GOP House Whip's Wife 'Didn't Know' Her Banking Firm Benefited From Bailout

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It is, of course, a mere coincidence that the firm for which the spouse of the House Republican whip works has scarfed up a couple of hundred million bucks in the banking bailout. Really. (I can understand why you might wonder, considering Rep. Cantor's role model seems to be the disgraced Tom DeLay.)

So for now, we'll take them at their word. But just imagine that this happened with the spouse of the House Democratic whip, and picture the heated Republican outrage! The press conference, the cable TV talking heads frothing at the mouth! The decrying of greed, the cries of pained incredulity...

Because the firm didn't actually need the money. They simply restructured their tax setup so they would be eligible. After all, you can never have too much money:

WASHINGTON — A bank that employs the wife of Rep. Eric I. Cantor, R-Va., benefited from the $700 billion Wall Street bailout that Cantor helped steer through Congress last fall.

Diana F. Cantor runs a Virginia-based subsidiary of New York Private Bank and Trust. The New York bank received $267.2 million from the U.S. Treasury’s Troubled Asset Relief Program Jan. 9.

A spokesman for New York Private Bank and Trust told ProPublica, an investigative journalism Web site that first reported the relationship, Diana Cantor was “never aware that the parent bank was seeking or received [bailout] funding.” A spokesman for the New York bank declined to comment for this report.

Diana Cantor, the managing director of the subsidiary, Virginia Private Bank and Trust, did not return a phone call seeking comment Monday. She also serves on Media General’s board of directors.

[Editor's note: Props to Media General for following up on an embarrassing story about their own board member. After all, she's an attorney, a CPA and an investment banker. You might expect her to be better informed about these things!]

Through a spokesman, Eric Cantor declined to comment. Rob Collins, the congressman’s deputy chief of staff, called the government investment in the parent company of his wife’s bank “a freak coincidence” and said the congressman did nothing to facilitate it.

Cantor first learned the bank received the money when his wife emailed him a Jan. 16 article in American Banker, Collins said.

“It’s not like she’s lobbying for the industry,” Collins said. “She has no clue what’s going on up in New York.”

Hundreds of banks, financial institutions and auto companies have received funding from the Treasury program.

The $267.2 million given to New York Private Bank and Trust is almost nine times the median amount received by companies participating in the program, a Media General News Service analysis of Treasury records found.

In the American Banker article, New York Private Bank and Trust chairman and CEO Howard P. Milstein said he changed the bank’s tax structure to make it eligible for the bailout.

The bank was not short on cash, but Milstein told American Banker, “We are in a season when you can’t have too much capital.”

[...] The fact that the government did not disclose the Cantors’ relationship when providing funding to Diana Cantor’s employer underscores an overall lack of transparency with the bailout, critics of the program said.

[...] Rep. Cantor should have disclosed how his wife’s company could benefit from the bailout and recused himself from related votes, said Jeffrey S. Harrison, a professor of management at the University of Richmond’s Robins School of Business.

“Transparency is absolutely vital and that information should have been disclosed much earlier,” said Harrison, who has written about business ethics.

But Harrison said that it was unlikely that Diana Cantor was aware of the company’s request for government funds. Even the board of directors of the parent company would probably “not (be) involved in that level of detail at all,” he said. As director of the subsidiary, Harrison said, Diana Cantor would have been “further removed.”

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