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OneUnited Bank received special treatment beyond what was disclosed
OneUnited's predicament has been on the radar screen of the FDIC since 2007, when Waters's husband, Sidney Williams - a former professional football player and ambassador to the Bahamas - served on its board. Williams and, for a time, Waters herself had invested heavily in OneUnited stock. Although Williams left the board in April 2008, he retained stock worth about $350,000 in June of that year.
Regulators were worried about the bank's expenditures on its officers and its $50 million worth of investments in the stocks of two federally chartered mortgage lending companies, Fannie Mae and Freddie Mac, according to a sworn interview by Sandra Thompson, the FDIC's chief supervisory and consumer protection official, with House investigators. Her statements, obtained by The Post, have not been made public.
"We were concerned about corporate governance. We were concerned about internal controls. We were concerned about asset quality, and we had lots of questions about compensation" for Cohee and the bank's president, Teri Williams, his wife, Thompson said. "There was a Bentley, there was a Porsche, there was a house in Malibu, there was a personal trainer. . . . We told them they have 90 days to get rid of it. Do whatever you want, but the bank isn't going to be funding that sort of thing."
The personal trainer was Robin Downes, a self-proclaimed yoga "guru to the stars" in California, who confirmed in a telephone interview that OneUnited paid her $150 an hour to work with Cohee and Williams (who is not related to Waters's husband).
The FDIC was further surprised that the bank, which markets itself as an ally of the most impoverished neighborhoods in Los Angeles, Miami and Boston, appeared to have paid for club memberships and for parties featuring Hollywood celebrities, according to several sources familiar with its review.
Cohee defended the hiring of Downes, saying her work was "proactive for the health of critical employees." He also said that the bank had not paid for country clubs and that it held "marketing events," not parties.
Thompson told investigators that "we held the board accountable for these decisions" but said she did not know what role, if any, Sidney Williams had played. He declined to comment.
The Boston area director of the FDIC also was concerned that the bank's investments were too heavily concentrated in questionable assets, potentially leaving it without enough money to cover its customers' bad debts, Thompson said. "They had, like, the trifecta. They had Fannie, Freddie, Bear Stearns, AIG, Lehman Brothers - they had everything."
Over OneUnited's opposition, the FDIC lowered its nonpublic assessment of the bank's financial health after its 2007 inspection. After Fannie and Freddie stocks were devalued in August 2008, the bank's "capital was wiped out," she said.
The meeting on Sept. 9, 2008, that Waters set up with top Bush administration officials at the Treasury Department, after Cohee and Robert Cooper, the bank's general counsel, requested it, has been well-documented.
Waters has said she sought the meeting on behalf of a group of minority lenders that Cooper had been tapped to chair, not just OneUnited. Cooper began the meeting by noting that minority-owned institutions were "devastated" by the Fannie and Freddie stock devaluation.
Thompson, however, was dubious. She recalled that she had looked into the issue beforehand and learned that only two minority banks were harmed, OneUnited and a smaller Texas institution. She challenged Cooper, she said, by asking " 'How many?' Because I knew."