Frank urged Waters to steer clear of trouble

Rep. Barney Frank, chairman of the House Financial Services
Committee, told congressional investigators he warned embattled Rep.
Maxine Waters to steer clear of a conflict involving a failing bank whose board
once included her husband.

Waters (D-Calif.) sought advice from Frank (D-Mass.) as she
was pressing the Treasury Department to aid minority-owned banks while it
prepared to bail out the collapsing financial services industry in September
and October of 2008. Waters had set up a meeting with Treasury officials and
officials from the National Bankers Association, but the only bank represented
there was OneUnited Bank, for which her husband Sydney had worked.

The meeting is at the center of allegations against Waters
disclosed Sunday in a report released by the House Ethics Committee.

According to the report, Frank told investigators that
Waters had approached him for advice on the potential conflict of interest
involving her husband. Frank said he urged her to “stay out of it” and arranged
to have his staff take over the OneUnited Bank issue from Waters.

The report does not detail whether Waters spoke with Frank
before or after she set up the meeting with the Treasury Department, but an
aide to the congresswoman told The Hill on Monday that the conversations with
Frank occurred after Waters contacted Treasury Secretary Henry Paulson about
the broader difficulties minority-owned banks were facing because of the
collapse of the mortgage giants Fannie Mae and Freddie Mac. When she realized that
OneUnited Bank was facing particular peril, she sought out Frank, the aide
said.

Waters contends that she set up the Treasury meeting for the
benefit of the National Bankers Association and minority-owned banks in
general, and not OneUnited Bank in particular. “I have not violated any House
rules,” she said in a statement Monday.