Thursday, June 24, 2010



As I was cutting the lawn this morning, I heard a report on our local CBS news affiliate, Newsradio 78, that the Obama administration is denying charges that it put pressure on several big financial institutions, including Goldman Sachs, Citigroup, JP Morgan, General Electric, and Bank of America, to come to the rescue of ShoreBank, a Chicago based bank that serves primarily minority communities on Chicago’s south side, has long been a favorite of political types in Chicago, and that ran aground on the rocky economy and apparently slipshod lending practices. The rescue, announced in May, still has not taken place due to some, we are told, bureaucratic snafus. As ShoreBank spokesman Brian Berg put it on June 16, “It is not going as quickly as we would like, but we are working through it." But with the likes of Goldman and Citi working earnestly on this project, one thinks that somehow the deal will go down.

Charges that the President engaged, or would engage, in some Chicago style politics in order to save some of his Chicago pals and their bank have been flying around ever since it became apparent that ShoreBank would need help. Such charges became more vociferous when ShoreBank was (apparently) saved even as some other mid-sized Chicago area institutions, including Broadway Bank (the Giannoulias family bank) and Midwest Bank, were effectively shut down with their assets and deposits given to other institutions. The “experts,” mostly on the political right and almost exclusively not from Chicago, tell us that it is obvious that pressure was brought to bear on the aforementioned financial giants to rescue ShoreBank. Those “experts” clearly don’t understand Chicago politics, and thus are directed to my book, The Chairman, A Novel of Big City Politics and, even more saliently, to an earlier post of mine on $68mm of city related pension money’s finding its way to the money management business of Mayor Daley’s nephew, Bob Vanecko and Mayor Daley’s longtime pal, Allison Davis, “WE DON’T WANT NOBODY NOBODY SENT,” 6/12/09.

In that now seminal piece of last summer, I pointed out that I do not doubt the Mayor in the slightest when he says that he never talked to anyone on the pension boards, never pressured anyone on the pension boards, never had contact with anyone on the pension boards concerning directing the business to young Mr. Vanecko. Why? Because the Mayor didn’t have to ask or tell anyone on the pension boards that Bob Vanecko was his nephew and Allison Davis was his pal, and, with that knowledge in hand, it became obvious to everyone on those pension boards, who owe their jobs to political influence, the ultimate source of which sits in an office on the Fifth Floor of City Hall, what they were supposed to do. Simply put, people on the pension boards, and other contract ladling facades around this town, wouldn’t be there if they weren’t sufficiently politically attuned to know who the Mayor’s (or the Speaker’s or the Board President’s or the Finance Committee Chairman’s or the…) relatives and friends are and who thus should get, ahem, every consideration when it comes time to award contracts. That is how things are done in our fair city. Again, see The Chairman, A Novel of Big City Politics, Mark M. Quinn.

Contrary to the fantasies of the right wing corners of the media, Barack Obama is no cigar chomping Chicago pol; the guys that matter would never let that overly ambitious ingénue near the real action. But Mr. Obama knew that he had to play ball with such types (note his closeness with my former state senator, and senate president, Emil Jones, who could have come straight from central casting) if he wanted to have a career in politics. He also is smart enough, probably from his years spent (perhaps figuratively, but who know?) getting coffee for the likes of Mr. Jones, both to not do anything stupid, like directly telling people to do something in exchange for a favor, and to trust that certain people are smart enough to divine his intentions without having to ask.

So I have no doubt that no direct pressure was brought to bear on Goldman, Citi, et. al. to bail out Mr. Obama’s hometown bank, just as no pressure was brought to bear on certain pension boards to invest millions with mayoral nephew Bob Vanecko and Allison Davis. But the money somehow found its way to where it was supposed to go. Funny how that works, eh?

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