Congresswoman Maxine Waters
Last month, the committee that serves as the “ethics cop” for the House of Representatives launched new investigations.
It’s looking into several members of Congress, including Long Beach’s Laura Richardson and L.A.’s Maxine Waters. The Richardson case involves a house that was in foreclosure. The Waters case involves the Treasury Department, federal bailout money, and a bank in L.A.
In the second part of her series on congressional ethics, KPCC’s Washington Correspondent Kitty Felde examines the Maxine Waters case.
Last fall, banks in the U.S. were in deep trouble. Congress approved billions in bailout money to keep many of them from failure. That’s about the time a Treasury official said he got a phone call from Congresswoman Maxine Waters.
The L.A. Democrat wanted the people in charge of federal bailout money to meet with the National Bankers Association, a trade group for minority banks.
Maxine Waters serves on the House Financial Services Committee. At a recent hearing, she proudly said she’s an advocate for banks owned by women and minorities and for their customers.
“It seems that all of my political life I have been in disagreement with the banking and mostly financial services community because of practices that I have believed to be not in the best interest always of the very people that they claim to serve.”
Treasury officials met with the trade group for black-owned banks, as Waters asked. One of the banks at that meeting, L.A.-based OneUnited, asked for and later got federal bailout money. It turns out Maxine Waters once owned stock in OneUnited. And at one time, her husband served on the bank’s board.
The House Committee on Standards of Official Conduct is now looking into whether she used her influence as a member of Congress for personal financial gain.
Melanie Sloan, who runs the watchdog group Citizens for Responsibility and Ethics in Washington, said, “This was a particular problem because Ms. Waters failed to tell Treasury officials about her husband’s involvement in the bank and her family’s financial interest in it.” Sloan said Treasury officials say they were blindsided by this.
Waters said her financial stake in OneUnited Bank was no secret. She’d disclosed it in official filings with Congress. Those filings show she and her husband held more than half a million dollars in OneUnited stock at least as recently as two years ago. Waters said there are “no facts” that show she “acted improperly” by asking Treasury officials to meet with black-owned banks.
Melanie Sloan disagrees. “She has a financial interest in a bank that she’s helped getting bailout funds for. And that’s entirely inappropriate." Sloan said, "there is a specific House rule that says members will not use their positions to improve their own financial positions. And that’s what she was doing here.”
Danielle Brian, executive director of another Washington watchdog group, the Project on Government Oversight, said, “I think it’s really bad because what it does is it undermines the public’s belief – reasonably, I would argue – in the integrity of the process in Congress.”
Brian said the American public wonders why Congress asks federal officials to bail out one bank and not another. “This is what feeds a sense in the public that this is not a merit based system,” she said.
After the leak of a classified report, the House Committee on Standards of Official Conduct announced it was investigating the allegations aimed at Congresswoman Waters. It’s also looking into seven members of the House Appropriations Committee. They’re under investigation for securing federal money for various projects and accepting campaign contributions from those who got the money. Tomorrow, we’ll look at the legal and political fallout from these ethics investigations.