© By Bridgette WTPOTUS 2010
Big Government publicized the investigative work of Chicago’s 9-12 Project regarding Shorebank Corporation beginning in April, 2010 and again on May 20th. To further expose the corruption surrounding this bank, Glenn Beck has done further investigation and is tying the bank to radicals in government, government officials, specific groups, individuals, and major companies and banks in what he has dubbed “Crime Inc. “
Recent news organizations have reported that Shorebank needed a bailout, but they weren’t available for TARP funds because they didn’t meet the criteria. They have called on their “friends” for additional cash so they might be eligible for TARP funds. Like other left-leaning, democratic organizations, this bank appears to have many tentacles. Questions arise as to their operations and why they are not being closed by the FDIC for poor management or other regulations. What is it that makes Shorebank so important that they aren’t being allowed to fail? Shorebank was the recipient of Stimulus Funds in the amount of $35 million, yet they need more money less than a year later. One also must question why major “bailed out” corporations like Bank of America and J.P. Morgan Chase are being called on to “save” this bank. The “Bailed Out” are now involved in “Bailing Out?”
Most peculiar is how Shorebank’s logo and motto resemble Obama’s colors in his logos and his pre-election mantra. Their motto, “Let’s Change the World.” Creepy, and telling.
What is the story? Who are the people behind Shorebank and its other entities that are now seem operating both nationally and internationally? Below are the articles from the 9-12 Chicago Project. Those at the 9-12 Chicago Project are to be commended for their work and for exposing what appears to be another organized criminal organization.
Shorebank: Too Green to Fail?
Chicago 9-12 Project
April 5, 2010 by whitneyz
Shorebank is a community bank based out of Chicago that is engaged in microfinancing – a hybrid of capitalism and social justice. They have been supported and promoted by individuals like Van Jones, President Obama, President Clinton, and Secretary Clinton. They have also become heavily involved in the financing of green projects (see here and here).
Interestingly, Shorebank is currently seeking support from a few large banks –all of which have received federal bailout money from the Toxic Asset Relief Program (TARP) and are Shorebank stockholders. These banks include Citigroup, Bank of America, and Chase. Citigroup initially received $25 billion in taxpayer money (plus another $20 billion soon after), and Bank of America initially received $25 billion (plus another $20 billion after that). Neither of these banks has completely paid back their TARP loan. Chase also received $25 billion in bailout funds, but repaid its loan in December of 2009. So rather than seeking a bailout from a state that has a $13 billion budget deficit, Shorebank is seeking to be bailed out by banks that have already been bailed out by federal taxpayers – which is, in essence, an indirect, federally-funded bailout.
However, it may also be surmised that Shorebank may instead be the direct recipient of bailout money. The Department of Treasury has suggested that it may use TARP funds to assist “Community Development Financial Institutions” (CDFIs). The Treasury defines a Community Development Financial Institution as
… a financial institution that works in markets that are underserved by traditional financial institutions. CDFIs are certified by the Department of the Treasury’s CDFI Fund, which was created for the purpose of promoting economic revitalization and community development in low-income communities.
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 funding and 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”.
Shorebank has received free consulting assistance from Promontory Financial, which is headed by a former director of Shorebank, Eugene Ludwig. Ludwig also helped found CapGen, an entity that invests primarily in community banks. Ludwig was formerly Comptroller of the Currency during the Clinton administration. This would not be the first time that Promontory Financial assisted in raising capital for Shorebank. In 2007, Promontory was a key player in a transaction where TIAA-CREF, a real estate developer and financier, deposited $22 million with Shorebank. TIAA-CREF also supported Shorebank in 2009 with the same type of funding via consultants at Promontory. Receiving funding by similar means now would likely help Shorebank raise private funding that would be matched by federal TARP dollars.
What might be the issue with Shorebank? Could they be the next in the line of banks about to fold, or are they the next in line to receive bailout money (either indirectly or directly)? Will they do the unprecedented and become one of the first entities to be bailed out by a state that itself has a $13 billion deficit? With its promotion of green development and new carbon credit distribution, could Shorebank become one of the first banks to be deemed too “green” to fail?
The Central Illinois 9/12 Project became one of the first to expose — beginning this past March on BigGovernment.com – Shorebank’s extensive green and microfinancing agendas, in anticipation of that bank’s impending bailout. Shorebank, a Chicago-based, community-based investment bank, is focused on domestic and foreign microfinancing, is heavily engaged in the financing of “green” projects and “green” jobs, and has a host of ties to the Obama and Clinton administrations. Most recently, we wrote in April about Shorebank seeking a “bailout” from larger financial firms that have previously received bailout money from the federal government. Congresswoman Jan Schakowsky had previously proposed that the bank receive funds from the State of Illinois to help cover its loss of capital since the beginning of the nation’s economic downturn in 2008.
