The Central Illinois 9/12 Project became one of the first to expose — beginning this past March on BigGovernment.com – Shorebank’s extensive green and microfinancing agendas, in anticipation of that bank’s impending bailout. Shorebank, a Chicago-based, community-based investment bank, is focused on domestic and foreign microfinancing, is heavily engaged in the financing of “green” projects and “green” jobs, and has a host of ties to the Obama and Clinton administrations. Most recently, we wrote in April about Shorebank seeking a “bailout” from larger financial firms that have previously received bailout money from the federal government. Congresswoman Jan Schakowsky had previously proposed that the bank receive funds from the State of Illinois to help cover its loss of capital since the beginning of the nation’s economic downturn in 2008.
As we previously wrote, Shorebank would potentially be eligible for TARP funds if it were to be recognized as a “Community Development Financial Institution.” In order to to receive needed federal TARP money and prevent seizure by the FDIC, Shorebank needed to receive appropriate matching funds from private sources. News stories have been released over the past several days indicating that Shorebank has potentially received such funding.
Shorebank has reportedly received $20 million from General Electric, $20 million from Goldman Sachs, and $20 million from Citigroup – with additional large funds being promised by J.P.Morgan Chase, Bank of America, and Morgan Stanley. Shorebank also has received funds from the Northern Trust Corporation, State Farm, and Harris N.A. It has been reported that the bank could also receive funds from Wells-Fargo and PNC Financial Services. Assistance from these financial institutions puts Shorebank’s raised capital from private sources within the range needed to make it eligible for TARP funds.
As we reported previously, Citigroup, Bank of America, and Chase all received tens of billions of dollars in taxpayer money from TARP. Does this then mean that Shorebank is being bailed out by bailout money?
Showing posts with label ShoreBank. Show all posts
Showing posts with label ShoreBank. Show all posts
Friday, May 21, 2010
Wednesday, May 19, 2010
Wall Street was under siege by White House; GOP congressman wants to know why big firms bailed out failing Chicago bank
Just when officials at the politically connected community lender ShoreBank thought they were rescued from near-certain failure by a consortium of Wall Street firms, a top Republican lawmaker is investigating why the firms were so generous with their money, FOX Business has learned.
Spencer Bachus, the ranking Republican on the House Financial Services Committee, wrote President Obama this morning asking for "all records of communication - including emails, phone logs and meeting records- related to the ShoreBank negotiations that exist between the Administration and representatives of ShoreBank, and executives of the banks involved in the bailout."
The Bachus investigation could pose problems not just for the White House, but also the firm involved in the bailout, among the most prominent is Goldman Sachs (GS: 139.98, 2.57, 1.87%). As reported by FOX Business, Goldman and several large banks have agreed to pitch in about $140 million, which when combined with probable federal aid, would prevent the FDIC from taking over the troubled lender.
But people at the big banks say they received what they described as political pressure to make the contributions; Shorebank is based in Chicago, President Obama's hometown, and has been singled out by the president for praise because of its lending activities in poor communities. In addition, President Obama's senior adviser, Valerie Jarrett, has served on a Chicago civic organization with a Shorebank director.
Jarrett has denied any involvement in pressuring the banks to make the donations, but Bachus is examining why Goldman would be interested in saving a community bank in Chicago that many financial analysts believe would have failed without its political ties because of its soured business model.
Spencer Bachus, the ranking Republican on the House Financial Services Committee, wrote President Obama this morning asking for "all records of communication - including emails, phone logs and meeting records- related to the ShoreBank negotiations that exist between the Administration and representatives of ShoreBank, and executives of the banks involved in the bailout."
The Bachus investigation could pose problems not just for the White House, but also the firm involved in the bailout, among the most prominent is Goldman Sachs (GS: 139.98, 2.57, 1.87%). As reported by FOX Business, Goldman and several large banks have agreed to pitch in about $140 million, which when combined with probable federal aid, would prevent the FDIC from taking over the troubled lender.
But people at the big banks say they received what they described as political pressure to make the contributions; Shorebank is based in Chicago, President Obama's hometown, and has been singled out by the president for praise because of its lending activities in poor communities. In addition, President Obama's senior adviser, Valerie Jarrett, has served on a Chicago civic organization with a Shorebank director.
Jarrett has denied any involvement in pressuring the banks to make the donations, but Bachus is examining why Goldman would be interested in saving a community bank in Chicago that many financial analysts believe would have failed without its political ties because of its soured business model.
While Washington ponders new regulations for Wall Street, big firms rush to bail out an Obama-friendly Chicago bank
Some of the nation's largest banks have agreed to contribute enough money to save Chicago-based ShoreBank, the community lender with strong ties to the Obama administration, FOX Business has learned.
