It appears that the bailout is meant to protect Senators’ personal wealth. Perhaps the most troublesome issue is not that the Senator seems to have used his office to protect a personal investment, but that according to the Senate defined rules (of conduct?), Sen Inouye (D) would not have broken any even if he placed the call/made a request to save this bank. Hmmm. (Pitfalls of self-regulating anyone?)
- Sen. Daniel K. Inouye’s staff contacted federal regulators last fall to ask about the bailout application of an ailing Hawaii bank that he had helped to establish and where he has invested the bulk of his personal wealth. The bank, Central Pacific Financial, was an unlikely candidate for a program designed by the Treasury Department to bolster healthy banks. The firm’s losses were depleting its capital reserves. Its primary regulator, the Federal Deposit Insurance Corp., already had decided that it didn’t meet the criteria for receiving a favorable recommendation and had forwarded the application to a council that reviewed marginal cases, according to agency documents.
Two weeks after the inquiry from Inouye’s office, Central Pacific announced that the Treasury would inject $135 million….
Inouye said he was not attempting to influence the outcome. The statement did not address Inouye’s personal role in the inquiry, including whether he directed the aide to make the call or knew at the time that it had been made.
Even if Inouye were directly involved, it would not violate the rules the Senate sets for itself, experts said.
Both the FDIC and the Treasury said the decision was not affected by the involvement of Inouye’s office.
Inouye reported ownership of Central Pacific shares worth $350,000 to $700,000, some held by his wife, at the end of 2007. The shares represented at least two-thirds of Inouye’s total reported assets. Inouye has requested a delay in filing his annual financial disclosure for 2008, which was due this spring, and he declined to provide the current value of his investment. Since the end of 2007, the bank’s stock has lost 79 percent of its value.