Waters Faces Ethics Trial Over Bank Bailout

Rep. Maxine Waters (D-Calif.) will face a House ethics trial over allegations that she intervened to encourage the bailout of a bank her husband owned stock in. Waters sits on the House Financial Services Committee, and is the head of its housing and community opportunity subcommittee.

The allegations have percolated for months. In March, The Wall Street Journal reported that Waters, against the advice of Rep. Barney Frank (D-Mass.), the head of the House Financial Services Committee, had boosted the bank and called the Treasury Department on its behalf:

When Rep. Barney Frank was looking to aid a Boston-based lender last fall, the Massachusetts Democrat urged Maxine Waters, a colleague on the House Financial Services Committee, to “stay out of it,” he says. The reason: Ms. Waters, a longtime congresswoman from California, had close ties to the minority-owned institution, OneUnited Bank.

Ms. Waters and her husband have both held financial stakes in the bank. Until recently, her husband was a director. At the same time, Ms. Waters has publicly boosted OneUnited’s executives and criticized its government regulators during congressional hearings. Last fall, she helped secure the bank a meeting with Treasury officials.

When Waters called, her husband no longer sat on OneUnited’s board, but did hold its stock. Waters has vocally supported the minority-owned bank, which got into financial trouble due to its holding of Fannie Mae and Freddie Mac stock. It eventually received funds from the Troubled Asset Relief Program. OneUnited executives have given $12,500 to Waters’s election campaigns, the Wall Street Journal says.

Waters has reportedly elected to go through an ethics trial, like Rep. Charles Rangel (D-N.Y.), rather than accepting the charges. The trial will take place around the time of the midterm elections.