Waters was Told Not to Get Involved in Bank Matter

The statement of alleged violations essentially faults Waters for failing to direct her chief of staff not to provide assistance to the minority-owned OneUnited Bank after Waters recognized that her involvement might pose a conflict of interest.

In September 2008, the bank was concerned about the federal takeover of mortgage giants Fannie Mae and Freddie Mac, which wiped out the value of the bank’s significant holding in Fannie and Freddie stock. Waters’ husband had been a board member of OneUnited, and according to the investigators, his holdings in the bank at the time were worth about $350,000.

Waters called then-Treasury Secretary Henry Paulson, who set up a meeting for two bank representatives — one of whom was also head of a minority bank trade association — with senior Treasury officials. The OneUnited representatives asked for $50 million to compensate the bank for Fannie and Freddie losses, the investigators concluded.

Afterward, Waters spoke with Financial Services Chairman Barney Frank (D-Mass.), who told her he was already working to solve the problems of OneUnited and other minority banks and she should not get involved.

Read more: (Paul Singer, “Waters’ Lawyers Accuse Ethics Panel of Double Standard.” Roll Call, 08/09/2010)