Our activist friends over at Justice Watch are just getting started. Recently, they filed a lawsuit against the US Treasury to "obtain records related to evaluation procedures used by the government to determine which financial institutions received funds from TARP." The focus of the inquiry is a potentially iniquitous $12 million cash injection provided to Boston-based OneUnited Bank, at the urging of Barney Frank.
The original FOIA had been filed on January 23, 2009, and here were the primary items of information sought: [click to enlarge]
Judicial Watch concludes:
As reported in the January 22, 2009, edition of the Wall Street Journal, the Treasury Department indicated it would only provide funds to healthy banks to jump-start lending. Not only was OneUnited Bank in massive financial turmoil, but it was also "under attack from its regulators for allegations of poor lending practices and executive-pay abuses, including owning a Porsche for its executives' use." Congressman Frank admitted he spoke to a "federal regulator" and Treasury granted the funds.
"TARP has created a whole new form of earmarking, where politicians lobby to receive mass cash infusions for special interests in their states. OneUnited Bank did not appear to be a suitable candidate for federal assistance until Barney Frank intervened and shook loose a $12 million TARP grant. The American people deserve to know if Congressman Frank's intervention improperly colored the decision to give precious tax dollars to his hometown bank," said Judicial Watch President Tom Fitton.
Zero Hedge welcomes this initiative to expose ever increasing and costly behind the scenes dealings, especially of a variety that should be made public under the auspices of the Freedom Of Information Act. The implications, such as the ensuing fallout if it is indeed demonstrated subsequent to the disclosure gleaned from this lawsuit that Barney Frank acted improperly, should hopefully be grounds for elimination of ongoing kickbacks arising from the abuse of taxpayer funding to prop the fringes of the Zombied financial system. As has been the case with Colonial, Guaranty and Corus, the perpetuation of the viability fallacy lasts only so long, and the final cost to the US taxpayer is not only much greater in the end, but carries the acute risk of impacting confidence in the financial system - the very thing that the FDIC and comparable organizations has been trying to foster since the crisis began.
hat tip hedging in