After a three-year investigation, the US House Ethics Committee on Friday cleared Representative Maxine Waters of improperly arranging a 2008 meeting between Treasury officials and executives at OneUnited, the Boston bank in which her husband is an investor.
Waters, a California Democrat, had been accused of violating House ethics rules because of her husband’s connection to OneUnited, a charge she has long denied. Ethics Committee members concluded Friday that her intent was to help all members of a minority bankers association when she made a call to Henry Paulson, then head of the US Treasury, during the financial crisis.
OneUnited later received a $12 million loan through the Troubled Asset Relief Program, despite being sanctioned by bank regulators for poor loan management and high pay and perks for top executives. It has yet to pay back the money.
Waters has said she asked Paulson to meet with the group because many banks had suffered serious losses as a result of the failure of mortgage giants Fannie Mae and Freddie Mac. During the meeting, however, OneUnited chief executive Kevin Cohee and general counsel Robert Cooper — who was incoming chairman of the National Bankers Association — allegedly focused attention on their own bank’s plight.
Waters’s office declined to comment on the committee’s decision to close the ethics inquiry, as did a spokeswoman for OneUnited.
In recent weeks, OneUnited executives have been mired in a high-profile bankruptcy case in Boston. One of the bank’s largest customers, the historic Charles Street African Methodist Episcopal Church, filed for bankruptcy to keep the bank from foreclosing on it for not paying back nearly $5 million owed the bank.
The church’s financial problems hit about the same time as OneUnited was dealing with $50 million in losses on Fannie Mae and Freddie Mac securities.
US Representative Barney Frank, the Newton Democrat who was chairman of the House Financial Services Committee in 2008 and had a hand in ensuring that OneUnited and other community banks could apply for federal bailout funds, said in a statement that he was “pleased but not surprised” by the Ethics Committee’s findings.
“Neither Representative Waters nor I ever intervened specifically to try to influence any decision by the financial regulators as to whether or not such funds should be advanced,’’ Frank said. “It is now clear not only that Representative Waters did nothing wrong, but that there was no impropriety by any [House] member, including me.”
With the ethics charges behind her, Waters could be in line to succeed Frank, who is retiring, as the top Democrat on the House Financial Services Committee.
The Ethics Committee is still considering whether Waters’s spokesman and grandson, Mikael Moore, acted improperly when he allegedly had dealings with OneUnited as part of the Treasury talks. Moore has denied doing anything wrong.