Odds of ShoreBank Takeover Now Seen at 50-50 (Chicago/DC scam wow)

Officials at ShoreBank, the troubled community bank with ties to the Obama administration, say there’s a “50-50” chance that recent efforts to rescue the institution will fail, and the bank will be taken over by federal government, FOX Business has learned.

“It’s a coin flip, 50-50,” ShoreBank spokesman Brian Berg said, assessing the bank’s potential for surviving. “We’re working on” raising the money.

Berg says the bank believes that it needs to raise $75 million more in additional capital to avoid being taken over by the Federal Deposit Insurance Corp. as early as this Friday.

An FDIC spokesman declined to comment, but executives at major Wall Street firms say the FDIC has launched a last-minute attempt to save the institution by asking them to contribute more money in addition to the $150 million that the firms have already donated to keep ShoreBank alive, FOX Business has learned.

Under one scenario that might be announced Friday, the FDIC would take over the bank, assume its liabilities and cover depositors’ savings accounts, and the firm would recapitalize a new bank with a clean balance sheet, Wall Street executives say.

Already, major firms and banks have agreed to donate $150 million to repair the bank’s balance sheet, which in addition to a $75 million government grant was initially thought to provide a long-term fix to secure the bank’s future.

But a recent Federal Reserve analysis has determined that the bank needs more money to survive, causing the FDIC to alert the community lender that without additional funds it would be taken over.

ShoreBank officials have in the past been reluctant to discuss the bank’s future amid the controversial effort by government officials to save the bank in recent months, which included an unprecedented effort by some of Wall Street's largest banks to chip in money to repair the bank’s balance sheet.

Since the start of the Great Recession, dozens of bank holding soured loans and other securities have been taken over and liquidated as part of the FDIC’s resolution process.

When it became clear that the bank was heading toward insolvency, FDIC chief Sheila Bair swung into action by convincing firms such as Goldman Sachs (GS: 148.08 ,+0.98 ,+0.67%) and General Electric (GE: 14.98 ,-0.27 ,-1.74%), and other big New York banks, such as Citigroup (C: 3.73 ,-0.07 ,-1.84%), JPMorgan (JPM: 37.11 ,+0.02 ,+0.04%) and Bank of America (BAC: 12.84 ,-0.18 ,-1.39%), to contribute tens of millions of dollars in new capital to prop up the firm.

But as FOX Business has reported, the bailout effort became a source of controversy because ShoreBank has close ties to the Obama administration and was said to be receiving preferential treatment;

the Chicago institution has been singled out by the president, himself a Chicago native, for its community lending activities and efforts to finance environmentally friendly businesses.

Senior presidential advisor Valerie Jarrett has connections with at least one director of the bank and the president’s former and controversial green czar, Van Jones, had ties to the bank.

Meanwhile, officials at the New York banks giving the money said they felt political pressure to contribute the funds. (Jarrett has told FOX Business she played no role in the matter.)

But congressional Republicans were dubious. Ranking House Financial Services committee member Spencer Bachus [R-Ala.] launched an investigation into the bailout after reports that Goldman CEO Lloyd Blankfein began raising money for ShoreBank when his firm faced a serious civil charge from the Securities and Exchange Commission, which it has since settled for a modest fine.

GE, another contributor to the ShoreBank bailout, has feasted off of government contracts, particularly in the area of grants and other government handouts associated with the president’s environmental agenda.

*snip*

Enter ShoreBank.

ShoreBank has been active in helping homebuyers with making their homes more energy efficient for years. In 2005, then-governor Rod Blagojevich “announced a $10 Million Homeownership Initiative to Revitalize Homes in Chicago’s South and West Sides.”

This venture was administered by ShoreBank, which also provided homebuyers with education on “how to choose energy-efficient products…..”

ShoreBank’s own website states, “In Chicago, borrowers are rated on types of windows and light bulbs used, and a free energy audit is often required before a loan is granted.”

Recently, ShoreBank received $35 million in “new market tax credits” to finance green buildings and other projects in Chicago, Detroit and Cleveland – the communities it serves.

Now what if you just had a product that needed to be made by green jobs that could be sold by a bank?

Enter Serious Windows, made by Serious Materials.

Serious Windows took over the Republic Windows and Door Factory in Chicago. They make energy efficient windows which have been selected by the Community and Economic Development Association of Cook County to be used in their low-income multifamily dwellings that qualify under the Illinois Home Weatherization Assistance Program. This Assistance Program was awarded $242.5 million in the ARRA stimulus money.

Serious Windows must be important windows in the Obama Master Plan. The company has been singled out (in speeches made by the administration) as being the best windows in America.

And Serious Materials received $548,100 in Recovery Act Advanced Energy Manufacturing Tax Credits for clean energy manufacturing projects – while no other window company received this same credit.

Now you have all the pieces in place to put together a plan to create green jobs. You have a window manufacturer (Serious Windows) receiving government money. You have a weatherization project, also government funded, awarded to the Community and Economic Development Association of Cook County.

And then there’s the Midwest Energy Efficiency Alliance, which recommends Serious Windows, trains energy auditors and develops certified contractor lists.

And finally, there’s ShoreBank, a bank with long ties to the Progressives that has also received government money. ShoreBank requires that an energy audit be completed before a home loan is approved.

(Oh, and did I mention that one of the board members for Midwest Energy Efficiency Alliance works for ShoreBank? Joel Freehling is the Manager of Triple Bottom Line Innovations at ShoreBank, whose “… primary task is the creation of innovative financial products to promote energy efficiency and green development in urban markets, such as ShoreBank’s Homeowners’ Energy Conservation Program.” )

If ShoreBank can loan money to people to buy homes and recommend Serious Windows (which creates green jobs), it will be a win-win for the green jobs stimulus project.

