Tales from Bailout Nation Pt. III

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.

Now, who do you suppose might have been behind this totally unexpected gift of largesse from the TARP program? Think Massachusetts. Think big shot of the House Financial Services Committee but most of all think Congressman that was at the epicenter of this financial meltdown in the first place.









Yep, you got it.



Our old pal Barney Frank who was instrumental in crafting the TARP bill language included a narrowly-worded provision aimed at helping this particular home-state bank.

Additionally, Frank lobbied on behalf of OneUnited to its federal regulator who with other regulators are charged with providing data and recommendations to the Treasury Department where the final decision on who does and does not get the “golden tap on the shoulder”.

There is virtually zero transparency in this program and the Treasury Dept. won’t divulge the mechanisms by which they determine the outlay of TARP money.

Dear readers, allowing for a momentary suspension of reality, please tell us how the proposed $825 billion Great Stumble Sideways stimulus package will be administered in any other fashion. We truly believe President Obama does want the GSS to be doled-out in a completely open and judicious fashion but his noble vision that would do Tom Joad proud just doesn’t square with the reality of patronage, power-mongering and outright corruption that exists on Capitol Hill.

And for those of you who believe that many on the Hill, particularly in leadership positions, don’t think of Obama, despite the (D) that they share, as just some piker that can be rolled, you’ve got another thing coming.