ShoreBank rescue prompts call for congressional probe (Illinois)

Crain's ^ | May 19, 2010 | Steve Daniels

[KeyLargo]

ShoreBank rescue prompts call for congressional probe

By Steve Daniels May 19, 2010

(Crain’s) — Two top Republicans on the U.S. House Financial Services Committee, including U.S. Rep. Judy Biggert, R-Hinsdale, wrote a letter to President Barack Obama demanding records pertaining to any administration involvement in the $140-million Wall Street bailout of ShoreBank Corp.

“Some believe that ShoreBank was really saved because of an assumption that high-ranking officials in the Obama administration favored a bailout of this failing institution with deep political ties,” said the May 19 letter by U.S. Rep. Spencer Bachus, R-Ala., and Ms. Biggert. “The administration’s perceived involvement raises very serious questions as to whether the federal government is facilitating the rescue of a politically connected hometown bank when hundreds of others are forced to close.”

Mr. Bachus is the senior Republican on the Financial Services Committee, which oversees banking laws, while Ms. Biggert is the top GOP member on the committee’s subcommittee on oversight and investigations.

Chicago-based ShoreBank was on the brink of failing before a group of the nation’s largest financial players, including Goldman Sachs Group Inc., General Electric Co.’s commercial finance arm, J. P. Morgan Chase & Co. and Bank of America Corp. stepped forward with about $140 million in equity commitments.

That should enable the South Side lender, which made its name over three decades lending profitably in low-income neighborhoods, to qualify for about $75 million in bailout funds from the Treasury Department.

Obama administration representatives and the bank have denied any White House role in the capital-raising campaign.

A perception has fueled by anonymous comments from Wall Street sources to other publications that Goldman Sachs and other recipients of federal aid in the immediate aftermath of the financial crisis acted knowing that the administration favored a rescue of ShoreBank.

ShoreBank’s leaders, most of whom live in the Obamas’ home neighborhood of Hyde Park, long have had a personal relationship with the president, going back to when he was a state senator.

Mr. Bachus and Ms. Biggert requested that the White House provide all records of communication relating to the ShoreBank negotiations, including with Goldman Sachs CEO Lloyd Blankfein and Eugene Ludwig, a former ShoreBank board member and head of Promontory Financial Group, a Washington, D.C., consultancy that assisted ShoreBank.

“In a year in which hundreds of banks are expected to fail, it is good news that this troubled institution has managed to survive,” the letter said. “The question that many are asking, however, is why did government-supported Wall Street banks decide to save ShoreBank rather than the numerous others that faced a capital shortage?”

News of the letter was first reported by Fox Business Network.

[KeyLargo]

GE Rides to Shorebank's Rescue

http://www.futureofcapitalism.com/2010/05/ge-rides-to-shorebanks-rescue

General Electric, whose new profile as a big-government force has been detailed regularly here, is riding to the rescue of ShoreBank, the Chicago bank that describes its mission as "to create economic equity and a healthy environment."

Republican Congressman Spencer Bachus is asking the White House to answer whether it has been involved in saving the bank. Bloomberg Businessweek has a report that claims the bank "has long-standing ties to the president," which may be an overstatement. The article says, "After Obama was elected, former ShoreBank executive Robert Weissbourd served on the president-elect's transition team."

The Bauchus press release says, "When you have the Obama Administration picking winners and losers, their political friends get bailed out while taxpayers and those less politically connected get the short end of the stick...There is no way a bank without ShoreBank's political connections would receive this kind of attention, and these actions fully make the case as to why the government should refrain from subjective, ad-hoc bailout practices"

http://www.futureofcapitalism.com/2010/05/ge-rides-to-shorebanks-rescue

[Psycho_Bunny]

"Some believe that ShoreBank was really saved because of an assumption that high-ranking officials in the Obama administration favored a bailout of this failing institution with deep political ties,”

"Some"?

Any other bank would have been "seized by regulators" late on a Friday afternoon.

[Oldexpat]

Cronies..they didn’t need a word from the WH..they just knew what they had to do. No doubt Jesse Jackson and like helped them a little. A couple calls..etc.
The really bad news is that they will just fail again in a couple years. Bad credit policies aren’t changing.
The old banks had those red lines for a reason.

[gathersnomoss]

“Republican Congressman Spencer Bachus is asking the White House...”

The Marxist Thug In Chief responds with a middle finger. Move along.

[Ev Reeman]

This is a huge scandal and the FDIC should investigate this thoroughly. So should the SEC. And so should the Congressional Banking committee which oversees the banking industry.

[KeyLargo]

Andy Martin links Barack Obama to the growing “ShoreBank” scandal in Chicago

2010-05-20 10:42:35 - Andy Martin says $1 million Obama campaign contributor Goldman Sachs is trying to orchestrate a bailout of failed financial institution ShoreBank, which has close ties to Barack Obama’s old neighborhood. Martin says the “Chicago fix” is in. Martin will be asking the Department of Justice for appointment of an independent counsel to investigate influence peddling and Chicago corruption in the ShoreBank scam. ShoreBank may have financial interests in—no surprise—Barack Obama’s “home:” Kenya. Martin is demanding that the bank make full disclosure of all of its overseas interests and investments before any federal aid is approved.

Martin says Chicago news media are covering up the ShoreBank scam out of fear of Obama retaliation....

http://www.pr-inside.com/andy-martin-links-barack-obama-to-r1903402.htm

[DontTreadOnMe2009]

That should enable the South Side lender, which made its name over three decades lending profitably in low-income neighborhoods, to qualify for about $75 million in bailout funds...

