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).
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!