee and chief culprit in the Fannie Mae/Freddie Mac disaster, would manipulate the bank bail-out for the benefit of his friends!?
Reports the Wall Street Journal:
Troubled OneUnited Bank in Boston didn’t look much like a candidate for aid from the Treasury Department’s bank bailout fund last fall.
The Treasury had said it would give money only to healthy banks, to jump-start lending. But OneUnited had seen most of its capital evaporate. Moreover, it was under attack from its regulators for allegations of poor lending practices and executive-pay abuses, including owning a Porsche for its executives’ use.
Nonetheless, in December OneUnited got a $12 million injection from the Treasury’s Troubled Asset Relief Program, or TARP. One apparent factor: the intercession of Rep. Barney Frank, the powerful head of the House Financial Services Committee.
Mr. Frank, by his own account, wrote into the TARP bill a provision specifically aimed at helping this particular home-state bank. And later, he acknowledges, he spoke to regulators urging that OneUnited be considered for a cash injection.
I am truly shocked, shocked to find politics going on on Capitol Hill!