A struggling Hawaiian bank received $135 million in bailout funding in January after the office of a U.S. Senator with large stock holdings in the company called federal regulators.
Central Pacific Financial Corp. "was an unlikely candidate" for assistance under the Troubled Asset Relief Program by the time the Federal Deposit Insurance Corp. received a phone call from the office of Sen. Daniel Inouye, according to a joint report by the Washington Post and Propublica.org.
According to the report, Central Pacific Financial was suffering significant capital losses and had already received a preliminary rejection from the FDIC, which forwarded the application to an office focused in resolving "marginal cases." But two weeks after the call from Inouye's office, the FDIC approved the bank for funding.
The senator's financial disclosure forms show that at the end of 2007 he held Central Pacific shares worth $350,000 to $700,000. That stock amounted to at least two-thirds of his total reported assets. The Honolulu-based company's shares have lost almost 80 percent of their value since then.
Experts told the Post and ProPublica that the phone call did not violate any laws.
But the matter recalls a similar incident with a California bank and Los Angeles congresswoman Maxine Waters. As BailoutSleuth has reported, Rep. Waters repeatedly contacted the Treasury Department about OneUnited's problems and later arranged a meeting between regulators and a bank executive during which the latter "seized the opportunity to plead for special assistance for his bank."
OneUnited later received $12 million in TARP funding. At the time, Rep. Waters' husband owned OneUnited shares worth $250,000 to $500,000. According to a report in the Wall Street Journal, he had received "interest payments from a separate holding at the bank, also worth between $250,000 and $500,000.''
Central Pacific Financial Corp. "was an unlikely candidate" for assistance under the Troubled Asset Relief Program by the time the Federal Deposit Insurance Corp. received a phone call from the office of Sen. Daniel Inouye, according to a joint report by the Washington Post and Propublica.org.
According to the report, Central Pacific Financial was suffering significant capital losses and had already received a preliminary rejection from the FDIC, which forwarded the application to an office focused in resolving "marginal cases." But two weeks after the call from Inouye's office, the FDIC approved the bank for funding.
The senator's financial disclosure forms show that at the end of 2007 he held Central Pacific shares worth $350,000 to $700,000. That stock amounted to at least two-thirds of his total reported assets. The Honolulu-based company's shares have lost almost 80 percent of their value since then.
Experts told the Post and ProPublica that the phone call did not violate any laws.
But the matter recalls a similar incident with a California bank and Los Angeles congresswoman Maxine Waters. As BailoutSleuth has reported, Rep. Waters repeatedly contacted the Treasury Department about OneUnited's problems and later arranged a meeting between regulators and a bank executive during which the latter "seized the opportunity to plead for special assistance for his bank."
OneUnited later received $12 million in TARP funding. At the time, Rep. Waters' husband owned OneUnited shares worth $250,000 to $500,000. According to a report in the Wall Street Journal, he had received "interest payments from a separate holding at the bank, also worth between $250,000 and $500,000.''
published July 1, 2009, 0 Comments
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