TARP Inspector Launching Probe Into Financially Troubled But Politically Connected Chicago-Based ShoreBank

Fox Business Network’s Charlie Gasparino reports that an investigation has been initiated into the bailout of ShoreBank, a “very politically connected, Chicago based bank.” Wall Street bankers told Gasparino “personally” there was “political pressure put on them to bail out ShoreBank.” The Fed has “put a stop” on the bailout and the future of the bailout is “a big question mark.”

Here are the key highlights from the report, courtesy of FOX Business Network:

On the investigation into the ShoreBank bailout:
“The TARP Inspector General Neil Barofsky will conduct an investigation if political pressure was applied to the big Wall Street firms to bail out the struggling ShoreBank. All the major banks chipped in about 155 million dollars to bail out ShoreBank which is a very politically connected, Chicago based bank.”

On what people on Wall Street are saying about the bailout:
“A lot of people at the banks told me personally there was political pressure put on them to bail out ShoreBank.”

On the future of the ShoreBank bailout:
“In the mean time ShoreBank’s bailout is a question mark. The Feds put a stop on it. The Fed believes it is going to take more than $225 million to bail it out, it’s going to take something like $400 million.  We will know in the next month whether this is going to go forward or not.”

On Wall Street’s view of ShoreBank:
“Many of them believe is a losing bank. This is not a bank that can be solvent anytime soon and without this money it wouldn’t be solvent. This money is coming on top of the TARP payment. From what I understand there is an investigation by the Fed into whether the $225 million is enough.”

On which politicians were supposedly applying pressure on the banks:
“Sheila Bair, the head of the FDIC, was pressuring them to give some money. Eugene Ludwig, the former controller of the currency under Clinton, was another political operative making calls on behalf of ShoreBank to the big Wall Street firms.”

On who initiated the investigation:
“This was called for by congressman Spencer Bachus, and he is also going to press the White House for some more information, calling on president Obama to turn over phone records, anything that would have anything to do with the Wall Street firms.”

On how long the investigation will take:
“Bachus wanted an investigation to end sometime in October. Barofky’s office is saying it’s going to take longer than that.”

On whether people have faith in Barofsky:
“I ask Republicans if they trust Barofsky apparently they believe he is a pretty straight guy and he will get to the bottom of it if there’s anything there.”

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