You are a U.S. Senator. You vote for TARP to bail-out
banks. Your office calls the regulators to make sure a
bank in which you have a financial stake receives TARP
money. You are Sen. Daniel Inouye (D-Hawaii).
Reports the Washington Post:
Sen.
Daniel K. Inouye's staff contacted federal regulators last
fall to ask about the bailout application of an ailing Hawaii
bank that he had helped to establish and where he has invested
the bulk of his personal wealth.
The bank, Central Pacific Financial, was an unlikely candidate
for a program designed by the Treasury Department to bolster
healthy banks. The firm's losses were depleting its capital
reserves. Its primary regulator, the Federal Deposit Insurance
Corp., already had decided that it didn't meet the criteria for
receiving a favorable recommendation and had forwarded the
application to a council that reviewed marginal cases,
according to agency documents.
Two weeks after the inquiry from Inouye's office, Central
Pacific announced that the Treasury would inject $135 million.
It's good to see that an economic crisis brings out the best in
our legislators!
About the Author
Doug Bandow is a Senior Fellow at the Cato Institute and the Senior Fellow in International Religious Persecution at the Institute on Religion and Public Policy. A former Special Assistant to President Ronald Reagan, he is author of Beyond Good Intentions: A Biblical View of Politics (Crossway).
