A steady stream of disturbing facts are becoming public about the $700 billion Troubled Asset Relief Program conceived by former Treasury Secretary Henry Paulson during George W. Bush’s last year and approved in 2008 by the Democratic Congress. The program also has been championed by President Obama since he assumed the Oval Office in 2009. The emerging picture is not a pretty one, however, because it illustrates yet again that politicians cannot resist the temptation of using tax dollars to advance their personal political interests.
Judicial Watch recently obtained via the Freedom of Information Act a series of internal e-mails generated during the Paulson era at Treasury that document efforts to help a troubled bank by House Financial Services Committee Chairman Barney Frank, D-Mass., and Rep. Maxine Waters, D-Calif., who chairs the panel’s subcommittee on housing and community opportunity. Funds from the TARP program were supposed to be used to jump-start lending by healthy banks. But One United Bank, a troubled minority-owned bank headquartered in Frank’s district, got a $12 million infusion of tax dollars. Frank has been vague about his role in securing those funds for One United Bank, telling the Wall Street Journal last year that he spoke to somebody at Treasury about it, but couldn’t recall that official’s name. The e-mails obtained by Judicial Watch clear up that mystery — Frank spoke on multiple occasions to Paulson about One United Bank. The e-mails obtained by Judicial Watch also reveal that Waters lobbied Treasury on behalf of One United Bank as well, a fact that raised eyebrows within Treasury because the California congresswoman’s husband was at the time on the bank’s board of directors.
To be fair, neither Frank nor Waters got campaign contributions from One United Bank executives. And Frank has been open about his authorship of a TARP provision that enabled funding to be made available to One United Bank. The bank’s problems were caused in large part by its extensive investments in Fannie Mae and Freddie Mac, which lost value when those scandal-plagued institutions were nationalized. “I did feel that it was important to frankly try and save them since it was federal action that put them into the dumper,” Frank told the Journal. Still, TARP’s avowed purpose was to help healthy banks resume lending following the economic meltdown of 2008; it was never meant to become a congressional slush fund. Or was it? It’s time for Treasury to disclose all records about all contacts it has received from congressmen concerning the distribution of TARP funds. Anything less than full disclosure will fuel more public worries about possible cover-ups.
