It’s only been four months since the FDIC seized the Obama-favored ShoreBank, changed management, adjusted some of the director oversight, and kept the machine running as Urban Partnership Bank. But it turns out a name change makes no difference when it comes to institutions born, raised and protected under Chicago politics. Crain’s Chicago Business reports:
Urban Partnership Bank, the successor to ShoreBank, late last week hastily withdrew the application it had submitted to state banking regulators to name as one of its directors Donald Beal, owner of Arrow Lumber Co., the South Side firm just barred from doing future business with the city after admitting to defrauding it.
Arrow Lumber is a customer of Urban Partnership Bank, a bank spokesman confirmed. The new lender was financed by a host of Wall Street giants like Goldman Sachs Group Inc. and formed in August to take over the assets and deposits of failed ShoreBank….
The Chicago Tribune reported Monday that the city was continuing to give Mr. Beal’s firm business years after first learning that he’d double-billed the city for certain items. That day, the city formally debarred Arrow Lumber from its list of contractors.
Mr. Beal didn’t return a message left at his office requesting comment.
Urban Partnership Bank moved to withdraw Mr. Beal’s board nomination after it learned that the news reports were coming, the spokesman said.
The bank, which had $1.4 billion in assets as of Sept. 30, currently has six board members, three of whom are insiders, including Chairman David Vitale and CEO William Farrow. The bank is remaking the board of the old ShoreBank, the high-profile lender in low-income urban neighborhoods that failed in August.
According to the Tribune‘s December 5th article that exposed the scandal, the depths of corruption between Beal and the administration of Mayor Richard Daley were well-established. Yet the stench of Windy City political dealing didn’t stop with Beal — it reached into the halls of justice as well. Only when the newspaper filed a Freedom of Information request did the city begin to act to stop doing business with Beal:
Donald Beal, owner of Arrow Lumber Co., was granted immunity more than three years ago to testify against former city trades supervisor Kevin O’Gorman about an alleged billing scheme to divert taxpayer-bought materials – including kitchen cabinets, countertops, American flags and carpentry supplies – to O’Gorman for his personal use.
Cook County Judge Steven Goebel acquitted O’Gorman on Jan. 19 and, in his ruling, chastised Beal.
“Mr. Beal did get on the stand, admitted to defrauding the city, but obviously blamed (O’Gorman),” Goebel wrote in his verdict. “I find parts of Mr. Beal’s testimony absolutely dishonest and unbelievable.”
City officials say they are in the process of debarring, or formally blacklisting, Arrow, an action that began Sept. 24 — four days after the Tribune filed a Freedom of Information request for Arrow Lumber contracts.
Now Urban Partnership Bank officials are blaming Beal for not disclosing to them his legal entanglements before they submitted his name as a new director to state banking regulators. That the new management, which replaced the old ShoreBank leadership because of their incompetence, was not capable of doing a basic background check before adding Beal to the board illustrates their own ineptitude — or worse, their intentions.