Rep. Maxine Waters (D-Los Angeles) today defended her efforts to help minority-owned banks -- including one with ties to her husband
- survive the financial crisis, and scoffed at the notion that she could sway the Bush administration's actions.
"Although both my supporters and detractors often refer to me as influential, the truth is that I had no influence on what Bush administration officials in the Treasury Department or other departments did," she said in a statement.
Waters, a senior member of the congressional committee that oversees banking, has come under scrutiny because OneUnited Bank received $12 million in bailout funds after she helped arrange a meeting between its representatives and those from others banks and Treasury officials. Waters' husband, Sidney Williams, had been a board member and stockholder of OneUnited.
Waters said that the National Bankers Assn., a trade group for minority-owned banks, sought the September meeting on behalf of its members.
"I followed up on the association's request by asking Treasury Secretary [Henry] Paulson to schedule such a meeting, as did other members of Congress," she said. She did not attend the meeting.
She added that the decision to provide bailout funds to OneUnited were "based on the merits of the bank's request, not based on anything said at the September meeting and not based on political influence."
"I maintain that my advocacy on behalf of small, women, minority and community banks is appropriate," she said.
Waters helped set up the meeting a month before Congress enacted the bailout program. "When a member of the financial services committee calls, you pay special attention," said Jeb Mason, who was a high-ranking Treasury official last fall.
He said that the September meeting was billed as a broad discussion by minority-owned banks of the problems they faced but that it ended up a discussion of one bank's problems. He said he only recently learned of Waters' husband's ties to OneUnited and would have liked to have known about them. He added, however, that the connection didn't influence the department.
OneUnited did not receive any federal money at that time, but by mid-December, it had received $12 million in bailout funds.
House Financial Services Committee Chairman Barney Frank (D-Mass.) said in an interview Thursday that he advised Waters last fall to "stay out of it" because he knew her husband had served on the bank board.
Frank said Waters was concerned about the plight of minority-owned banks, as was he.
"She acknowledged that 'Sidney had been on the board. I could have a conflict here,' " Frank said. "I said, 'Fine, just stay out of it, I'll deal with it.' "
Noting that OneUnited is based in Boston, he said, "I wasn't, as chairman of the banking committee, not going to do all I could to keep the only black-owned bank in my area alive."
Frank said he was unaware of any contacts Waters may have had with Treasury.
OneUnited Chief Executive Kevin Cohee and Treasury officials said the bank was scrutinized before it received any bailout money.
In late October, the bank's regulator, the Federal Deposit Insurance Corp., chastised the bank for being undercapitalized and operating in an overly risky manner. The agency also criticized the bank's "payment of excessive compensation, fees and benefits" to senior executives.
Cohee said his bank -- which was heavily invested in Fannie Mae and Freddie Mac -- received federal funds only after it strengthened itself.
It raised $20 million from private shareholders and passed muster with the FDIC, he said.
Treasury spokesman Andrew Williams declined to discuss details of how OneUnited received the bailout but said the award resulted from the same "strict procedure" followed in the Troubled Asset Relief Program.
Waters, a South Los Angeles political fixture who won election to the state Assembly in 1976 and to Congress in 1990, has previously come under scrutiny for activities that benefited her family financially.
The Los Angeles Times in 2004 reported that her family members made more than $1 million by doing business with companies, candidates and causes that the congresswoman helped.
Her husband is a former professional football linebacker turned Mercedes-Benz salesman, who in 1993 was named U.S. ambassador to the Bahamas by President Clinton.
Waters' most recent financial disclosure statement, filed in May, shows that her husband had two major investments in OneUnited Bank in 2007, each for $250,000 to $500,000.
One is a dividend-bearing investment, almost certainly stock in the bank, that returned dividends of $15,000 to $50,000 in 2007.
The other investment returned interest of $5,000 to $15,000, the statement shows, but does not further describe it.
Cohee contributed $4,000 to Waters' campaign fund between 2002 and 2005.
Rep. Maxine Waters defends work with banks - Los Angeles Times