Garden State Politics

Posted by admin on February 9th, 2010 in Uncategorized

Senator Bob Menendez is caught again. Not that he did anything illegal, but writing a federal regulator to take favorable action on a business owned by a contributor is still a shady bit of pool:

Sen. Robert Menendez, (D-N.J.) pressed federal regulators to approve the acquisition of a doomed Elizabeth bank whose officers included contributers to his campaigns, according to a report in The Wall Street Journal (Subscription required).

The report said the July 21 letter from Menendez to the Federal Reserve asked the agency to approve the sale of First BankAmericano to JJR Bank Holding Co. of Brick. BankAmericano’s chairman was attorney Joseph Ginarte, who has contributed $30,000 to Menendez since 1999 and the bank’s vice chairman was state Sen. Raymond Lesniak, (D-Union).

From the WSJ article:

While lawmakers routinely forward requests from constituents to government agencies, it is rare for them to make specific requests along the lines of this letter asking specific actions, bank attorneys and congressional aides said. One reason is to avoid any appearance of trying to influence the regulatory process for political ends.

snip

When the bank failed, the shareholders, many of them board members, lost their investments. Had the acquisition been approved, Messrs. Ginarte and Lesniak still would have lost a large chunk of their investment but not all, according to First BankAmericano’s former chief executive, Holly Bakke. The size and value of their investments couldn’t be learned.

Sen. Robert Menendez of New Jersey urged the Fed to save a struggling bank in his state. But he didn’t disclose his link to campaign contributors who were on the bank’s board. The Fed didn’t act on the request.

William Black, a federal bank regulator during the savings-and-loan crisis two decades ago, and like Mr. Menendez a Democrat, called the senator’s letter “grotesquely inappropriate,” given his ties to the two directors. Mr. Black, now a law professor at the University of Missouri-Kansas City, said the letter crossed an unofficial line by asking regulators to approve an application instead of simply asking that it be given consideration.

The article goes on to say that Menendez claims: “If any New Jersey constituent—regardless if it is a family or a local community bank—comes to me seeking assistance with a legitimate federal matter, not only is it important to help, I was elected to help. Telling them ‘no’ would be abdicating my responsibility.”
Agreed. So where are the identical letters for the other banks in NJ that failed?

I’m not denying that the benefits to not letting the bank fail would have been spread throughout entire communities. But why should a bank have to “serve mostly Hispanics” to get attention? Honestly, our community banks, in every community, needed help. It shouldn’t come at the cost of political support…or even the appearance of such support.

Menendez should know better. The fact he got caught up in this shows that he simply doesn’t care about ethical rules.

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