Saturday, August 21, 2010

ShoreBank Fails, Schakowsky Goes Nuts

U.S. Rep. Jan Schakowsky (D-IL) pushed hard, very hard, to save her favorite Chicago bank. All her huffing and puffing and pleading and threatening couldn't save ShoreBank. This weekend, Schakowsky and her minions are crazy mad about this huge and very public failure of Schakowsky's influence. Schakowsky and her supporters are lashing out this weekend like crazy people, going so far as to have a supportive political action committee order the disruption of a campaign event by her Republican opponent Joel Pollak. It's a tactic more suited to the student senate campaign of a petulant 10th grader, but sadly typical of Democrats like Schakowsky. ShoreBank's website today shows the FDIC's notice ( According to the FDIC's Friday, August 20 press release, "This evening and over the weekend, depositors of ShoreBank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual." The Wall Street Journal reports that, "Regulators seized ShoreBank Corp. on Friday and agreed to sell assets to a team led by the community lender's executives and backed by several large U.S. financial firms. The bank closure, which is the 114th of the year in the U.S., caps months of uncertainty for a $2.16 billion Chicago bank that had ties to the Obama administration and deep roots on Chicago's South Side. The new institution will be known as Urban Partnership Bank and led by William Farrow, a former First Chicago Corp. executive who was ShoreBank's president and operating chief at the time of its failure." More at Wall Street Journal... That WSJ article continues with: "The attempts to save ShoreBank were complicated by calls for inquiries into the assistance offered by the nation's largest banks. Republican lawmakers have questioned whether the Obama administration pressured the big banks for help. The White House has said it didn't pressure the lenders. Rep. Darrell Issa of California, the top Republican on the House Oversight and Government Reform Committee, will request a probe by the FDIC of ShoreBank, a spokesman said Friday." Schakowsky was a major player on the side trying to save ShoreBank. During her campaign for re-election in the 9th District of Illinois, her opponent Joel Pollak has often used the ShoreBank to highlight Schakowsky's corruption and thuggery. A May 14 article written by Pollak, for example, "Sachs + Schakowsky + Shorebank = Shakedown" at, addressed the shady manner in which Schakowsky was trying to save ShoreBank: "...Goldman Sachs CEO Lloyd Blankfein has been calling Wall Street friends to cough up $125 million to save ShoreBank, which faces federal closure next week. Rep. Jan Schakowsky suggested in January that Illinois taxpayers foot the bill. That would have been the first state-led bank bailout in U.S history. The idea was abandoned–so it appears the government is shaking down Goldman Sachs instead.... ShoreBank has close connections to the Obama administration, including controversial figures such as former 'green jobs czar' Van Jones. Its executives have contributed in the past to Rep. Schakowsky and other Illinois politicians. ShoreBank did not just make loans in poor communities–there are other local banks that do that without getting into trouble–but also specifically made loans that the recipients had little hope of repaying." More reasons why Schakowsky was so eager to save ShoreBank are listed in a January 19, 2010 press release from Pollak, as posted at Backyard Conservative: "The answer may lie in the history of campaign contributions by ShoreBank executives and employees. Federal Election Commission records reveal that ShoreBank executives and employees gave thousands of dollars to Rep. Schakowsky and Sen. Durbin. They also gave heavily to Barack Obama's presidential campaign. Indeed, Crain's Chicago Business reports that "President Obama and the first lady are former neighbors of ShoreBank executives. Other ShoreBank-related contributions include Democrats across the country and left-wing organizations such as The ShoreBank bailout would seem to be more of the same Blagojevich-style, pay-to-play politics that Illinois has suffered under for too long." Schakowsky is not the only Democrat who is upset by the failure of ShoreBank. Community organizer Barack Obama is probably ticked off as well, as noted by By keeping ShoreBank artificially alive for far longer than it deserved, the assets amortized far more than they would have had it been taken into receivership by a non-conflicted bank, and thus the final cost to taxpayers would have been far less. As it stands, Goldman and 11 other banks are receiving a multimillion dollar gift to conduct a portfolio liquidation run-off of ShoreBank's assets, while merely making sure existing deposits are serviced. At least we now know just how truly angry at Wall Street Obama is. We noted here, back in May, that the failure of ShoreBank would probably "cause Obama to go ballistic on Wall Street." It should be noted that although regulators seized Chicago's ShoreBank on Friday, "Ilwaco-based ShoreBank Pacific was not included in the closure." So reports The Chinook Observer, which reports that ShoreBank has multiple corporate identities. "FDIC will absorb total losses of about $367.7 million in the deal. The bank burned through a bundle of money in the collapse of the real estate bubble." HOWEVER, an August 22 article at Portland Business Journal reported that OneCalifornia would acquire ShoreBank in a stock purchase agreement, announced on Saturday evening, August 21. Terms of the transaction were not disclosed. The FDIC is part of the federal government, which means that taxpayers - you and I - will "absorb" those losses. Sadly, there is no reason to believe that Urban Partnership Bank will be any less tied in to the corrupt Green Mafia than was ShoreBank. It will likely still have the same stink of oligarchical elitism. As noted by Bill Zielinski at, "Although the Government did not directly bail out ShoreBank, after reviewing the manner in which ShoreBank was closed and then resurrected by regulators, it appears that a 'stealth bailout' for the owners of ShoreBank was conducted. Providing direct cash from the TARP to ShoreBank would have been highly visible and controversial. Instead, ShoreBank was recapitalized through loss-share guarantees from the FDIC and a $367.7 million loss taken by the FDIC insurance fund." Joel Pollak, of course, wasted no time in putting out a press release on August 20 about ShoreBank and Schakowsky Connection: "The money for the management buyout comes from the big Wall Street banks whose arms were twisted by the Obama administration, through intermediaries like Rep. Jan Schakowsky (D-IL). Meanwhile, the government and the taxpayers are saddled with the responsibility of dispensing with ShoreBank’s bad assets. We are the victims of an insider deal, done at the highest levels of the administration and the Democratic Party. The ShoreBank bailout-turned-buyout is a corrupt collusion between Washington and Wall Street that will not create jobs or investor confidence in Chicago’s low-income communities. It will sustain the terrible idea that poor communities must depend on patronage to survive." True, but that's exactly how the Democrats like it. RELATED: ShoreBank fails; will be reincarnated as Urban Partnership Bank Chicago Business ShoreBank update: A shutdown…and a quick, smelly reincarnation Michelle Malkin Failure Of Obama's Pet ShoreBank Costs Taxpayers $368 Million... ShoreBank to be seized by feds Marathon Pundit ShoreBank to be Split and Saved? National Legal and Policy Center ShoreBank, praised by Democrats, closed Friday by regulators The Hill Glenn Beck Dissects The ShoreBank Matrix Chicago News Bench Failing ShoreBank, Cap-And-Trade and Jan Schakowsky Chicago News Bench ShoreBank: Too Green To Fail? Central Illinois 9/12 Project