Between Ensign, Sanford and Palin, we’ve had our hands full of scandal. But we’d like to dive into the conflict-of-interest issues surrounding Sen. Daniel Inouye (D-HI), who apparently intervened to get his Hawaii bank TARP money — a bank in which he’d invested most of his wealth and helped to found.
As ProPublica first reported, the bank, Central Pacific Financial, received $135 million in bailout funds after one of Inouye’s staffers called the FDIC to inquire about the application.
Central Pacific had lost $146 million in the second quarter of 2008, more than the profits of its last three years, and those losses were depleting its capital reserves. It failed to win a favorable recommendation for bailout funds from the FDIC.
The institution applied for the money in October. When there was no word by late November, a bank official called Inouye’s office for help. The next day, an aide called the FDIC and, according to Inouye, left a voicemail.
The application was approved soon after.
“This single phone call was the entire extent of my staff’s contact with regard to Central Pacific Bank, to any outside agency,” said Inouye, who hasn’t given interviews on the subject, in a press release.
At the end of 2007, Inouye reported Central Pacific shares worth $350,000 to $700,000. He was one of the founding members of the bank, which opened in 1954 to cater to Japanese-American residents of Hawaii.
Even if he did intervene on behalf of the ailing bank, it wouldn’t be a violation of Senate ethics rules. And other senators pulled for home state banks — but none, it seems, where their own money was invested.
We’re going to be keeping our eye on this one and delve in a little deeper. But we wanted to get you all up to speed in the meantime.