Update: Charlie Gasparino Fox Business News reports:
Spencer Bachus, the ranking Republican on the House Financial Services Committee, wrote President Obama this morning asking for “all records of communication – including emails, phone logs and meeting records- related to the ShoreBank negotiations that exist between the Administration and representatives of ShoreBank, and executives of the banks involved in the bailout.”
Chicago’s ShoreBank’s motto in their logo? “Let’s Change the World” I kid you not. You already know whats coming next don’t you?
Yep, Chicago’s ShoreBank is the poster child bank for the 1977 Community Reinvestment Act is now being warned of being wiped out by the FDIC. But wait! The politically connected bank is getting a last minute Robin Hood attempt by none other than Goldman Sachs, JP Morgan, Bank of America, and Citigroup in an attempt to raise $125 million, except (as good traders that never lose money) the bank heroes are $25 million short. Gee, why would these banks be so generous all of a sudden?
It is reported that GS Lloyd Blankfein is PERSONALLY making phone calls to raise funds. PERSONALLY. Not like he is busy with making $100million a day with 63 straight days of money making trades, or dealing with government probes and heat, or anything. Golly gee Obama and Jan Schakowsky we tried real hard, yes we did.
Shorebank was pimped out by Obama on a trip to Naibrobi when he was in the Senate. Shorebanks co-founder and President Mary Houghton gave advice to Obama’s mother on small business lending. The bank was also a contributor to dear leader’s campaign. (gee you’d think an insolvent bank would practice a little fiscal discipline).
Shorebank has a familiar cast of characters and connections to Obama. It is a small world we live in, isn’t it? Maybe some day all these coincidences may just cause a few light bulbs(LED or CFL of course) to pop on.
As BigGovernment.com points out, ShoreBank has highlighted a few customers, including Van Jones and his Green For All gig.
There are a slew of connections to Obama administration, Bill and Hillary Clinton, and so on.
Most recently, Mr. Nash served as Hillary Clinton’s deputy campaign manager in her campaign for the Democratic nomination for President. He was formerly vice chairman of ShoreBank Corporation, chairman of ShoreBank Enterprise Detroit and the Detroit Bank Advisory Committee, and chairman of the board for ShoreBank Neighborhood Institute and ShoreBank Enterprise Cleveland.
Here is the time line of the birth of the CRA, ShoreBank was the poster child. We all know how that ended.
The Bank instituted a direct-deposit service for Social Security and other government checks; it installed a new computerized central information system for customer bank accounts.
• At a meeting in Estes Park, Colorado, Ron Grzywinski suggest to a Senate Banking Committee staff member that legislation be introduced to require all banks to invest in their community service areas. 1977
• INDC raised additional capital and obtained authorization from the Federal Reserve Board to establish the City Lands Corp. (now ShoreBank Development) as a for-profit real estate development company, and The Neighborhood Institute (now called ShoreBank Neighborhood Institute, and soon to become ShoreBank Enterprise) as a non-profit organization providing tenant advocacy, education, job training and employee placement services.
• Ron Grzywinski testifies before Congress in favor of the Community Reinvestment Act.
• Ron Grzywinski accompanied President Bill Clinton in the Rose Garden as the President signed the Community Development Financial Institutions Act.
What is ironic, is the last entry of ShoreBank’s history timeline:
Hyde Park resident Barack Obama was elected 44th president of the United States; First Lady Michelle Obama grew up in the South Shore neighborhood. Former Southern Development board member Hillary Clinton is designated as Secretary of State in the new administration.
Rep Jan Schakowsky along with Dick Durbin (DEMOCRAT) had suggested earlier in the year that the bank get the first state backed bailout in US history.
The state of Illinois is considering an unprecedented bailout of ShoreBank, the struggling South Side bank acclaimed for its commitment to lending in low-income neighborhoods.
Prodded by the likes of U.S. Sen. Richard Durbin and U.S. Rep. Jan Schakowsky, Illinois Finance Authority officials met earlier this month with ShoreBank executives to discuss raising tens of millions for the bank through an IFA bond offering.
When that didn’t work out, Rep Schakowsky (DEMOCRAT) started to shake down Goldman Sachs and cronies:
Rep. Schakowsky played her own part in the shakedown. She chewed out Goldman Sachs executives in her office, and then boasted about it at the Huffington Post. She warned them:
“You are looking at one of the 57 members who voted against the repeal of Glass-Stiegel [sic] in 1999.”
Regardless of their views of the Glass-Steagall Act, the executives at Goldman Sachs got a first-hard lesson in Chicago-style management.By bailing out ShoreBank, Goldman Sachs and the other banks may hope to appease Rep. Schakowsky and the administration–and to meet their obligations under the Community Reinvestment Act (CRA) of 1977, a law that set the stage for the sub-prime crisis. Wall Street is learning that complying with the CRA does not mean actually helping working families, but bailing out politically-favored institutions like ShoreBank.
Of course Schakowsky (DEMOCRAT) IL was ok with other community banks failing in her own district.
There is a great writeup about all the characters at the Central IL 9/12 project.
Oh, and did ya know that ShoreBank got $35,000,000 in stimulus money? The story just wouldn’t be complete without some double dipping.
Obama’s Chicago left hand gal Valerie Jarrett isn’t to be left out either.
ShoreBank has ties to the Obama administration; Valerie Jarrett, President Obama’s senior adviser and a fixture in Chicago politics (as was the president), served on the board of Chicago Metropolis 2020, a civic organization which was run by Adele Simmons, a director at ShoreBank.
Fox’s Charlie Gasparino reports on political pressure on GS and the banks to cough up some funds:
“The banks tell me there is a degree of political pressure to give money but I think at this point they are tapped out. They just had the meeting an hour ago, they had $100 million raised, they are $25 million short. And what they are telling me is they are not giving any more money.”
“But I will tell you this, the banks themselves are telling me that there is a degree of political pressure being applied by the Obama administration to bail this out…so we could get a last minute bailout…This is a very politically connected bank.”
Ah, a new era in ethics. I wonder if this is the change America voted for?
The verdict should be in soon. Will ShoreBank get the FDIC axe or will the Obama Administration pressure the evil banks to bail out Obama’s home pet bank?