Did Eric Cantor Know that Diane’s Bank Got a Federal Bailout?

Here’s a curious tale that you’re not likely to see in the Richmond Times-Dispatch or other Media General outlet.

Diane Cantor, a veteran finance industry official and wife of GOP Congressional wunderkind Eric Cantor, is an executive of a bank that got a $267 million federal bailout even though conservative Cantor has at times publicly opposed the federal bailout program.

According to the investigative journalism Website propublica.org, New York Private Bank and Trust was the beneficiary of a Treasury Department purchase of $267 million work of the bank’s preferred stock to shore it up. The bank is the holding company for Emigrant Bank with 35 branches mostly around New York City. Diane Cantor runs the Virginia branch of Emigrant’s wealth-management division, Virginia Private Bank & Trust, which targets wealthy clients.

Diane Cantor is also a director on the board of Media General, which owns the Times-Dispatch whose editorial staff gushes constantly about how wonderful Cantor, now House Republican Whip, and his wife are. The newspaper does note Mrs. Cantor’s association with the board, but as far as the newspaper’s editorial and news staffs go, “never is heard a discouraging word” about the Cantors. The TD acts as Cantor’s personal PR machine since he is seen as an up-and-coming young Republican leader destined to re-energize the now-hapless GOP leadership left in shambles after eight years of Bush-Cheney-Rove.

Prorepublica.org did talk with Cantor’s office which says that Eric did not know about the bailout of his wife’s bank and did notihng to intercede for it.

If that’s the truth, then Cantor is in a somewhat better position than Rep. Barney Frank, the outspokenly liberal chair of the House Financial Services Committee. Frank, a Democrat, admits he did intercede to get OneUnited Bank of Boston federal bailout money. Frank insists it was a legitimate attempt to help the minority-owned bank, according to The Boston Globe.

Even so, the news puts Cantor in an awkward position. Last summer, when the Bush Administration’s proposal for a $700 billion bailout of troubled financial companies was introduced, Cantor initially pushed for an alternative structure so taxpayers wouldn’t have to pay for it. Cantor suggested using investors on Wall Street to fund the bailout.

He ended up up supporting the program which has ended up giving Diane’s bank taxpayer money. More recently, he voted against releasing the second tranche of the funds.

What’s next is up for grabs. There has been plenty of criticism of the $700 billion bailout program which former Treasury Secretary Henry Paulson introduced in a spare, two-and-a-half page long proposal so vague that it wouldn’t get an Average Joe an auto loan. Paulson initially suggested the bailout be used to buy up toxic loans, but since it has been used for just about everything else, from stock buys of banks, to funding bank acquisitions, to helping auto companies and their finance firms.

Barack Obama’s team is ready to propose major restructurings and major re-regulation of the Bushies’ giveaway that has benefited lots of Wall Street insiders as well as Diane whether Eric knew of it or not.

It isn’t clear if anything was done wrong here. The sad part is that because of Media General’s corporate monopoly over news coverage in much of the state, not many Virginians are likely to learn of what is a legitimate news story at all. And that’s a damned shame.

Peter Galuszka

14 Responses to Did Eric Cantor Know that Diane’s Bank Got a Federal Bailout?

  1. Good work, Peter.

    Look forward to hearing from others who follow this sort of thing.

    EMR finds more and more that under the rocks there are contradictions to what most partisan party members say.

    Groveton calls for more sunshine. He is right on.

    EMR

  2. The Intellectual Redneck

    Do all our Congressmen and Congresswomen own bank stock? Nancy Pelosi wants more TARP money than the 700 billion already wasted

  3. Good post, Peter. It absolutely should be the job of a congressman’s home-town newspaper to hold his/her feet close to the fire on transactions like this. The $700 billion bail-out already stinks to high heaven, just on general principles. The potential for cronyism and the granting of special favors is overwhelming. The public will never find out about the wheeling and dealing unless the newspapers follow this activity closely. Sadly, the blogosphere simply does not have the resources to do it.

  4. There needs to be more disclosures of this type. I’d like to know how much Gerry Connolly has received or will receive in compensation, including gains on company stock, when Congress approves final funding for Dulles Rail that puts a station right in front of SAIC’s building at Tysons. Until he took his seat in Congress, Connolly worked for SAIC and voted as a supervisor to add this additional rail station.

    Another area where we need more disclosure is the Commonwealth Transportation Board and county task forces.

    TMT

  5. No surprise here. Cantor has a history of being a corporate puppet. He took money from Enron and Land America.

  6. Diane Cantor is also on the CenterStage board – and the RTD has yet to inform its readers that city council shielded that project from FOIA requirements and
    took out taxpayer protections THREE MONTHS AGO!

