WASHINGTON (CN) – Rep. Maxine Waters, D-Calif., was formally charged Monday with ethics violations for allegedly failing to cut off her office’s role in directing federal bailout money to a bank in which her husband owned stock.
Documents released Monday by the House ethics committee accuse Waters of failing to reflect credibility on the House, using her political position to benefit financially, and dispensing favors that could influence how she performed her official duties.
According to an investigatory subcommittee, Waters failed to instruct her chief of staff and grandson, Mikael Moore, to quit helping a minority bank to which she was personally connected secure federal bailout funds.
At the request of top executives of OneUnited, a Massachusetts-based bank in which her husband owned stock, Waters organized a meeting in September 2008 between executives and Treasury officials, according to the documents. The executives sought $50 million in federal bailout funds to help them make up for losses in Fannie Mae and Freddie Mac stock that occurred after the government seized the mortgage giants.
Waters’ husband previously served on the board of OneUnited and still held stock in the bank, though the stock’s value had declined from $350,000 to $175,000 over a three-month period leading up to September 2008.
After Rep. Barney Frank, a Massachusetts Democrat and chair of the House Financial Services Committee, advised Waters not to advocate on the bank’s behalf due to her potential conflict of interest, even offering to step in himself to help, Waters backed out of the deal, according to a report by the Office of Congressional Ethics.
But Waters did not tell Moore to stop helping OneUnited, and Moore continued pushing for legislation that would allow the Treasury to direct bailout funds to OneUnited, the documents state.
Moore was “actively involved in assisting OneUnited representatives with their request for capital from Treasury and crafting legislation to authorize Treasury to grant the request,” the investigatory subcommittee found.
Waters’ failure to tell Moore to stop advocating for the bank “created an appearance that respondent was taking official action for respondent’s personal benefit,” the subcommittee found.
The legislation passed, and OneUnited received $12 million in Troubled Asset Relief Program funding.
The TARP funds prevented OneUnited from going under, thereby preserving Waters’ husband’s investment, which amounted to a personal benefit to Waters, the ethics committee said.
“If OneUnited had not received this funding, [Waters’] husband’s financial interest in OneUnited would have been worthless,” the subcommittee wrote.
The ethics committee said Waters should have stopped Moore’s involvement as part of her duty to oversee her staff.
Waters has said she will fight the charges, despite the impact it may have on her Democratic colleagues in the upcoming election season. Waters insists she did nothing wrong. She will face a public House trial, which has not yet been scheduled.