Only healthy banks are supposed to get TARP funds, and OneUnited Bank in Boston is not a healthy bank. So why did it wind up pocketing a $12 million infusion from the Treasury? Because powerful Massachusetts Rep. Barney Frank interceded for it, the Wall Street Journal reports. Bankers, regulators, and politicians are complaining that bailout funds are being doled out based more on political influence than any other criteria.
Alabama’s top banking official, for example, credits the state’s two most influential lawmakers with finagling a TARP windfall; five Alabama banks are getting funds. “It’s totally arbitrary,” says South Carolina’s governor. “If you’ve got the right lobbyist and the right representative …. you get the golden tap on the shoulder.” The Treasury refutes that assertion, saying politics play no role in the process.