Is it any wonder that Senator Dick Durbin and Rep. Jan Schakowsky are applying pressure as they ask for a $100 million bail out of ShoreBank?

http://biggovernment.com/centralillinois912project/2010/03/10/shorebank-a-key-to-green-jobs/

~~~~~~~

Serious Windows/Materials Team

http://www.seriousmaterials.com/html/ksurace.html

~~~~~

*snip*

But wait, it gets even more interesting.

On my Fox Business Network show on “crony capitalism”, I displayed a picture of administration officials and so-called “energy leaders” taken at the U.S. Department of Energy.

Standing front and center was Cathy Zoi, who oversees $16.8 billion in stimulus funds, much of it for weatherization programs that benefit Serious.

The interesting twist is that Zoi happens to be the wife of Robin Roy, who happens to be vice president of “policy” at Serious Windows.

Of all the window companies in America, maybe it’s a coincidence that the one which gets presidential and vice presidential attention and a special tax credit is one whose company executives give thousands of dollars to the Obama campaign and where the policy officer spends nights at home with the Energy Department’s weatherization boss.

Or maybe not.

There may be nothing illegal about this. Zoi did disclose her marriage and said she would recuse herself from any matter that had a predictable effect on her financial interests.

But it sure looks funny to me, and it’s odd that the liberal media have so much interest in this one company.

Rachel Maddow of MSNBC, usually not a big promoter of corporate growth, gushed about how Serious Materials is an example of how the “stimulus” is working.

When we asked the company about all this, a spokeswoman said, “We don’t comment on the personal lives of our employees.” Later she called to say that my story is “full of lies.”

But she wouldn’t say what those lies are.

On its website, Serious Materials says it did not get a taxpayer subsidy. But that’s just playing with terms. What it got was a tax credit, an opportunity that its competitors did not get: to keep money it would have paid in taxes.

Let’s not be misled. Government is as manipulative with selective tax credits as it is with cash subsidies. It would be more efficient to cut taxes across the board. Why should there be favoritism?

Because politicians like it. Big, complicated government gives them opportunities to do favors for their friends.

http://www.realclearpolitics.com/articles/2010/02/03/big_governments_cronies_100143.html

*snip*

The development has made those trained in the Chicago Way indignant. After all, so much “hard work” went into twisting arms and guilt trips that for the Feds to monkey with the process is worthy of a revolt:

Bill Brandt, chairman (appointed by former Gov. Rod Blagojevich) of the Illinois Finance Authority, a government financing body (i.e., gubernatorial slush fund) that has looked at ways to help ShoreBank, is disappointed by the developments. He says ShoreBank plays a unique role in helping downtrodden communities, particularly those in black neighborhoods.

”Given all the time and effort that went into this, the board of the Illinois Finance Authority, the local civic leaders on the South Side of Chicago and others I’d imagine, would be outraged over this development,” Brandt said….

He said he’s particularly disappointed by Treasury Secretary Timothy Geithner.

“It’s now clearer than ever to me that while he’s happy to have these people clean his apartment and those of his cronies on Wall Street, he’s not comfortable with them getting mortgages for their homes,” Brandt said.

“Mark my words:

After this Herculean effort by so many people, should Treasury allow this bank to fail because of the utter lack of leadership coming from Washington, there will be a firestorm in Chicago,” he said.

http://www.nlpc.org/stories/2010/06/22/firestorm-promised-save-politically-connected-chicago-bank

~~~~~

Good old threats of ACORN street riots and front lawn invasion of targets ... it’s the Chicago Way.

Obama’s Shorebank Connections Go Way Back
John on May 20, 2010 at 8:29 am

###

There is now a demand by congressional republicans for a probe into the mysterious survival of Shorebank.

The letter they sent to the President yesterday asks “why did government-supported Wall Street banks decide to save ShoreBank rather than the numerous others [failing banks] that faced a capital shortage?”

The answer, as I’ve previously noted, is that ShoreBank is politically connected to both Bill and Hillary Clinton and Michelle and Barack Obama. On the latter front, consider this photo from 1998:

Yesterday Morgen dug up a newsletter from a socially responsible investment group which contained a sidebar which adds some context to the photo:

As the sidebar notes, Obama’s connections to the world of socially responsible investing are both longstanding and personal.

His friend John Rogers later became one of his campaign fundraisers. John Rogers was also the husband of Desiree Rogers who became the White House social secretary (she was let go after a couple of reality TV stars crashed a state dinner).

The sidebar also gives some more detail on the photo:

Obama…is pictured above in 1988, honoring one of the founders of ShoreBank, one of the largest Community Development Financial Institutions (CDFIs) in the US.

And you have to love the second part of the sidebar, which notes (favorably) Obama’s connection to Saul Alinsky:

The first social shareholder proxy initiative was organized by the iconic Chicago-based community organizer Saul Alinsky against Eastman Kodak in the late 1960s. Alinsky died in 1972.

Barack arrived in Chicago 13 years later to work with the Developing Communities Project, an offshoot of Alinsky’s network, a context which must have made him conversant with proxy voting strategies.

So, getting back to the original question:

Why is all of Wall Street and GE desperate to save Shorebank? No doubt one reason is because the President wants his old friends bailed out.

http://www.verumserum.com/?p=14805

Click these:

http://www.verumserum.com/media/2010/05/Ties-that-bind-1-e1274369199730.jpg

http://www.verumserum.com/media/2010/05/Ties-that-bind-2-e1274369238931.jpg

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.