New evidence in Waters ethics case

November 26, 2010

By Larry Margasak-Associated Press

Information that forced postponement of Rep. Maxine Waters‘ ethics trial raises new questions about an investigative panel’s charges that the California Democrat improperly tried to steer federal bailout money to a minority-owned bank where her husband is a stockholder and former director.

A newly discovered e-mail written by Mrs. Waters‘ chief of staff at the height of the 2008 financial crisis may have thrown a cloud over the case rather than offering investigators a smoking gun. The surfacing of the e-mail written by staff chief Mikael Moore, who also is Mrs. Waters‘ grandson, has forced a delay in her ethics trial, which had been scheduled to begin Monday.

A key question is whether Mrs. Waters instructed Mr. Moore to get assistance for OneUnited Bank. Her husband’s investment in the Boston-based bank was in danger of becoming worthless during the near financial collapse of late 2008.

Mrs. Waters has contended she was simply trying to help all minority banks in trouble — and specifically those, like OneUnited, that were hurt by their investments in the then-collapsing mortgage giants Fannie Maeand Freddie Mac.

The House ethics committee last week postponed indefinitely a Nov. 29 trial for Mrs. Waters. a senior member of the House Financial Services Committee, on three counts of violating House ethics rules and returned the case to an investigatory subcommittee to consider the new evidence.

Ethics trials are rare. Last week, the ethics committee recommended that the House publicly censure 20-term Rep. Charles B. Rangel of New York for fundraising and financial conduct that violated congressional rules. It was only the second House trial proceeding in the past two decades.

The recently discovered e-mail had been sent by Mr. Moore on Sept. 28, 2008, to staff aides for the committee who were writing legislation that became the Bush administration‘s controversial $700 billion TARP — Troubled Asset Relief Program — bailout for banks, insurance companies, auto companies and other financial institutions.

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