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Washington Post: In defense of Maxine Waters, Part 2

August 19, 2010

By Jonathan Capehart

After reading through the documents issued first by the Office of Congressional Ethics (OCE) and the Statement of Alleged Violation from the House Committee on Standards of Official Conduct, Rep. Maxine Waters (D-Calif.) has a stronger case to make in her defense than Rep. Charles B. Rangel (D-N.Y.), the pity-party pol from Harlem who hijacked the House floor yesterday.

In part one, I focused on the Sept. 9 meeting between the National Bankers Association and the Treasury that was arranged after a phone call from Waters to Henry Paulson, President George W. Bush's secretary of the treasury. There was concern that the failure of Fannie Mae and Freddie Mac would take down minority-owned banks, which held preferred shares of Fannie and Freddie stock, with them.

Now, about Waters's husband's investment in OneUnited, the teetering Boston-based bank that eventually secured $12 million in TARP funds. Even the ethics committee notes that at OneUnited's height, the Waters's investment "accounted for somewhere between 4.6 percent and 15.2 percent of the couple's combined net worth in 2007. What was valued at $351,751.68 on June 30 clocked in at $175,000 by Sept. 30. In her memorandum of support of a motion to dismiss, Waters pointed out that her husband owned a puny 0.10 percent of all outstanding shares of OneUnited stock.

Throughout history we've seen politicians and their families do just about anything to feather their nests.I find it hard to believe that Waters would go to such extraordinary lengths to hold onto (relative to their wealth) a few bucks. It doesn't make sense that she would risk so much for relatively so little. And how do we even know what percentage of their wealth was tied up with OneUnited? Waters, as required, consistently reported her husband's ownership stake on her Financial Disclosure Statements. By contrast, Rangel failed to disclose $600,000 in income and assets. His financial amnesia was cured after the ethics committee started investigating him two years ago.

And then there's the conversation between Waters and Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) where she expressed her concern about a conflict of interest. This tete-a-tete happened after the Treasury meeting on Sept. 9, when it became clear to Waters that OneUnited and just one other bank were vying for Treasury help. Frank told Waters he'd handle it. According to the OCE memorandum of interview with Mikael Moore, her chief of staff, "He became aware of this conversation when, as he went through his tasks with [Waters] one day following the September meeting, she indicated that he need not work on the minority-bank matters because, as she said, ‘I spoke to Barney. Don't worry about it.'"

According to the memo, Moore said that he continued to field calls and emails from Cooper and the NBA because he thought Waters meant not to work on those issues that day. That's not an unreasonable assumption. But you know what happens when you assume.The ethics committee is right to highlight that Moore is Waters's grandson. This might feed some conspiracy theories, but it does not concern me. As a Post profile from last April makes clear, the impressive 31-year-old had to earn his way to the chief of staff role. And just as I said in part one, I'm hard pressed to see what he did that was outside the norm of constituent services.

Waters is the third-ranking member on the financial services committee. Over the course of her 20 years in Congress, she carved out a niche as the expert on and go-to person for minority-owned banks. She arranged a meeting with Treasury for a group that wanted to discuss an issue of serious concern that the treasury secretary himself said he and the department were already trying figure out. She sought advice when a conflict became clear after that meeting and ceased her involvement. But Waters failed to make it clear to her chief of staff that he should, too. And, yes, ultimately, the value of her husband's bank stock was saved from becoming worthless.

As a result of all that, the ethics committee says Waters failed to supervise her staff and that their respective actions might appear to not have adhered to the spirit of House ethics rules. The number one charge against her is that she did not "behave at all times in a manner that shall reflect creditably on the House." How violation of this rule is defined is subjective and would no doubt ensnare most of the chamber if applied as broadly as it's being applied to Waters. Read the ethics committee's rejection of her motion to dismiss to get a feel for just how subjective.

Rangel's rambling rant yesterday didn't reflect creditably on the House, either. The bald sense of entitlement that has come to light over the last two years is to my mind much more egregious than anything Waters stands accused of doing. If Rangel has the temerity to put up a fight given the stench surrounding him, then it's no wonder Waters insists on defending herself. In this case, she's not perfect. But she's not corrupt, either.