A fundraiser today for U.S. Senate candidate Bob Kerrey in Washington, D.C., was sponsored by 10 people with connections to an insurance company that tried to buy struggling banks as a means of getting bailout money from the federal government a few years ago.
The hosts of Kerrey’s fundraiser have ties to Genworth Financial – an insurance company whose board Kerrey was a member of from 2004 until March, when he stepped down from that and two other corporate boards. One of the other companies paid hundreds of millions in a settlement over charges of unlawful billing practices.
Kerrey earned between $160,000 to $215,000 annually serving as a director for Genworth and a year ago, owned $1 million worth of Genworth stock, according to company documents.
In 2008, Genworth and other insurance companies applied to buy small, struggling banks in order to qualify for money from the feds’ bailout program, the Troubled Asset Relief Program or TARP. The companies simultaneously applied for permission to become federal savings and loan holders and obtain bailout money, according to the Wall Street Journal.
Just a couple months earlier, Kerrey praised the TARP program in a Politico story, saying the “big government intervention in the financial markets” was working.
At the same time, Genworth was lobbying Congress on the bailout program. The company’s chief in-house lobbyist, Roger Levy, is one of the sponsors of Kerrey’s fundraiser today. Other hosts include Steven Alesio, who is on Genworth’s corporate board, and Leon Roday, senior vice president of Genworth. Other hosts are lobbyists who have worked for Genworth.
The Project on Government Oversight – a nonpartisan government watchdog group – was critical of the insurance companies’ bid to buy banks to obtain bailout money, saying they were “trying to jump on the gravy train.” The group said in a letter to Congress that while the move was legal, “These insurance companies, investment banks, and credit agencies seem to be straying from their business models to become traditional banks.”
“We think that these companies’ back-door efforts to access TARP funds is a violation of the spirit, if not the letter, of the Act and does not comport with the real interests of the taxpayer,” the group said.
In the end, Genworth missed a deadline and was unable to qualify for bailout cash, and dropped plans to buy a Minnesota bank.
Asked about the fundraiser, Kerrey’s spokesman, Chris Triebsch, said “Senator Kerrey is pleased to have support from a wide range of individuals and organizations.”
Reported by Deena Winter, email@example.com.
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