ORLANDO, Fla. — The new House Financial Services Committee chairman leading an investigation into two of the largest bank failures in history said Monday his political team has returned all donations from a fundraiser with bank executives in Signature Bank’s boardroom just days before it collapsed.
And the chairman, Rep. Patrick McHenry, R-N.C., pushed back against suggestions that he should recuse himself from the high-profile congressional probe, saying he could not be influenced by campaign cash.
“When people contribute to me, it’s an endorsement of my agenda — not the other way around," McHenry told reporters in an off-camera news briefing about the banking collapse. "In this circumstance, we had not processed the contributions, and we returned them all."
McHenry, who was joined by other GOP committee chairmen and Speaker Kevin McCarthy, R-Calif., addressed questions about the fundraiser the same day he delivered a private presentation to Republican colleagues about the banking collapse at a House GOP retreat in Orlando.
Banking industry under pressure after Silicon Valley Bank collapseMarch 19, 202304:46
McCarthy defended McHenry after the news briefing.
“I think the chairman was very clear,” McCarthy said. “He doesn’t raise money because these people are influencing him. People provide resources — and there’s a limited amount that someone can provide in this process, as well — based upon his own philosophy and principles.”
Bloomberg first reported Monday that Signature co-founder and Chairman Scott Shay held a fundraiser for McHenry at the bank's New York headquarters on March 2 — 10 days before regulators shut it down. Banking executives and other donors paid $1,000 to attend the fundraiser, sponsorships cost $2,900, and hosting duties were $5,800, according to Bloomberg, citing an invitation to the event.
Campaign donations from Silicon Valley and Signature banks have become political headaches for dozens of other lawmakers — Republicans and Democrats alike — as Congress and the Biden administration begin to launch probes to get to the bottom of the historic bank failures.
McHenry's Democratic counterpart on Financial Services, Rep. Maxine Waters of California, told Politico she was returning a $2,500 donation Silicon Valley Bank gave her in late 2020, when she was chair of the committee. Her office has not responded to questions from NBC News.
Senate Majority Leader Chuck Schumer, D-N.Y., gave campaign contributions from former Silicon Valley Bank CEO Greg Becker and the bank’s political action committee to charities, his office told CNBC. And McCarthy’s campaign and various PACs have also received tens of thousands of dollars over the years from SVB, according to USA Today.
Silicon Valley Bank’s PAC donated to more than a dozen lawmakers in recent election cycles. Since 2015, the PAC donated $10,000 in four separate contributions to McHenry. Sen. Mark Warner, D-Va., who is on the Finance and Banking committees, also received $7,500 since 2016 from SVB’s PAC and an additional $2,900 from the bank’s then-CEO.
Spokespeople for McCarthy, Warner and McHenry did not respond to requests for comment about those donations.
McHenry and Waters said they will hold their first hearing March 29 as they launch an investigation into the collapse this month of Silicon Valley and Signature banks. Among those testifying will be Martin Gruenberg, the chairman of the board of directors of the Federal Deposit Insurance Corp., and Michael Barr, the vice chair for supervision for the Federal Reserve Board of Governors.
After they shut down the two banks, those federal agencies took several steps — including setting up a facility to lend to banks in moments of financial stress — to ensure a contagion didn’t spread to other banks throughout the country.
“So far, we see these two agencies acting according to the law,” McHenry said. “What we don’t know is the key decisions that were made that weekend that made us have a very stressful 12 days since then. Do they have better options that they didn’t pursue because of some ideological lens on the regulators and this administration? But we’re going to pursue those things.”
Since the collapse, President Joe Biden has sought to shore up confidence in the U.S. banking system while his administration pursues accountability for those involved. The Justice Department and the Securities and Exchange Commission launched investigations into the banks’ failures Tuesday.
Asked whether there should be consequences for the failures, McHenry said a number of banking executives have already been fired.
“When these two banks were taken over by the FDIC, the executives were fired, right? The bondholders got wiped out. The investors got wiped out. So that’s already done, OK. When it comes to who failed here, this is a reason why we have oversight,” McHenry said.
“We have to investigate what happened. We have to see where the failure point was. Was it management, was it supervision, was it both? Was it some combination of bad regulation?” he continued. “All these things — we got to go look into this stuff.”