As we previously wrote, Shorebank would potentially be eligible for TARP funds if it were to be recognized as a “Community Development Financial Institution.” In order to to received needed federal TARP money and prevent seizure by the FDIC, Shorebank needed to receive appropriate matching funds from private sources. News stories have been released over the past several days indicating that Shorebank has potentially received such funding.
Shorebank has reportedly received $20 million from General Electric, $20 million from Goldman Sachs, and $20 million from Citigroup – with additional large funds being promised by J.P.Morgan Chase, Bank of America, and Morgan Stanley. Shorebank also has received funds from the Northern Trust Corporation, State Farm, and Harris N.A. It has been reported that the bank could also receive funds from Wells-Fargo and PNC Financial Services. Assistance from these financial institutions puts Shorebank’s raised capital from private sources within the range needed to make it eligible for TARP funds.
As we reported previously, Citigroup, Bank of America, and Chase all received tens of billions of dollars in taxpayer money from TARP. Does this then mean that Shorebank is being bailed out by bailout money?
And still yet, there is another layer to Shorebank’s impending bailout that must be exposed: cronyism. Mary Cahillane was named Executive Chair of Shorebank in November. Cahillane had previously worked at Bank of America as an operational risk executive. Goldman Sachs executive Lloyd Blankfein has been reported to have been personally involved (*site subscription required to access this link) in arranging for the assistance given to Shorebank.
Such assistance from Goldman Sachs would enable that bank to fulfill its “responsibilities” under the Community Reinvestiment Act (CRA) of 1977 to prevent discriminatory lending practices and increase lending in poor neighborhoods. And who was a strong advocate for the the passage of CRA? One of Shorebank’s founders, Ron Grzywinski, who appeared before Congress to advocate for the bill (and was the only banking executive to do so) and who served as on President Carter’s National Consumer Bank Board.
In addition, Goldman Sachs’ relationship with the White House has concerned some, as its executives have met with President Obama and/or his officials on multiple occasions – and Goldman Sachs and its employees have donated nearly a million dollars to President Obama’s presidential campaign.
In addition to Shorebank’s ties to President Clinton, Secretary Clinton, and President Obama, Shorebank also has ties with one of President Obama’s chief advisors, Valerie Jarrett. Jarrett served on the Board of Directors for Chicago Metropolis 2020, a civic organization headed by Shorebank director Adele Simmons. The ties between Jarrett and Simmons are depicted pictorially on Muckety.com.
These associations — and the eagerness displayed by various financial institutions to “rescue” Shorebank – lead necessaily to the questions now being asked by two Republican Congressmembers, Spencer Bachus (AL) and Judy Biggert (IL). A letter has been sent by Bachus (Ranking Member of the House Financial Services Committee) and Biggert (Ranking Member of the Subcommittee on Oversight and Investigations) to President Obama asking him to respond by June 2nd to a series of questions relating to Shorebank.
So our question is this: How is it that the federal government got into the business of picking winners and losers? Ten other Illinois banks closed in 2010 alone. Did those banks have the same opportunities as Shorebank? How is it that only Shorebank was able to secure such huge amounts of private funding? Do the intimate connections that the banks and individuals who are working to bail out Shorebank have with the Obama administration have anything to do with its ability to secure such funds? These questions must be answered, and we at the Central Illinois 9/12 Project will continue to ask these questions and seek their answers.
UPDATE: January 10, 2012
Snips from the Chicago Daily Observor, John Powers
Surprise! Politically Infested ShoreBank Fails…Again!
When we got around to looking at ShoreBank, they had no records of where they loaned money and did no reporting to the Bank Regulators, responding, ‘Of course we loan money to our own neighborhood, we’re ShoreBank”, which was backed up by the then overlords at the Tribune.
Take a look at this from Bloomberg
ShoreBank Corp., the holding company for a Chicago lender that served low- and moderate-income communities before being closed by regulators in August, filed for bankruptcy protection under Chapter 11.
ShoreBank said it had about $63.5 million in liabilities and about $19.2 million in assets in a filing yesterday in U.S. Bankruptcy Court in Chicago. Eleven of the holding company’s units also sought bankruptcy.
You can read the whole article, but you won’t find any mention of Political Insiderism, Rep. Jan Schakowsky or her felonious husband Robert Creamer, Sen. Dick Durbin, the mis-investment of prepaid tuition funds, longtime Cdobs favorite William Brandt.
Here is a little more depth on what has gone on at ShoreBank
A list of the corporate shareholders at ShoreBank 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.
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.”