Congress Rewarding Campaign Supporters

As you might have expected, when the Congress got its collective hands on over a half-trillion dollars of federal money, it didn't take the members of that distinguished body very long to distribute a few million bucks to their political allies. As a case in point, consider the good fortunes of Boston's OneUnited Bank.

The Wall Street Journal and the Weekly Guardian (UK) report that in December, 2008, OneUnited received a $12 million boost from the Treasury's Troubled Asset Relief Program, or TARP (Public Law 110-343-Oct. 3, 2008; 122 Stat. 3765), despite having been served with a "Cease and Desist Order" from the Federal Deposit Insurance Corporation and the Massachusetts Division of Banks less than a month earlier.

In that Order, which can be read at this link, OneUnited Bank did not dispute findings that it had "engaged in unsafe or unsound banking practices and violations of law" including "... the payment of excessive compensation, fees and benefits to its senior executive officers... operating without an effective loan documentation program... and engaging in speculative investment practices."

According to stories appearing in the Boston Business Journal the FDIC ordered OneUnited to sell all bank-owned automobiles, including a 2008 Porsche SUV that is registered at the address of OneUnited CEO Kevin Cohee. OneUnited was also ordered to stop paying for a beachfront house in Santa Monica, CA that was purchased for more than $6 million in 2007 by a California-registered Limited Liability Company (LLC) that includes Cohee and his wife Teri Williams, OneUnited Bank's president.

OneUnited would have been excluded from participation in TARP had it not been for the "foresight" of House Finance Committee Chairman Barney Frank (D-MA), who inserted a clause into the law that specifically included minority-owned banks with less than $1 billion of assets, that had been well-capitalized as of June 30, that served low- and moderate-income areas, and that had taken a capital loss in the federal seizure of Fannie Mae and Freddie Mac. According to one observer, such a provision would have excluded every bank in the State of Massachusetts except OneUnited.

As of January 20, 2009, the price tag for the ongoing government financial "bailouts" of "troubled" banks, credit unions, commercial lenders, and automakers stood at 800 billion dollars.

With such devoted guardians of the public interests as Barney Frank at the helm, the Treasury will have a hard time printing enough money to pay off those whose interests seem to outweigh those of the unwashed masses.