I just received the seriously disturbing news that FDIC chair Sheila Bair, one of the few national economic leaders who worked hard to curb the excesses and corruption of Wall Street and stand by middle class interests, may have run into some conflict of interest problems.
According to a release from the Huffington Post Investigative Fund‘s Keith Epstein and David Heath:
Sheila Bair, one of the chief regulators overseeing Bank of America’s federal rescue, took out two mortgages worth more than $1 million from the banking giant last summer during ongoing negotiations about the bank’s bailout and its repayment. In the weeks between the closings on her two mortgage loans, Bair met with Bank of America’s chief negotiator in the bailout talks.
To avoid conflicts of interest, the Federal Deposit Insurance Corp., which Bair heads, prohibits employees from participating in “any particular matter” involving a bank from which they are seeking a loan. Bair did not seek or receive an exemption until last week, when her agency gave her a retroactive waiver from the rules after an inquiry by the Huffington Post Investigative Fund.
Bair has been in a tug of war on a number of policy issues with Treasury Secretary Timothy Geithner who tried to have her dumped when the Obama team took the keys to the White House. He didn’t succeed, and she stayed.
I hope that her retroactive waiver keeps her out of a mess that could distract her from her more important responsibilities. But I also hope she does an immediate review of other personnel at the FDIC who may have had similar problems given the flood of bank messes out there that the FDIC had to deal with while employees, like other Americans, may have had to rejigger and reorganize their mortgage circumstances.
They should be shown the same leniency that she received.
And it must be said that given the millions Lawrence Summers took in while moonlighting with various financial services firms, the tax hiccups of Timothy Geithner when he came in, Bair’s mortgage trip should clearly not keep her off a short list of people who could succeed Geithner at Treasury.
— Steve Clemons