  7. Simon says, “take a big step back.”. Hs wife runs the wealth management group in Virginia for a New York bank. I doubt she even know the banks was getting TARP funds – let alone had any influence on it. Should Eric have known? Yes, his staff should be monitoring these things. Should the local print media have uncovered this story? Yes. Will this be an embarrasment for Eric Cantor as he continues to rail against the bailout? Somewhat. Is it good to have a Republican in Virginia that takes the sentiment of his constituents to Washington? Definitely.

    Eric Cantor seems like a good guy even if he is a bit of a conservative lemming – ready to run off the cliff at the start of every Republican “dogma fest”.

    As for Gerry Connolly – spare me. The only good news from his election is that he’s no longer on the Fairfax County Board of Supervisors. BTW TMT – Is Bulova a shoe-in, in your opinion? Herrity has been running a better campaign than I expected.

  8. Jim Bacon

    Re: Your comment: “The public will never find out about the wheeling and dealing unless the newspapers follow this activity closely. Sadly, the blogosphere simply does not have the resources to do it.”

    Well, the information about Cantor came from a new investigative unit within the blogosphere.

    And while I appreciate your kind words and chance to blog on BR, the fact is that the Bacon’s Rebellion e-zine used to do some work like this. However, since you have given that to the Thomas Jefferson group, we’re getting nothing but PR crap pushing limited government. They would NEVER publish what I posted here.
    You ought to think about that, Jim.

    Peter Galuszka

  9. Groveton — I know both Sharon Bulova and Pat Herrity. Each is qualified to handle the the job, IMO.

    Pat’s downside is that he’s new to the BoS. Sharon’s downside is that she is NOT new to the BoS. She was also too close to Connolly, but may (or may not) be more independent on her own.

    The Fairfax County BoS has help setup today’s budget problems, which is a strong reason for change. It totally mismanaged the Pay-for-Performance program in a way that created a high cost structure that threatens county services, employee jobs and higher taxes, which many county residents cannot afford to pay. The BoS also approved excessive amounts of development beyond the capacity of the system to handle. It also failed to collect adequate contributions from developers on rezoning to pay for needed public facilities. Most of the supervisors preferred campaign contributions instead. Also, the county budget has contained taxpayer subsidies to real estate development in the form of below-cost fees for services. The BoS has also failed to force the school board to clean up its act on administrative costs and funding expensive programs that don’t necessarily provide good results.

    I think one could make a good case to put Herrity in Connolly’s seat to shake up the system, even though Bulova is competent.

    The big unknown in my mind is turnout. The demographics of Fairfax County have changed significantly. It has experienced high net out-migration. But for immigrants and births, Fairfax County would be losing population. The business community is largely dependent on federal taxpayers. The GOP continues the stupidity of using caucuses instead of primaries and, thus, gets poorer quality candidates, IMO. Both Mark Warner and Tim Kaine have been able to bamboozle Fairfax County residents quite easily. They remind me of my kids when they were younger. My daughter would tell her younger brother that she’d give him some shiny coins for his dirty old dollar bill. Warner successfully played my daughter’s role and Kaine tried.

    The strong dislike for the Iraq War made Webb and Obama very popular in Fairfax County. (I do wonder, however, how the voters will react over time as the Obama Administration has announced it will ramp up the war in Afghanistan as it winds down the one in Iraq.)

    I ramble. There are good reasons to expect Bulova to win, but she needs a big turnout. Herrity is running a good campaign and may be able to incent more of his voters and the anti-Connolly ones. He has a reasonable chance of winning.

    If I were to bet, I still give Bulova a slight edge, largely because the the typical Fairfax County voter is not very tuned in to what goes on in the county.

    TMT

  10. Will wonders ever cease?

    The Times-Dispatch did a story this morning on the Cantor issue albeit they buried it on page A10.
    Neither Cantor would comment but the congressman’s spokesman said it was a “freak coincidence.”
    The TD quoted a University of Richmond professor as saying that Cantor should have disclosed the bailout and recused imself from any voting on the federal bailout.
    Somehow, the TD story did not note that Diane Cantor is on Media General’s board.

    Peter Galuszka

  11. As a matter of fact the Richmond Times Disptach and other papers in the chain ran the story about Cantor’s wife’s bank receiving TARP funds. However, the Cantors were unavailable for comment. Imagine that. Eric “I don’t like earmarks” Cantor gave his wife’s bank an earmark. Cantor is a weasel.

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  13. Cantor gets his orders from AIPAC, the Israel Lobby and his wife. Billions for Israel and millions more for his wife's bank while Americans are losing their homes, their jobs and dying in wars that would never have happened if it weren't for rabidly pro-Israel politicians like Cantor.

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