A defiant Maxine Waters disputed charges that she violated House ethics rules and released documents Friday that could undercut the complaint that the 10-term California Democrat sought federal money to bail out a bank where her husband owns stock.
With midterm elections three months away and no trial date scheduled by the House Ethics Committee, Waters — like her House colleague Charles Rangel of New York — made her case in the court of public opinion.
"I have not violated any House rules," the senior member of the House Financial Services Committee told a news conference that included a power-point presentation of the documents.
Waters is charged with three counts: violating a rule requiring lawmakers' conduct to reflect creditably on the House; violating the spirit and letter of a rule prohibiting receipt of benefits by exerting improper influence; and violating a government code of conduct that prohibits dispensing or receiving special favors.
Rangel defended himself in a rambling, 37-minute speech to the House on Tuesday and again on Thursday in at a news conference in New York against charges that he violated House ethics rules. He also cited the slowness of the ethics committee in setting a date for a trial.
Waters' primary defense is that she contacted former Secretary Henry Paulson Jr., in September 2008 about a meeting for the National Bankers Association — a trade group of minority-owned banks. She said she turned the matter over to Rep. Barney Frank, D-Mass., the Financial Services Committee chairman, after learning OneUnited Bank was the association member actually needing the aid.
The case appears to hinge on whether Waters was trying to help the association or OneUnited, a bank where the congresswoman's husband, Sidney Williams, owns stock. The bank is headquartered in Frank's Massachusetts district.
The investment of Waters' husband was worth more than $352,000 at the end of 2007. But by late September 2008 — the month when Waters says she was helping the trade association — the investment had declined to $175,000.
Several documents released by Waters show that the association, not OneUnited, wrote to Paulson for federal help. In one internal Treasury Department document, the head of the federal bailout program for financial institutions said he had no knowledge of congressional intervention when the decision was made to give OneUnited $12 million in December 2008.
Among the documents released by Waters:
—A Sept. 6, 2008 National Bankers Association letter to Treasury Secretary Paulson that set Waters' intervention in motion. It expressed concern that minority banks could suffer major losses from a government takeover of mortgage giants Fannie Mae and Freddie Mac, because banks invested in the two failing companies.
It turned out that OneUnited was the only association member severely hurt by that investment, but Waters said she wasn't aware of that when she called Paulson on Sept. 8 on the association's behalf.
—Several other association e-mails, news releases and a letter around the time of the Treasury-trade association meeting on Sept. 9, indicating this was an association issue.
—Testimony to the House ethics committee from an official of the bank-regulating Federal Deposit Insurance Corp., Sandra Thompson. She said that despite problems with OneUnited's operations, she recommended to her superiors that OneUnited be placed on a track that would permit OneBank to get assistance.
—An Internal Treasury Department e-mail showing the head of the bailout program for financial institutions, Neel Kashkari, said the meeting set up by Waters played no role in the later decision to give OneUnited $12 million. In fact, the so-called Troubled Asset Relief Program hadn't even been established at the time of the meeting.
"We didn't even know about it," Kashkari he said, referring to the Treasury-minority association meeting.
—Numerous e-mails between Financial Services Committee staff members showing that Frank and his staff was dealing with Treasury in support of OneUnited. Those e-mails did not mention Waters.
Waters' problem is that in the meeting she arranged, the two association officials present also were executives of OneUnited.
Also, Frank told her to stop working on the OneUnited problem to avoid a conflict, and that he would handle it. The ethics committee said that warning came around the time Waters began working on the issue. Waters said it was weeks later. Frank says he can't remember the date.
At the news conference, Waters said she told Frank that because of her husband's investment, "I can't deal with that. I'm not going to be involved with that."
She said Frank responded, "Stay out of it. I'll take over."
The ethics committee said Waters did not back out, but had her grandson and chief of staff, Mikael Moore, pursue the matter. Moore, at the news conference, said he did nothing to get OneUnited the federal money and released an e-mail showing he only sent the bank the Treasury Department's draft bailout legislation.