New documents in Waters case, ethics hearing off

The House ethics trial of Rep. Maxine Waters was postponed Friday after investigators discovered an e-mail that could affect charges that she improperly tried to help a bank in which her husband owns stock.

The e-mail, obtained by The Associated Press, is inconclusive on whether Waters, D-Calif., was trying to get favored treatment for OneUnited Bank. It shows that Waters, a senior member of the Financial Services Committee, closely watched the drafting of sections of bank bailout legislation that would have benefited the bank.

Waters has contended that her efforts were aimed at dozens of small and minority-owned institutions rather than OneUnited. The trial was scheduled for Nov. 29, but the House ethics committee postponed it indefinitely.

Waters' husband Sidney Williams is an investor in OneUnited. The committee, in charging Waters with ethical wrongdoing last June, said Williams' investment was worth more than $351,000 on June 20, 2008. It had dwindled to $175,000 by Sept. 30, 2008. If OneUnited had not received federal financial help, the charges said, the investment would have become worthless.

The bank eventually did receive $12 million in federal bailout money in December 2008, some three months after Waters asked Treasury officials to meet with an association of minority-owned banks that included OneUnited. However, Waters and Treasury officials said the congresswoman had nothing to do with the bailout decision.

The e-mail that sent the case back to investigators was written by Waters' chief of staff Mikael Moore on Sept. 28, 2008 to staff members of the Financial Services Committee.

Moore, who also is Waters' grandson, wrote that the congresswoman was "under the explicit impression" that provisions affecting small and minority-owned banks were still in the massive 2008 bill to bail out financial institutions.

"If there is any material or technical changes to the language as last agreed upon, please alert me as soon as possible so that Rep. Waters has an opportunity to weigh in," Moore wrote.

One of the provisions — which became law — was to give consideration in the bailout bill to institutions with less than $1 billion in assets that served low, moderate or underserved communities — and lost capital due to losing investments in mortgage giants Fannie Mae and Freddie Mac.

OneUnited fit that category. It's not clear how many others banks also would have benefited.

Waters has been pressing for a trial and has vigorously protested the charges. She did so again Friday.

"The (ethics) committee's decision to cancel the hearing and put it off indefinitely demonstrates that the committee does not have a strong case and would not be able to prove any violation has occurred," she said in a statement.

Waters faces three charges: violating a rule requiring lawmakers' conduct to reflect creditably on the House; violating the spirit and letter of a rule prohibiting receipt of benefits by exerting improper influence; and violating a government code of conduct that prohibits dispensing or receiving special favors.