Rep. Maxine Waters: 'You don't use your chits for nothing'

The House Office of Standards of Conduct (“ethics committee”) has filed ethics charges against another dinosaur in the House of Representatives, the long-serving Rep. Maxine Waters (D-Calif.).

The 80-page Office of Congressional Ethics Report and Findings can be found in its entirety here.

Waters is charged with violations stemming from her actions in garnering special treatment for OneUnited Bank, an entity where Waters’ husband — at the time of her actions — had (according to Waters’ 2008 financial disclosure filing) two investments in OneUnited Bank estimated at a value of between $500,000 and $1 million.

In the Statement of Findings released by the ethics committee (on page 7), Waters admits she set up a meeting with then Treasury Secretary Henry Paulson:


13. In an interview with the OCE, Representative Waters stated that she called then Treasury Secretary Henry Paulson at the request of Mr. Robert Cooper and Mr. Kevin Cohee. At the time of the request, Mr. Cooper identified himself as the Chairman-elect of
the National Bankers Association  (NBA) and also as Vice-President and Senior Counsel for OneUnited. Mr. Cohee was one of the principle founders of OneUnited and the Chairman and CEO of the bank. Representative Waters stated that Mr. Cooper met her outside her office and asked her to contact Secretary Paulson and ask for a meeting. Either that day or the day after, Mr. Cohee came to the Representative’s office and reiterated Mr. Cooper’s request.

Waters requested and received a briefing document from OneUnited Bank so she could “speak intelligently” to Treasury Secretary Hank Paulson on behalf of the bank (the cover sheet of which is found on page 8).

The series of events leading up to the meeting that was granted by Secretary Paulson begins at the link (page 9).

The document says Paulson affirmed the meeting was presented as involving several banks not any single bank and says he was not informed of any financial interest in the bank held by Waters’ husband.  He also stated it was an “extraordinarily busy week” and the meeting would not have taken place unless Waters had requested it.

Waters confirmed the significance of the meeting, saying “you don’t use your chits for nothing, you call when there is an important issue.”

OneUnited Bank was the only bank independently represented at the meeting and emails provided by the ethics committee show OneUnited Bank directing who would attend the meeting.

The day after the meeting, a letter was sent to Treasury requesting a transfer of funds stating (from page 12):     

“… we emphasized that Treasury should provide… protection on an urgent basis to avert possible failure of one if not several of our institutions…” As OneUnited was the only bank represented at the meeting, the Board infers that the “one” bank referenced in the letter likely was OneUnited.

The letter also stated specifically part of the deal requested would be to bail out the preferred stock.  Again from the Statement of Findings (page 12 with the actual letter on page 13)

The Board also takes note of language that indicates a request was made for a transfer of funds from the Treasury to the affected bank, including the specific request that Treasury would redeem the GSE preferred stock…’’ and the characterization of this redemption as “… not significant to the government in absolute dollar terms.”

At the time, Waters’ husband owned investments in OneUnited Bank again found on her 2008 financial disclosure form with an estimated value between $500,000 and $1 million.

Under House Rule 23, clause 3, Members “may not permit compensation to accrue to the beneficial interest of such individual from any source, the receipt of which would occur by virtue of influence improperly exerted from the position of such individual in Congress.”

According to the New York Times in December of 2008 OneUnited Bank received $12 million in bailout funds.