John Ransom

If you thought nation’s financial services were battered under Barney Frank and Chris Dodd, wait until you see who’s batting cleanup for the Democrats in the House. 

Maxine Waters, the ranking Democrat on the Capital Markets and Government

Sponsored Enterprises Subcommittee of the House Financial Services Committee and who serves as the deputy whip for the Democrats in the House- and who will take over for Frank now that he is retiring - is embroiled in another scandal involving money and nepotism.

Waters apparently has paid family members close to $1 million from public or campaign funds since 2007, according to a recent report by Citizens for Responsibility and Ethics in Washington (CREW).

Waters, 74, is next in line of seniority on the House committee after Rep. Barney Frank retires this year. That means that if the Democrats capture back the House, Waters would exercise oversight authority over Fannie Mae, Freddie Mac, FHA, the Securities and Exchange Commission, the New York Stock Exchange and the NASDAQ, as well as all capital formation for new businesses… you know, just to name a few areas.        



Figures gathered by CREW show that Waters paid her daughter’s firm $351,512 in the election cycles 2008 and 2010 for campaign mailings and for fundraising.

Waters also hired her grandson, Mikael Moore, as chief of staff. “Between 2007 and 2010,” writes Crew “Mr. Moore made $491,975. His most recent annual salary was $132,410.”

Hurray for the 1%ers.  

Additionally, Waters has reimbursed herself and her husband for over $15,000 in various expenses, including hotel, office supplies and gasoline. Her campaign has also loaned $25,000 to a non-profit on which she is a board member and of which her daughter is president. CREW says that no payments have been made on the loan.

Waters is already being investigated for using undue influence to secure a $12 million TARP bailout for a bank in which her husband was a director and a shareholder.

The Wall Street Journal reported that prior to the bailout Waters’ disclosure showed the bank stock owned by her husband to be worth between “$250,000 and $500,000.”  The Journal also writes that bank employees “donated $12,500 to Ms. Waters' election campaigns.”

Democrats reportedly have been embarrassed by the fact that Waters would take over from Frank on the financial services committee and have suggested that they could dissuade her. But an article on Politico from late November has Waters actively campaigning for the top slot on finance.

“As the next most senior member of the committee, the current ranking member on the Capital Markets Subcommittee and the former chairwoman of the Housing and Community Opportunity Subcommittee, I hope to use my experience to continue and expand his work in the committee,” quoted Politico from a statement Waters released on Frank’s retirement. “I will continue to champion practical regulations, while making sure they work for consumers and the financial sector, a sector which has the right to be profitable but the obligation to be fair, two concepts which are not mutually exclusive.”

This is not that first time- or the second- that Waters has been in trouble for self-dealing. In 2005, 2006, 2009 and 2011 she was named to CREW’s Most Corrupt politician list.

Recently the Republicans on the ethics panel and one Democrat recused themselves from the current investigation of Waters’ bank dealings, "out of an abundance of caution and to avoid even an appearance of unfairness," said the committee chair according to the LA Times. That likely means bad news for Waters.

There would be no need to “appear” fair if Waters wasn’t about to have the gangplank run out on her by both parties.

If I were an investment banker inclined to make political donations, I’m pretty sure I’d be making them conditional on making sure Waters never gets close to regulating Wall Street.

Make no mistake, the financial services sector is the number one industry group for political donations and they have abandoned Obama and the Democrats, in part because of politicians like Barney Frank and Maxine Waters.    

According to data complied by opensecrets.org Finance, Insurance and Real Estate industries donated $76 million to Democrat presidential candidates in 2008 and $65 million to Republicans. In 2012 so far, Finance, Insurance and Real Estate industries have donated about $6 million to the Democrats for Obama’s reelection and $22 million to Republicans for Obama’s defeat. In 2008, the industry slightly favored Democrats as a whole, with around 52 percent of campaign cash going to liberals and 48 percent to Republicans. So far, in this election cycle, the GOP has the advantage 52 percent to 32 percent.     

Conservatives will remember Waters fondly for her several foot-in-mouth moments, the most famous of which was when she ragged on an oil executive for high gas prices by saying “This liberal will be all about socializing, uh, uh, uh….”

What she was trying to say, yet not say at the same time, was that she would be all about socializing the oil industry, like her friend Hugo Chavez did down in Venezuela.

Can’t wait until she gets a crack at, uh, uh, uh, Wall Street.

But you can’t blame the Street for wanting to put off that opportunity for a long, long time.  


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John Ransom

John Ransom is the Finance Editor for Townhall Finance.