The banks have agreed to contribute $140 million to bail out the bank, while the federal government will donate tens of millions more, according to people close to the talks. In addition to major Wall Street firms like Goldman Sachs (GS: 137.81, 0.4, 0.29%), which agreed to contribute $20 million to the bailout effort, as well as Citigroup (C: 3.7693, 0.0493, 1.33%) and JPMorgan (JPM: 39.35, 0.33, 0.85%), General Electric's (GE: 17.2001, -0.0299, -0.17%) GE Capital will also contribute $20 million to the rescue effort. All the firms have either received massive government assistance during the financial crisis or, in the case of Goldman Sachs, are facing multiple regulatory investigations into their business practices.
The bailout has been controversial. Senior Obama adviser Valerie Jarrett served on a Chicago civic organization with a director of the bank, and President Obama himself has singled out the bank for praise in lending to low-income communities.
But the bank has made its share of bad bets, and some of the Wall Street firms that have given money have said they've received political pressure to contribute to the bailout of a business that under normal circumstances would have been left to fail.
The banks have agreed to contribute $140 million to bail out the bank, while the federal government will donate tens of millions more, according to people close to the talks. In addition to major Wall Street firms like Goldman Sachs (GS: 137.81, 0.4, 0.29%), which agreed to contribute $20 million to the bailout effort, as well as Citigroup (C: 3.7693, 0.0493, 1.33%) and JPMorgan (JPM: 39.35, 0.33, 0.85%), General Electric's (GE: 17.2001, -0.0299, -0.17%) GE Capital will also contribute $20 million to the rescue effort. All the firms have either received massive government assistance during the financial crisis or, in the case of Goldman Sachs, are facing multiple regulatory investigations into their business practices.
The bailout has been controversial. Senior Obama adviser Valerie Jarrett served on a Chicago civic organization with a director of the bank, and President Obama himself has singled out the bank for praise in lending to low-income communities.
But the bank has made its share of bad bets, and some of the Wall Street firms that have given money have said they've received political pressure to contribute to the bailout of a business that under normal circumstances would have been left to fail.
Friday, May 14, 2010
The SEC sued Goldman Sachs; now, Goldman is rounding up big contributors to salvage an Illinois bank closely tied to Obama
Today it was reported that Goldman Sachs CEO Lloyd Blankfein has been calling Wall Street friends to cough up $125 million to save ShoreBank, which faces federal closure next week. Rep. Jan Schakowsky suggested in January that Illinois taxpayers foot the bill. That would have been the first state-led bank bailout in U.S history. The idea was abandoned–so it appears the government is shaking down Goldman Sachs instead.
ShoreBank has close connections to the Obama administration, including controversial figures such as former “green jobs czar” Van Jones. Its executives have contributed in the past to Rep. Schakowsky and other Illinois politicians. ShoreBank did not just make loans in poor communities–there are other local banks that do that without getting into trouble–but also specifically made loans that the recipients had little hope of repaying.
Now ShoreBank is calling in some political favors, and the politicians are responding with a classic Chicago-style shakedown. It is probably no coincidence that Goldman Sachs suddenly took an interest in ShoreBank after it was slapped with a federal civil fraud lawsuit and a criminal investigation. Many Wall Street observers believe that the charges against Goldman Sachs were politically motivated, in timing if not in substance.
Regardless, Mr. Blankfein got the message, telling Goldman Sachs shareholders last week that he would try to rebuild the company’s image. He called up other bailed-out institutions that are being threatened with federal charges–Bank of America, Citigroup, and JP Morgan Chase–and got them to cough up millions for ShoreBank. So although the ShoreBank bailout is “private,” American taxpayers are still indirectly on the hook.
ShoreBank has close connections to the Obama administration, including controversial figures such as former “green jobs czar” Van Jones. Its executives have contributed in the past to Rep. Schakowsky and other Illinois politicians. ShoreBank did not just make loans in poor communities–there are other local banks that do that without getting into trouble–but also specifically made loans that the recipients had little hope of repaying.
Now ShoreBank is calling in some political favors, and the politicians are responding with a classic Chicago-style shakedown. It is probably no coincidence that Goldman Sachs suddenly took an interest in ShoreBank after it was slapped with a federal civil fraud lawsuit and a criminal investigation. Many Wall Street observers believe that the charges against Goldman Sachs were politically motivated, in timing if not in substance.
Regardless, Mr. Blankfein got the message, telling Goldman Sachs shareholders last week that he would try to rebuild the company’s image. He called up other bailed-out institutions that are being threatened with federal charges–Bank of America, Citigroup, and JP Morgan Chase–and got them to cough up millions for ShoreBank. So although the ShoreBank bailout is “private,” American taxpayers are still indirectly on the hook.
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