Maxine Waters ...

[Woody]

This country is getting far too stimulated. And it turns out the sharks are circling to get the cash ...

WASHINGTON — Top federal regulators say they were taken aback when they learned that a California congresswoman who helped set up a meeting with bankers last year had family financial ties to a bank whose chief executive asked them for up to $50 million in special bailout funds.

Representative Maxine Waters, Democrat of California, requested the September meeting on behalf of executives at OneUnited, one of the nation’s largest black-owned banks. Ms. Waters’s husband, Sidney Williams, had served on the bank’s board until early last year and has owned at least $250,000 of its stock.

Treasury officials said the session with nearly a dozen senior banking regulators was intended to allow minority-owned banks and their trade association to discuss the losses they had incurred from the federal takeover of Fannie Mae and Freddie Mac. But Kevin Cohee, OneUnited’s chief executive, instead seized the opportunity to plead for special assistance for his bank, federal officials said.

“Here you had a tiny community bank that comes in and they are not proposing a broader policy — they were asking for help for themselves,” said Stephen Lineberry, a former Treasury aide who attended the meeting. “I don’t remember that ever happening before.”

Ms. Waters declined on Tuesday to comment on the meeting, or to say whether her husband still owned shares of OneUnited. Her staff released two letters that showed the meeting had been initially called to discuss industry concerns broadly.

Ms. Waters, a member of the House Financial Services Committee, did not disclose her ties to OneUnited to Treasury officials, who said they learned of them only later.

“It is upsetting to me,” said Jeb Mason, the deputy assistant secretary for business affairs at Treasury during the Bush administration, whose office helped set up the meeting. “This is something that was potentially politically explosive and embarrassing to the administration. They should have at least let us know.”

While OneUnited did not get the $50 million it requested, the bank did become among the first minority-owned institutions to receive a cash infusion — $12 million — in December through the Treasury’s bank bailout effort, called the Troubled Asset Relief Program.

The aid surprised some bank analysts because OneUnited was then considered to be in precarious financial shape. In addition, it had been criticized by regulators in 2007 for failing to lend enough money to lower-income residents in Miami. And the Federal Deposit Insurance Corporation admonished the institution in October 2008 for, among other things, providing Mr. Cohee with a Porsche S.U.V., a $6.4 million beachfront compound in Santa Monica, Calif., with views of the Pacific, and a pool and spa.

Critics of OneUnited, which is based in Boston and has branches in Los Angeles and Miami, say the episode shows how special access arranged through a lawmaker with financial ties to the bank had compromised the integrity of the bailout effort.

“The folks who really need help here is the community served by OneUnited — a community that is starving for credit,” said Kenneth H. Thomas, a Florida banking consultant who has filed complaints with federal regulators about OneUnited’s lending practices.

Treasury officials said the TARP allocation had been made on the merits.

Mr. Cohee said of the regulators’ criticisms, “This is where the race issue comes in.”

Ms. Waters and Mr. Cohee have been outspoken advocates for fair treatment of African-Americans and other minorities by the nation’s banks — “silver rights,” Mr. Cohee called it during an interview in his Los Angeles office. Indeed, the bank has won some praise for helping lower-income neighborhoods in Los Angeles.

Their interests first intersected in 2002, when Mr. Cohee was involved in a bidding war for Family Savings, a small, black-owned bank in Ms. Waters’s South Los Angeles district.

As a white-owned Illinois bank initially emerged as the winner, Ms. Waters made clear through the local news media that she opposed any deal in which Family would fall out of African-American hands. She was credited when the bank abruptly changed course and gave Mr. Cohee another chance to submit a winning bid.

“It’s very helpful if you have a community-based transaction to have the real or implied support of Maxine,” said Wayne-Kent A. Bradshaw, the former president of Family Savings, who preferred the initial deal.

The acquisition nearly doubled the size of Mr. Cohee’s bank.

Less than two years later, Mr. Cohee named Mr. Williams, Ms. Waters’s husband, to the bank’s board. A former professional football player and ambassador to the Bahamas, Mr. Williams was a well-paid consultant, often working with Ms. Waters’s allies.