Obama '08?

Political Interference Seen in Bank Bailout Decisions
Barney Frank Goes to Bat for Lender, and It Gets an Infusion

By DAMIAN PALETTA and DAVID ENRICH

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. One apparent factor: the intercession of Rep. Barney Frank, the powerful head of the House Financial Services Committee.

Mr. Frank, by his own account, wrote into the TARP bill a provision specifically aimed at helping this particular home-state bank. And later, he acknowledges, he spoke to regulators urging that OneUnited be considered for a cash injection.

Rep. Barney Frank (D., Mass.), seen here leaving a December news conference, urged regulators to consider TARP money for a local bank.
The Washington Times /Landov

Rep. Barney Frank (D., Mass.), seen here leaving a December news conference, urged regulators to consider TARP money for a local bank.
Rep. Barney Frank (D., Mass.), seen here leaving a December news conference, urged regulators to consider TARP money for a local bank.
Rep. Barney Frank (D., Mass.), seen here leaving a December news conference, urged regulators to consider TARP money for a local bank.

As President Barack Obama's team sets about revising the $700 billion TARP program, following last week's release of the second half of the money, among the issues it faces is widespread dissatisfaction with way the program has been implemented. Treasury Secretary nominee Timothy Geithner, testifying Wednesday at his Senate confirmation hearing, acknowledged "there are serious concerns about transparency and accountability...confusion about the goals of the program, and a deep skepticism about whether we are using the taxpayers' money wisely."

July 20, 2009
TARP cop: Get tough on banks
Posted: July 20th, 2009 06:11 PM ET

From CNNMoney.com Senior Writer Jennifer Liberto

WASHINGTON (CNNMoney.com) " The top cop tracking the $700 billion bailout program said Monday that he's concerned federal officials are ignoring his proposals for preventing tax dollars from being wasted or pilfered.

Neil Barofsky, the special inspector general overseeing the Troubled Asset Relief Program, released a 260-page report detailing a long list of concerns about government efforts to prop up hundreds of banks, Wall Street firms and auto companies.

The report criticizes the Treasury Department the most for its unwillingness to adopt some of his recommendations.

Barofsky cites two examples: He wants Treasury to force bailout recipients to keep track of how exactly they are spending TARP funds. He also wants officials to erect a "firewall" to prevent private investment managers " the kind hired to manage and invest taxpayer dollars " from taking advantage of insider knowledge.

"Although Treasury has taken some steps towards improving transparency in TARP programs, it has repeatedly failed to adopt recommendations that SIGTARP believes are essential to providing basic transparency and fulfill Treasury's stated commitment to implement TARP 'with the highest degree of accountability and transparency possible,' " the report stated.

cicerone imposter wrote:

(H)e's hiding too much **** including keeping secret which banks got bailout funds. From what I understand, they're not sharing that info, because they're afraid they'll have runs on those smaller banks...

Where does this **** come from? I follow the banking industry closely and I can't find a source for the "keeping secret" claim. Can you? Thank you.

Obama Requests That Paterson Drop Campaign
Published: September 19, 2009
WASHINGTON " President Obama has sent a request to Gov. David A. Paterson that he withdraw from the New York governor’s race, fearing that Mr. Paterson cannot recover from his dismal political standing, according to two senior administration officials and a New York Democratic operative with direct knowledge of the situation.

The decision to ask Mr. Paterson to step aside was proposed by political advisers to Mr. Obama, but approved by the president himself, one of the administration officials said.

“Is there concern about the situation in New York? Absolutely,” the second administration official said Saturday evening. “Has that concern been conveyed to the governor? Yes.”

The administration officials and the Democratic operative spoke on condition of anonymity because the discussions with the governor were intended to be confidential.

The president’s request was conveyed to the Mr. Paterson by Representative Gregory W. Meeks, a Queens Democrat, who has developed a strong relationship with the Obama administration, they said.

The move against a sitting Democratic governor represents an extraordinary intervention into a state political race by the president, and is a delicate one, given that Mr. Paterson is one of only two African-American governors in the nation.

PRESIDENT OBAMA: Well, look" David, here's what I'm saying. I" I" I think that" the media loves to have a conversation about race. I mean, the" this is" is catnip to" to" the media because it is a running thread in American history that's very powerful. And it invokes some very strong emotions.

I'm not saying that race " never matters in" in any of these" public debates that we have. What I'm saying is this debate that's taking place is not about race, it's about people being worried about" how our government should operate.

Now, I think a lot of those folks on the other side are wrong. I think that they have entirely mischaracterized the nature of our efforts. And I think it's important that we stay focused on solving problems as opposed to plucking out a sentence here or a comment there. And then the entire debate, which should be about how do we make sure middle class families have secure health care, doesn't get consumed by" other things.



DAVID GREGORY: In that vein, House Speaker Pelosi worried about the opposition, the tone of it, perhaps, leading to violence as it did in the 70s. There's more recent examples of antigovernment violence" occurring even in the mid 90s. Do you worry about that?

PRESIDENT OBAMA: Well, look" I think that we have an obligation in Washington, as leaders, to make sure that we are sending a strong message. That we can disagree without being disagreeable. Without" you know, questioning each other's motives. When we start caricaturing the other side" I think that's a problem.

And" unfortunately, we've got, as I've said before, a 24-hour news cycle where what gets you on the news is controversy. What gets you on the news is the extreme statement. The easiest way to get 15 minutes on the news, or your 15 minutes of fame, is to be rude.

And that's" that's" something that I think has to change. And it starts with me. And I've tried to make sure that I've sent a clear signal. And I've tried to maintain an approach that says, look, we can have some serious disagreements but, at the end of the day, I'm assuming that you want the best for America just like I do.