FDIC Denies Maintaining List of Banks with ‘Prominent Connections’ (PJM Exclusive)
On Friday, PJM contacted the FDIC to ask those same questions. After repeated phone calls were not returned and this reporter was told people “had just left for a meeting,” PJM received an email from Andrew Gray, director of Public Affairs at the FDIC, at 4:57 p.m. EST:
We don’t have a system or list of prominent banks that have relationships with prominent people. The Washington Post article was wrong. If you look at the testimony that the reporter drew from, it is pretty clear.
Note Gray directed PJM to testimony which is not public, but which the Washington Post has obtained:
Regulators were worried about the bank’s expenditures on its officers and its $50 million worth of investments in the stocks of two federally chartered mortgage lending companies, Fannie Mae and Freddie Mac, according to a sworn interview by Sandra Thompson, the FDIC’s chief supervisory and consumer protection official, with House investigators. Her statements, obtained by the Post, have not been made public.
PJM then contacted R. Jeffrey Smith, the Washington Post journalist who wrote the original story, to ask him about the allegations raised by Gray.
Smith responded via email as well, late Friday evening:
We haven’t made a decision about making the testimony public in full. But I stand by the story in full. Moreover the agency has not contested to us our description of that testimony.
FDIC needs to explain themselves, and quickly.
That the law is fairly applied — and that all have an equal opportunity before it — is the cornerstone of American society. Bad enough that this bank so obviously was given consideration far above and beyond any other bank in the country because of its connection to Waters, but that a government agency should so blatantly keep track of organizations with the “proper contacts” is a level of corruption which defies description. It is possible, of course, that Smith and his collaborators did indeed get it wrong. But the fact that FDIC will deny this to PJM, but has not protested to the Post is telling.
That politicians will try to curry favors for constituents’ friends and relatives is a law of nature, as is that bureaucrats will often grant them. But this should not be institutionalized. If the Post is correct and this practice was institutionalized at FDIC, all Americans should be appalled, and a criminal investigation should follow Issa’s.
If true, dangerous times are ahead
maybe it would have been better said,”if true, the current financial crisis is about to become more tumultuous.”
The trouble is that this organization (FDIC) like the equal opportunity section of the Justice Department, will never voluntarily confess to its own behavior once it realizes it is felonious. The only way tbat the truth will come out is if congress defunds the entire organization, and replaces it with a new one whose staff are chosen to be responsible.
The threat of this may well bring forward whistle blowers who will obviate the need for this draconian step, but the threat must stay on the table until the behavior is made transparent to the American people.
So can we can start calling them fascists now?
Transparency? Sheesh. You got big dreams in this world. Every organization salutes the politicians because with a phone call they can have an FDIC investigator crawling through your books for weeks. Try a Medicare audit, not that they aren’t needed, but when a group comes into your shop and requires you to rent a dozen copy machines for them you get a feel for what dissing the politicians can bring you. Campaign contributions is the leading cause of cranking the wheel in their favor. We must be able to band together as small donors to get politicians that work for the majority and not the big donors.
Issa ought start with the GM and Chrysler sweetheart deals with the unions and the connected friends who were allowed to keep dealerships while stealing millions if not billions from the dealers that were not connected. I know a guy who was forced to give up his Cadillac dealership that was profitable and had an exclusive 35 mile radius from GM. Forced to give up for a fraction of it’s worth. If and when the FDIC friends and family investigation starts with the FDIC, inevitably it will tie into the office of Comptroller Of the Currency and the other federal banking regulators and from there the sweetheart loans given to the friends and families (that they would on their own never qualify for) which will tie in the unions, the crony auto dealers, crony real estate developers,the large wall street brokerage houses and the banks that made the garbage loans with the blessings of the regulators and their political masters and all of the other politically favored connections. Crony capitalism isn’t capitalism. It’s fascism.
Mark twain was right. Congress is the only native American criminal class.
Looks like another episode in bank profiling to me, or do I have that confused with red lining? Black mail? We’ve come a long ways, finally color blind crony state capitalism.
Mr. Issa, come January 2011, use your subpoena power wisely. There is much to do.
It’s about time somebody started looking into this.
NO bank, NO auto company, and NO financial institution should have been “bailed out.” Were it not for Obozocare, the Porkulus bill, and TARP, we would actually be out of the Great Recession by now.