Rep. Maxine Waters Faces Heat of Ethics Charges

WASHINGTON, Aug. 10, 2010 -- When the House of Representatives interrupts its six-week vacation today for one day of legislative business, Rep. Maxine Waters will be returning not only to Washington's scorching summer, but also to the political heat on Capitol Hill.

The House Ethics Committee released new details Monday from its investigation of the 10-term Democrat from California. Among the charges Waters faces is that she allegedly broke House conduct rules for her role helping a minority-owned bank obtain federal bailout money during the financial collapse in September 2008.

The charges stem from a meeting that Waters' congressional office requested with then-Treasury Secretary Hank Paulson at start of the financial crisis in September 2008. Waters and Paulson did not attend the meeting, but senior Treasury officials and members of the National Bankers Association (NBA), a trade organization representing over 100 minority-owned firms, did.

An ethics report found that at that meeting and in follow-up conversations "the discussion centered on a single bank -- OneUnited," where Waters' husband was a board member from 2004 to 2008.

On financial disclosure forms, the couple reported owning $352,089.64 worth of stock at OneUnited in June 2008. By the end of September, the value of the stock had plummeted to $175,000, but what remained was salvaged thanks to a portion of the $700 billion Wall Street bailout.

OneUnited -- a Boston-based bank that requested $50 million in federal aid and ultimately obtained more than $12 million in TARP funds -- would have likely failed without intervention from Waters' office, the report said.

Because Waters' stock would have been rendered worthless if OneUnited had failed, the violations "constitute compensation accruing to the beneficial interest of [Waters]," according to the committee.

According to House rules, "A member ... may not receive compensation and may not permit compensation to accrue to the beneficial interest of such individual from any source, the receipt of which would occur by virtue of influence improperly exerted from the position of such individual of Congress."