Thursday, May 20, 2010

ShoreBank rescue prompts call for congressional probe

Two top Republicans on the U.S. House Financial Services Committee, including U.S. Rep. Judy Biggert, R-Hinsdale, wrote a letter to President Barack Obama demanding records pertaining to any administration involvement in the $140-million Wall Street bailout of ShoreBank Corp.

“Some believe that ShoreBank was really saved because of an assumption that high-ranking officials in the Obama administration favored a bailout of this failing institution with deep political ties,” said the May 19 letter by U.S. Rep. Spencer Bachus, R-Ala., and Ms. Biggert. “The administration’s perceived involvement raises very serious questions as to whether the federal government is facilitating the rescue of a politically connected hometown bank when hundreds of others are forced to close.”

Mr. Bachus is the senior Republican on the Financial Services Committee, which oversees banking laws, while Ms. Biggert is the top GOP member on the committee’s subcommittee on oversight and investigations.
A perception has fueled by anonymous comments from Wall Street sources to other publications that Goldman Sachs and other recipients of federal aid in the immediate aftermath of the financial crisis acted knowing that the administration favored a rescue of ShoreBank.

ShoreBank’s leaders, most of whom live in the Obamas’ home neighborhood of Hyde Park, long have had a personal relationship with the president, going back to when he was a state senator.

Mr. Bachus and Ms. Biggert requested that the White House provide all records of communication relating to the ShoreBank negotiations, including with Goldman Sachs CEO Lloyd Blankfein and Eugene Ludwig, a former ShoreBank board member and head of Promontory Financial Group, a Washington, D.C., consultancy that assisted ShoreBank.
I suppose there are those who think that ShoreBank has connections. The rescue from Wall Street may not be considered genuine!

Via Newsalert!

1 comment:

  1. What some may call political connections, others may think of as "good will" (both in the accounting and in the karmic sense). Shore Bank has a reputation and value that reach beyond its balance sheet, but it didn't get that from name-dropping and cronying up to people in power. It got that way by hard work and doing a lot of good on behalf of people not in power. If any Wall Street bankers felt pressure to lend a hand, it's not surprising they attribute that to Obama. He's a convenient, visible target, and far more recognizable, to most of them, than their conscience.


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