Augean Stables

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Yet more scandals have surfaced about Democrats in Congress – you remember, the ones who ran on the solemn pledge to clean up corruption? And since most of the mainstream news media consist of people ideologically predisposed to cover up for those politicians, the stories were not widely reported.

First is yet another questionable real estate deal by Sen. Chris Dodd (D-CT). Dodd, who is already under investigation by the Senate Ethics Committee for sweetheart deals he got from Countrywide Mortgage while he was on the Senate Banking Committee pushing Freddie Mac and Fannie Mae to buy all those NINJA (No Income, No Job or Assets) loans. Dodd, along with Barney Frank in the House of Representatives, are the two people most responsible for the toxic mortgage bubble.

Well, in Dodd’s latest caper, it turns out that he purchased an estate in Ireland in partnership with one Mr. Edward Downe. This Downe pleaded guilty to securities fraud in the early 1990s and had to pay $11 million in civil penalties, along with taking a felony rap. (Downe was pardoned by President Clinton at the behest of Dodd in 2001.) In 1994, Downe’s business partner, William Kessinger, bought two-thirds of the estate (then valued at $160,000) with Dodd, Downe signing the deed as witness.

Kessinger sold his majority share to Dodd in 2002 for $122,3512, meaning that his gain was only slightly more than 2% per year for the time he held onto his share, at a time when Irish property was quadrupling in value. A cottage similar to the one Dodd now fully owns is now on sale at a price four times higher than Dodd’s highest declared appraisal (in his Senate financial disclosure documents). All very cozy indeed.

Turning next to the House of Representatives, we find that Rep. Maxine Waters (D-CA), who serves on the House Financial Services Committee, has had extensive ties to a bank in her district, OneUnited Bank, while also doing favors for it. The ties include her direct ownership of a quarter to a half million dollars of its stock, and her husband (Sidney Williams) owning a similar amount as well as serving on its board of directors (also receiving cash payments from the bank in the same range). Meanwhile, executives at the bank have donated over $12,000 to Waters’ election campaigns.

Waters has used her position to work on behalf of OneUnited, which through various acquisitions has grown to be (it claims) the largest African-American-owned bank in the country. She pushed regulators to prevent minority-owned banks from being taken over by “white-owned” banks, and pushed the FDIC to do the same. The particular focus of her ire was the fact that a “major white bank” based in Illinois (FBOP Bank) was trying to take over African-American- owned Independent Bank of Washington, DC, and another such bank, apparently Family Savings Bank of Los Angeles. It turns out that OneUnited had tried to take over both banks at various times. In 2002, after her intervention, FBOP Bank backed out of the acquisition and let OneUnited take over Family Savings Bank.

More recently, Waters made a call to the Treasury Department, urging it to provide capital for OneUnited, which lost most of its own capital when its investments in Freddie Mac and Fannie Mae evaporated, when they were taken over by the Feds. The Treasury Department did indeed wind up bailing out the bank with TARP money. All very cozy as well.

Neither of these stories made any news. After all, they don’t fit the mainstream-media metanarrative of altruistic, nay, noble leftist solons trying to combat the greed of Wall Street.

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