House ethics committee postpones Waters trial
Friday, November 19, 2010; 9:04 PM
Newly discovered evidence led the House ethics committee Friday to postpone this month's planned trial of Rep. Maxine Waters, the California Democrat accused of inappropriately helping a financially troubled bank in which her husband was a large shareholder.
The panel's leaders did not characterize the evidence except to say in a statement that it "may have had an effect" on the charges filed against Waters. The lawmaker, however, said the evidence is an e-mail from her chief of staff about the 2008 bank bailout legislation.
The committee effectively returned the case to an investigative subcommittee to consider the new evidence rather than proceed with a trial that had been slated to begin Nov. 29.
"The Committee's decision to cancel the hearing and put it off indefinitely demonstrates that the Committee does not have a strong case and would not be able to prove any violation has occurred," Waters said in a statement, adding later, "I am puzzled at the committee's insistence on moving backwards instead of forwards."
Waters has said she did nothing wrong in helping the nation's largest minority-owned bank get a meeting with Treasury officials in September 2008, where the bank requested tens of millions of dollars in assistance. Separately, the bank eventually received a $12 million grant from the Troubled Assets Relief Program.
In the statement, Waters suggested that the e-mail supports her contention that she was interested in helping a broad group of minority-owned banks, not just the one her husband invested in.
Unlike Rep. Charles B. Rangel (D-N.Y.), who fought with multiple legal teams and ultimately had no counsel when the committee found him guilty this week of 11 ethics charges , Waters has consistently been represented by veteran ethics lawyer Stanley Brand. Waters is expected to mount a vigorous defense.
The e-mail was sent by Mikael Moore, the lawmaker's top aide who is also Waters' grandson, on Sept. 28, 2008, just two hours before House Speaker Nancy Pelosi (D-Calif.) unveiled TARP. Moore complained to staff on the House Financial Services Committee that he wanted to know "the status of the provisions that we have been working on" related to minority-owned banks.
"It would not be acceptable to receive a copy [of the legislation] after it is final," Moore wrote, making a couple of suggestions in changing a few words from an earlier bill.
The investigative subcommittee alleged in August that Waters's office improperly worked in September 2008 to press for aid to prevent the failure of Boston-based OneUnited Bank, which eventually stayed afloat with the help of TARP money.
Waters's husband, Sidney Williams, had served on the bank's board. He owned stock in OneUnited that had declined in value from $350,000 in June 2008 to $175,000 two months later.
In early September 2008, Waters arranged a meeting between the bank's officers and Treasury officials. At the meeting, the bank's officers requested $50 million in federal money. Treasury balked, saying it had no legal authority to give the bank the money.
The Treasury Department has said that the TARP grant it later gave OneUnited was based on sound, normal criteria.
Throughout the investigation Waters - the most senior black lawmaker on the Financial Services Committee - has maintained that she arranged the meeting as part of an effort to help minority-owned banks in general, and not OneUnited specifically. She told the ethics investigators that after the meeting, she removed herself from the effort to help the bank, citing the conflict.
But the four-member investigative subcommittee found that Moore remained "actively involved in assisting OneUnited representatives with their request for capital from Treasury."