Huh?

[KeyLargo]

ShoreBank Blog

The ShoreBank Blog is your place to find ShoreBank news, new product information, and our insight into the banking world.

This Black History Month, with the historical election recently behind us, I am reminded like never before of the impact that a community can have on one’s own life and the lives of others. The people that worked and lived here, who struggled here, who played and prospered here before me, not only paved the way for a tall skinny community organizer to find his way to Pennsylvania Avenue, but they opened the door open for a better way of life for me and future generations of Americans.

I know I speak for everyone at ShoreBank when I say we are proud to have played a role in the development of the city’s South Side but that our mission to inspire and create stronger communities continues and is possible because of the support of all of our friends and customers.

Guest Contributor: Daryl Newell, Senior Vice President of Retail Banking

[KeyLargo]

Barak Obama on Shorebank ABC7 Chicago

Video:

https://www.sbk.com/about-us/news/media2/

[KeyLargo]

Monday, May 17, 2010
Will (Obama) Bail out ShoreBank?
Crain’s.

The American Spectator:

“It’s actually kind of awe-inspiring to see the effort being expended on this bank,” says the head of a U.S.-based bank’s Washington office. “You’ve had something like 70 or so bank foreclosures, and you could argue that some of those were better bets to recover than ShoreBank, but because of the Clintons, the Obamas, the Moseley Brauns of the world, and ShoreBank’s sentimental value because it supported their community organizing efforts, it should be saved. None of them were saying that about the bank in Wisconsin that kept family-owned farms afloat. Wonder how those banks’ investors feel about the Obama Administration’s lack of interest in them.”

Bitter clingers of course.....

Earlier Schakowsky challenger (D-9th) Joel Pollak post:

Federal Election Commission records reveal that ShoreBank executives and employees gave thousands of dollars to Rep. Schakowsky and Sen. Durbin.

They also gave heavily to Barack Obama’s presidential campaign. Indeed, Crain’s Chicago Business reports that “President Obama and the first lady are former neighbors of ShoreBank executives.”

Other ShoreBank-related contributions include Democrats across the country and left-wing organizations such as MoveOn.org.

The ShoreBank bailout would seem to be more of the same Blagojevich-style, pay-to-play politics that Illinois has suffered under for too long.

Oh, and Obama’s preacher of hate of nearly 20 years, the Rev. Wright is connected too.

http://backyardconservative.blogspot.com/2010/05/will-obama-bail-out-shorebank.html

[KeyLargo]

Obama-Connected Shore Bank Bailout

by Mark Rhoads

Thursday, May 20, 2010

In 1973, a group of investors that included Ron Grzywinski, Mary Houghton, James Fletcher and Milton Davis re-organized the old South Shore National Bank at 7054 S. Jeffrey Boulevard in Chicago that is now variously called Shore Bank or ShoreBank with branches outside of Chicago including in Cleveland and Detroit. ShoreBank had an unusual policy of making loans to nonprofit community organizations that were more risky than business and real estate-secured loans.

Like many banks, ShoreBank has made some bad loans. But unlike other banks, ShoreBank has some special friends in The White House including Valerie Jarett and President Barack Obama. The FDIC has apparently been on the verge of closing ShoreBank and some financial firms are claiming they have been put under political pressure to chip into a bailout. CLICK HERE for story.

http://illinoisreview.typepad.com/illinoisreview/2010/05/obamaconnected-shore-bank-bailout.html

[KeyLargo]

* The Wall Street Journal

* BUSINESS
* MAY 20, 2010

ShoreBank Rescue Under Scrutiny

By JOHN D. MCKINNON And ELIZABETH WILLIAMSON

Republican lawmakers began two inquiries into the rescue of a pioneering Chicago community bank by some of Wall Street’s biggest financial firms, saying political considerations appear to be at work.

In letters to the White House, the lawmakers questioned whether the big banks are currying favor with the Obama administration at a time when many are under federal scrutiny. The lawmakers also asked whether the White House has been pressuring the big banks to help.

The White House denied putting pressure on bankers.

The Wall Street Journal reported last week that Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein was personally making fund-raising calls to other banking executives, seeking private-sector pledges totaling $125 million for the failing community-development lender, Chicago’s ShoreBank Corp.

After initially declining to invest, Goldman itself promised at least $20 million in recent days.

On Monday night, people close to the ShoreBank fund-raising effort said it had exceeded its goal, with pledges of more than $135 million. Supporters are hoping to win about $75 million in additional assistance from a U.S. Treasury bailout program for troubled community-development lenders.

In a letter to the White House on Wednesday, Rep. Darrell Issa (R., Calif.) asked whether Goldman was seeking to score points with the White House by coming to the aid of ShoreBank.

Goldman has been the subject of a series of federal inquiries concerning its practices during the financial crisis. Goldman says it did nothing wrong and its actions have been appropriate.

“It is important to avoid even the mere appearance that Mr. Blankfein is attempting to curry favor with the administration by contributing money to save the White House’s favorite community bank,” wrote Mr. Issa, the top Republican on the House Oversight and Government Reform Committee.

excerpt

http://online.wsj.com/article/SB20001424052748704691304575254812737842880.html

[Dengar01]

Judy Biggert was great to work for, glad she is representing me in Congress!!!