Illinois Republican Rep. Judy Biggert on Wednesday inserted into the financial regulatory reform bill an amendment calling for an investigation of efforts to rescue ShoreBank. Meanwhile the White House issued denials that it pushed for a bailout of the politically-favored community lender. The Chicago Sun-Times reported yesterday:
As Chicago’s ShoreBank struggles to survive, the Obama White House issued a strong statement Wednesday denying that it is interfering in any way with federal regulators or influencing financial institutions willing to pump money into the bank.
“White House officials have not met with ShoreBank regarding support measures for their bank, nor has the White House ‘made asks’ of financial assistance to other financial institutions for ShoreBank,” said Amy Brundage, a White House spokeswoman.
Keeping with the policy to “put nothing in writing, ever,” and the historical precedent the administration made in a non-offering of a non-job to Pennsylvania Democratic Senatorial candidate Joe Sestak (so he’d drop his primary challenge to Sen. Arlen Specter), this makes perfect sense. I am sure under plausible deniability that no one “in the White House” met with ShoreBank or that anyone “in” the White House “made asks of financial assistance.” Easy to deny that, as is evident later in the Sun-Times article:
“Questions that come to the White House from institutions regarding the [Community Development Financial Institutions] program are referred to the Treasury Department or to their bank regulator who are the ones that decide these matters,” [Brundage] said.
Obama’s media flacks can effortlessly refute that “the White House did it” by passing the responsibility on to other agencies (which of course are still accountable to the executive branch) – or on other emissaries of the administration, as was the case with whatever was offered to Sestak. This is how White House counsel Robert Bauer explained that last month:
White House staff did not discuss these options with Congressman Sestak. The White House Chief of Staff enlisted the support of former President Clinton who agreed to raise with Congressman Sestak options of service on a Presidential or other Senior Executive Branch Advisory Board.
Amazing how easy it is to throw the formerly mainstream media off the scent of scandal with the current administration. Meanwhile, considering that the Obama White House likes to use intermediaries to accomplish politically sticky tasks, and that ShoreBank was also a favored financial institution of both Clintons, is it out of the realm of possibility that the former President was used to pressure Goldman Sachs, Citigroup, JP Morgan and GE Capital to help with the bailout? Just wondering.
Somehow ShoreBank keeps getting extensions on its agreement with the Federal Reserve Bank in Chicago to come up with a plan for its survival. Fox Business reported Wednesday that the bailout is in doubt due to the Fed’s belief that much more than $200 million in commitments are needed to keep ShoreBank solvent. But there are too many Obama/Clinton constituencies (environmentalists, community organizers, unions, Chicago, etc.) entangled with ShoreBank’s many enterprises for it to be allowed to fail.
Paul Chesser is an NLPC Associate Fellow.