The House Ethics Committee released their report today charging Rep. Maxine Waters, D-Calif., with three ethical violations for her involvement in getting the OneUnited Bank a $12 million TARP bailout. The time line of events established by the report paints a damning picture, suggesting Waters’ used her influence as a member of Congress to personally enrich herself at taxpayer expense.
According to the report, Waters’ Husband was on the board of directors from January 2004 to April 2008. As of June 30, 2008 her husband owned almost 4,000 shares of OneUnited stock then worth $350,000. The stock accounted for somewhere between 4.6 percent and 15.2 percent of their combined net worth. OneUnited was heavily invested in Fannie Mae and Freddie Mac preferred stock and the value of that stock fell dramatically when the two government-sponsored entities were placed in a government conservatorship on September 7, 2008. By September 30, 2008 the value of the stock held by Waters’ husband had fallen to $175,000.
According to the report, “sometime around” September 7, Kevin Cohee, CEO and Chairman of the Board of OneUnited, contacted Waters and asked for a meeting with Treasury Department officials. (The ethics committee report also notes that Waters and Cohee were “familiar,” as Cohee had hosted a fundraiser for Waters at his home.) Waters called Treasury Secretary Henry Paulson, and Paulson granted Waters’ request for a meeting. On September 9, Cohee, Robert Cooper, Senior Counsel with OneUnited, and Mikael Moore, Waters’ Chief of Staff and Grandson, met with Treasury officials. At the meeting, Cohee and Cooper requested $50 million from the Treasury Department to make up for losses as a result of the conservatorship. The Treasury Department “lacked the legislative authority” to grant such a request.
On September 19, 2008 Moore sent an email to a member of the staff of Rep. Barney Frank, D-Mass., chairman of the House banking committee alerting Frank’s office to OneUnited’s need for money. Starting on September 20, Moore exchanged a flurry of emails with OneUnited’s Cohee and Cooper relating to drafts of legislative provisions that would give the Treasury Department the authority to help out OneUnited. On October 3, the TARP program was signed into law containing a special provision for OneUnited’s benefit. On December 19, 2008 OneUnited received $12,063,000 in TARP funding from the Treasury Department.
According to the report, “If OneUnited had not received this funding, [Waters'] husband’s financial interest in OneUnited would have been worthless.”
Waters is accused of violating three congressional ethics rules.