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House ethics panels to probe Waters, Richardson

The inquiry will focus on whether the Southern California congresswomen violated the law or House rules. Richardson's case involves Washington Mutual; Waters' a bank in which her husband owned stock.

October 30, 2009|Jeff Gottlieb

The House Ethics Committee announced Thursday that it had voted unanimously to establish panels to investigate whether Southern California congresswomen Maxine Waters and Laura Richardson had violated the law or broken House rules.

In its statement, the committee said it was looking into whether Richardson had received a "gift" or "preferential treatment" from Washington Mutual after her Sacramento house was sold at a foreclosure auction, only to have the lender take it back and return the two-story house to her.

It also said it was investigating whether the Long Beach Democrat failed to list real estate, liabilities and income on her financial disclosure forms.

Richardson released a statement Thursday saying that she had been subjected to "premature judgments, speculation and baseless distractions" that would now be addressed fairly.

"Like 4.3 million Americans in the last year who faced financial problems because of a personal crisis like a divorce, death in the family, unexpected job and living changes and an erroneous property sale, all of which I have experienced in the span of slightly over a year, I have worked to resolve a personal financial situation."

A four-person committee will investigate Waters' activities surrounding the National Bankers Assn. and OneUnited Bank, a company in which her husband owned stock and served on its board.

Massachusetts-based OneUnited Bank received $12 million in bailout funds three months after Waters (D-Los Angeles) helped arrange a meeting between the bank and other minority-owned financial institutions and the Treasury Department. Waters is a senior member of the congressional committee overseeing banking

Waters' husband, Sidney Williams, served on the bank board until early last year and held investments in the bank worth at least $350,000, according to the congresswoman's financial disclosure report.

"My longtime advocacy on behalf of women- and minority-owned institutions is well known and appreciated by these institutions, which have been historically denied access to government regulators to address their concerns," the 10-term congresswoman said in a statement.

"I am confident that as the investigation moves forward the panel will discover that there are no facts to support allegations that I have acted improperly," Waters said.

The allegations against Richardson and Waters were referred to the ethics committee by the Office of Congressional Ethics, created last year to answer criticisms that the House was reluctant to investigate its own members.

In its statements Thursday, the Ethics Committee said it had been looking at allegations against both congresswomen.

Richardson bought her house in an upper-middle-class Sacramento neighborhood for $535,000 in early 2007 after she was elected to the Assembly. She already owned two houses. She has defaulted on them a total of six times.

After serving briefly in the Legislature, Richardson was elected to Congress in a special election and moved from Sacramento about two years ago.

The house went into foreclosure in early 2008. Real estate investor James York bought the house in May 2008 for $388,000 and recorded the deed. It wasn't long before Washington Mutual took it back and returned it to Richardson.

York sued; the case was settled with each side agreeing to keep details secret.

JP Morgan Chase, which bought Washington Mutual last year, has said that to discuss the case would violate customer privacy.

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jeff.gottlieb@latimes.com

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