ShoreBank rescue prompts call for congressional probe

Crain's Chicago Business reports:

Two top Republicans on the U.S. House Financial Services Committee, including U.S. Rep. Judy Biggert, R-Hinsdale, wrote a letter to President Barack Obama demanding records pertaining to any administration involvement in the $140-million Wall Street bailout of ShoreBank Corp.

“Some believe that ShoreBank was really saved because of an assumption that high-ranking officials in the Obama administration favored a bailout of this failing institution with deep political ties,” said the May 19 letter by U.S. Rep. Spencer Bachus, R-Ala., and Ms. Biggert. “The administration’s perceived involvement raises very serious questions as to whether the federal government is facilitating the rescue of a politically connected hometown bank when hundreds of others are forced to close.”

Mr. Bachus is the senior Republican on the Financial Services Committee, which oversees banking laws, while Ms. Biggert is the top GOP member on the committee’s subcommittee on oversight and investigations.

Chicago-based ShoreBank was on the brink of failing before a group of the nation’s largest financial players, including Goldman Sachs Group Inc., General Electric Co.’s commercial finance arm, J. P. Morgan Chase & Co. and Bank of America Corp. stepped forward with about $140 million in equity commitments.

No word from Obama side kick, Chicago Mob linked banker Alexi Giannoulias on this one.