Lawmakers Lobby for Local Help Under TARP
The Hill has a great piece this morning revealing how some powerful Democrats have lobbied the Federal Deposit Insurance Corporation urging bailout funds for banks in the lawmakers’ home states.
Senate Majority Leader Harry Reid (D-Nev.), for example, wrote a letter in December asking the FDIC to “give appropriate consideration” to Neveda Security Bank’s request for roughly $15 million in TARP funds, The Hill reports. (The application is pending.)
There were other similar instances, The Hill found.
Like Reid, Sen. Carl Levin (D-Mich.) alerted FDIC to TARP applications by two Michigan banks. In letters to [FDIC Chairwoman Shiela] Bair sent in early December, Levin asked the banking regulator to give “due and prompt consideration” to applications by Flagstar Bank and Citizens First Bancorp … Flagstar received $267 million in TARP funds on Jan. 30.
Then-Sen. Ken Salazar (D-Col.), who’s now secretary of the Interior Department, joined the lobbying as well, urging the FDIC to help Colorado’s New Frontier Bank, according to The Hill.
A Dec. 19 e-mail from a Salazar aide to the FDIC asked the agency to give New Frontier’s TARP application “full and fair consideration” after the bank performed several write-downs to qualify.
Reid spokesman Jim Manley defended the practice of lawmakers urging TARP funds for local banks, telling The Hill that “it is well-established that senators may aid their constituents in matters before executive-branch and independent agencies.”
But Steve Ellis, vice president of Taxpayers for Common Sense, has a different read. “The veiled language in these letters here,” Ellis told The Hill, “is an attempt to influence the actions of FDIC to bail out banks that may or may not need to be bailed out.”
Tomato, tomahto. Or not.