Waters’ troubling bank ties

Rep. Maxine Waters, the Democratic congresswoman who has represented a swath of South Los Angeles and surrounding communities such as Inglewood and Hawthorne for nearly 20 years, is one of Southern California’s toughest and most influential lawmakers.

Dating back to her days in the Assembly, where she was an early champion of the anti-apartheid Sullivan Principles, Waters has an admirable record of championing issues important to working men and women and, especially, to people of color. But she also has shown a disturbing inability to adequately distinguish her family’s interests from those of the public.

Nowadays, Waters is not only an important voice in the Congressional Black Caucus but a ranking member of the Judiciary and Financial Services committees. This week, the Wall Street Journal and the New York Times reported that Waters used her access as a senior member of the latter committee to arrange two meetings between officials of the Treasury Department and a group of banks owned by African Americans.

Ostensibly, the bankers wanted to talk because their institutions had been hard hit by the implosion of Freddie Mac and Fannie Mae. According to the New York Times, though, Kevin Cohee -- chief executive of OneUnited Bank -- took the opportunity to plead for a $50-million bailout of his institution.

“Here you had a tiny community bank that comes in and they are not proposing a broader policy -- they were asking for help for themselves,” former Treasury aide Stephen Lineberry told the Times. “I don’t remember that ever happening before.”

Officials told both papers that they were even more taken aback when they discovered that Waters’ husband, Sidney Williams -- a U.S. ambassador to the Bahamas under President Clinton -- was a former director of One- United Bank, that she herself had once owned as much as $500,000 worth of its stock and that her husband still holds two blocks of its securities, each valued somewhere between $250,000 and $500,000. Waters had arranged the meetings without disclosing any of these facts.

Whoops.

Waters sees nothing wrong in any of this. As she said in a statement: “I have been an outspoken advocate for minority communities and businesses in California and nationally for decades.

And a good one. OneUnited was one of the first minority-owned institutions to receive bailout money -- $12 million -- from the feds’ Troubled Asset Relief Program. This despite the fact that less than six months ago, the FDIC sanctioned the bank for “unsafe or unsound banking practices,” including Cohee’s excessive compensation, which covered the cost of his 2008 Porsche SUV and the maintenance on his $6.4-million ocean-view compound in Pacific Palisades. OneUnited has a pretty good record of lending in L.A. minority communities -- the usual rationale for promoting minority bank ownership -- but a spotty one in Massachusetts and Florida.

This isn’t the first time Waters has run into this sort of family trouble. In 2004, an investigation by this paper showed that her husband, son and daughter had made more than $1 million trading on their relationship to the congresswoman. Their “businesses” included a golf course franchise obtained from L.A. County and at least $500,000 in commissions Williams earned consulting for a bond underwriting firm seeking business from public agencies in Waters’ district. Williams had no previous experience in the bond business.

Like the bank intervention, none of this is illegal, but it makes Waters look sly and sleazy. So why does it keep happening? Why are there no consequences? For one thing, Waters’ 35th District is considered one of the 10 safest districts in the House by nearly everyone who keeps track of these things. A dead parrot could win there if it had “Democrat” after its name. Waters has won at least 80% of the vote in every election for 20 years, except for 2002, when she got 78%.

This last time around, she raised $777,231 -- mostly from groups with business before her committees -- while her Republican rival, Ted Hayes, amassed just $13,227.

Waters is electoral heir to one of L.A.’s truly great figures, the late Augustus “Gus” Hawkins, who held that seat for decades. Hawkins was not only California’s first African American in Congress, he was the author of the Equal Employment Opportunities Commission and the coauthor -- with his friend Hubert Humphrey -- of the landmark Humphrey-Hawkins Full Employment Act.

It’s a heady legacy, but somehow in the 70-year-old Waters’ case, it’s faded into a tawdry sense of entitlement -- a sense that it’s OK to do well out of doing right, even though it’s not.

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timothy.rutten@latimes.com