If you're new here, you may want to subscribe to my free Email alerts. Thanks for visiting!
SMALL INSTITUTION BASED IN CHICAGO RECEIVES LAST-MINUTE HELP FROM GIANT WALL STREET LENDERS, BUT WHY?
by Sharon Rondeau
(May 20, 2010) — A “small, Chicago-based bank” received a little help from some very generous friends on Wednesday.
According to The Financial Times, the bank “has important political friends in Washington, including former President Bill Clinton. Another report describes Shorebank as “a very politically connected bank.”
At least two members of Congress have questioned Obama if he exerted any influence to infuse the small community bank with cash from the three large Wall Street firms so that it would qualify for an additional $75,000,000 from the federal government. A letter has been sent to Obama asking for records of the negotiations which took place among the bank, the administration and the executives of the firms loaning the money.
Obama has apparently lauded Shorebank for its practice of loaning money to communities with lower incomes, and his “senior adviser, Valerie Jarrett, has served on a Chicago civic organization with a Shorebank director.”
Other companies involved in the bank’s rescue are J.P. Morgan and Bank of America. As of last Saturday, Shorebank’s future appeared grim. Reportedly, the bank has “has high-profile supporters in Washington and Chicago.” Illinois Congresswoman Jan Schakowsky (D) has been encouraging the financial giants to “spare one of the victims … of their recklessness.”
Attempts to save the failing bank by state financial officials have been under way since January of this year. At that time, one of the officers involved in discussions to possibly save the bank stated that “the White House is concerned about ShoreBank.” The same article states that the co-founders of the bank live in Obama’s former neighborhood of Hyde Park.
Writer Michelle Malkin points out a very close tie between Shorebank and Obama: a video of Obama visiting Kenya in 2006 in which Shorebank is depicted as a model for a program to make small loans to poor people in Kenya. In the video, Obama makes promises of U.S. economic help to Kenya. The video does not explain why Obama and his wife chose to visit Kenya at that time over all of the other poor African countries.