House Financial Services Committee ranking member Spencer Bachus is calling on the Obama administration to answer questions about whether it played a role in helping line up a $200 million public-private bailout of one of Barack Obama’s favorite banks. In order to become eligible for a TARP bailout and avoid FDIC closure, Chicago’s ShoreBank needed to line up $125 million in private capital. Eager to suck up to the Obama administration help this down-on-its-luck, philanthropy-minded community lender, noted Club TARP alums good samaritans Goldman Sachs, Citigroup and GE Capital banded together to raise the money. ShoreBank now qualifies for $75 million in TARP aid.
The administration stated that “White House officials have not met with ShoreBank regarding support measures for their bank.” That’s great and also irrelevant. If a White House official wanted to pressure Goldman Sachs into helping ShoreBank, he wouldn’t meet with ShoreBank; he would make his preferences known to Lloyd Blankfein. Bachus wants to know if any administration official had any contact with anyone at the big banks regarding the ShoreBank bailouts and, if so, what these conversations entailed.
It’s possible — likely, in fact — that administration officials didn’t apply any direct pressure to Goldman et al, because they didn’t have to. As Henry Hill put it in a different context, “One day some of the kids from the neighborhood carried my mother’s groceries all the way home. You know why? It was outta respect.”