Crony Capitalism Shores Up Shore Bank
The humbugging Chicago Tribune comes out in favor of a Federal bail out of the leftwing cronies at Shore Bank
This institution has made Chicago stronger. It deserves to be saved, so it can continue that work.
The big banks may be trying to burnish their image. They’re tired of being bashed by the White House, Congress, Main Street and everyone at the corner bar.
A list of the corporate shareholders at Shore Bank tells a story of insider trading and crony capitalism
Allstate Insurance Company
Bank of America Corporation
BP Corporation North America Inc.
Calvert Social Investment Equity Fund Catholic Healthcare West
Center for Community Change
Charles Stewart Mott Foundation
Chicago Community Foundation
CNA Financial Corporation
Cooperative Assistance Fund
Cummins Foundation Inc.
Development Equity Fund, L.L.C
Domestic and Foreign Missionary Society
of the Protestant Episcopal Church of the US
Dominican Sisters of Springfield, IL
Episcopal Diocese of Northern Michigan
F.B. Heron Foundation
Harris Bankcorp, Inc.
Health Care Service Corporation
Illinois Prepaid Tuition Trust Fund
Irving Harris Foundation
JPMorgan Chase & Co.
John D. and Catherine T. MacArthur Foundation
LaSalle National Corporation
Lumbermens Mutual Casualty Company
MAF Investments, Ltd.
Marquette Community Foundation
MBNA Community Development Corporation.
New Prospect Foundation
Northern Michigan University
Northern Trust Corporation
Prudential Insurance Company
R.D. Merrill Company
Regency Savings Bank, F.S.B.
South Shore Commission
State Farm Mutual Automobile Company
Twenty-First Century Foundation
UIDC Holdings, L.P.
Unitarian Universalist Congregation at Shelter Rock
United Church of Christ/ Local Church Ministries.
Wells Fargo Bank, N.A.
Our pals at Chicago News Bench thinks Shore Bank may be “too green to fail”, and a familiar face in Illinois Corruption shows up:
How does Jan Schakowsky fit into all of this? She has been trying for some time to get a federal bailout for ShoreBank. An excellent report by The Central Illinois 9/12 Project, posted at BigGovernment, tells us the following (emphasis added):
In 2009, Shorebank received more than $35 million in federal funds for grants and new market tax credits. Despite this new flow of funds to extend to their customers and loan recipients, Shorebank reported a loss of $50 million in 2009 alone and was issued a “cease and desist” order by the FDIC and the Illinois Department of Financial and Professional Regulation. In addition, ShoreBank was receiving strong warnings from the Federal Reserve Bank of Chicago. Their dire financial state had lead them to initially seek a “bailout” from the State of Illinois, promoted by Chicago Congresswoman Jan Shakowsky and Senator Dick Durbin. However, they have since decided that they can find capital without seeking state help.Additionally (emphasis added):
In February , Secretary Geithner proposed “enhancement” to TARP funds specifically aimed at community development banks that would allow them to receive capital investment funds at a 2% rate (compared to the standard 5% rate) and to receive federal TARP funds that would be matched to funding received from private institutions. Chicago Congresswoman Jan Schakowsky wants ShoreBank to be eligible for such fundingand has even suggested that such funding would be equivalent to a jobs program for the area. “Plain and simple, this is a jobs program,” she says. “The funds from this program will go directly to the people and communities that need it most which will expedite hiring and rebuild a vibrant economy”
Joel Pollack (R Candidate vs. Jan Schakowsky in Illinois 9th) makes it clear, this is simple pay to play corruption
Why is Rep. Jan Schakowsky trying to use Illinois taxpayers’ money to bail out ShoreBank?
Rep. Schakowsky and fellow Illinois Democrat, Sen. Dick Durbin, have pressured state officials to meet with the bank to discuss a $100 million bailout.
This would apparently be the first bank bailout by a state government–not just in Illinois, but in any state.
The reason ShoreBank is in trouble is quite simple: it made too many bad real estate loans, and fell below the capital requirements required by regulatory authorities.
Its political supporters point to its mission of helping borrowers in low-income communities. But ShoreBank is hardly the only struggling bank to serve those customers.
Why is Rep. Schakowsky only helping ShoreBank? After all, when the Bank of Lincolnwood failed last year, Rep. Schakowsky did not save it–and that bank, unlike ShoreBank, was in her own district.
The answer may lie in the history of campaign contributions by ShoreBank executives and employees.
Federal Election Commission records reveal that ShoreBank executives and employees gave thousands of dollars to Rep. Schakowsky and Sen. Durbin.
They also gave heavily to Barack Obama’s presidential campaign. Indeed, Crain’s Chicago Business reports that “President Obama and the first lady are former neighbors of ShoreBank executives.”
Other ShoreBank-related contributions include Democrats across the country and left-wing organizations such as MoveOn.org.
The ShoreBank bailout would seem to be more of the same Blagojevich-style, pay-to-play politics that Illinois has suffered under for too long.
The people of Illinois are tired of bailouts. We know that the $700 billion TARP bailout–which both Rep. Schakowsky and Sen. Durbin voted for–was a failure.
We know that Illinois–which cannot even afford to pay state pensions–cannot afford to start bailing out banks.
And we are tired of seeing our elected representatives using our tax dollars to help their cronies and contributors.
As usual, when they are caught, Rep. Schakowsky and her colleagues will point to their supposedly good intentions, and those of ShoreBank.
But this bailout is simply wrong. It is all about the greed of the politicians, not the needs of the people.
Siegel characterizes the transaction as unusual, however, because of the way Wright sold the property to Trinity and the way the deal was financed, with the attached $10 million line of credit.
A spokesman for ShoreBank, the Chicago-based financial institution that secured mortgages for the loans, said the deals were aboveboard.
This is crony capitalism on steroids . Insider trading makes doing business in Illinois nearly impossible without paying politicians for favors. This is Illinois at its worst or as the Tribune puts it
“This institution has made Chicago stronger. It deserves to be saved, so it can continue that work.”