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This story begins with the first bailout the Tea Party ever stopped.

In May 2010, I helped the Illinois Tea Party organize a demonstration on LaSalle Street in downtown Chicago outside the offices of Shorebank, which was about to be bailed out by the federal government and Wall Street's biggest banks. The bank was meant to have been closed down already by the FDIC, given its staggering spiral of bad debts, but the day of reckoning had been delayed while its friends in the White House and on Capitol Hill tried to find a way to save it.

Those friends included Rep. Jan Schakowsky (D-IL), whom I challenged in the 2010 election, and Sen. Dick Durbin (D-IL). They tried, unsuccessfully, to convince the State of Illinois to bail out the bank. They tried using their contacts in the White House--the president and first lady had been neighbors to Shorebank executives--to forestall the bank's collapse. Andhrough FDIC chair Sheila Bair, they called the same big banks they were browbeating in Congress--including Goldman Sachs and J.P. Morgan--to bail out their precious Shorebank.

It might have happened. But the Tea Party protest gained some local media attention, and the interest of former Rep. Judy Biggert (R-IL) and Rep. Darrell Issa (R-CA), who demanded answers as to whether, and how, the Obama White House was protecting Shorebank. Republicans asked the FDIC inspector general to investigate, and the Treasury and Federal Reserve began backing away. The bank was shut down and taxpayers took over its bad assets--but its managers were permitted to buy the good ones, reopening as Urban Partnership Bank.Scissors-32x32.png

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A Blast From the past, A Golden Oldie!


ShoreBank: Is There a Rezko Connection?
Joel B. Pollak

21 Jul 2010


For months, we have been told that ShoreBank deserves a bailout because it serves poor communities. We have been assured by ShoreBank’s patrons, such as Rep. Jan Schakowsky (D-IL), that allowing the federal government to take over the bank will put borrowers in those communities at risk.


Bailouts for ShoreBank


Now, as the truth has begun to emerge, it is becoming clear that ShoreBank’s troubles did not begin in poor communities at all.




This is not the first time that property developers have played a key role in a Chicago political scandal.

Property developer Tony Rezko, a fundraiser for both Barack Obama and former governor Rod Blagojevich, is currently in federal prison on corruption-related charges. During his career, he was involved in many condominium projects in the city, including one that Obama helped him build by urging state funding for the project.

The plot thickens. At the ongoing Blagojevich trial, Ali Ata, the former head of the Illinois Finance Authority (IFA), testified last month that Rezko arranged for him to be appointed to the IFA by helping him pay off the governor.

The current chair of the IFA, Bill Brandt, has been one of the most vociferous proponents of a ShoreBank bailout, and may even have suggested a state-level bailout to ShoreBank, rather than the other way around.



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