Shorebank Bailed Out Because of Connections With Obama-Unproven!

Shorebank Bailed Out Because of Connections With Obama-Unproven!

Summary of eRumor:

This is a forwarded email about Shorebank in Chicago.  The email says that the Illinois financial institution had close ties with President Obama’s Administration and alleges  that this relationship helped to push a private bailout to save Shorebank from bankruptcy.

The Truth:

The Shorebank in Chicago, Illinois was financially troubled during the recession, received a Troubled Assets Relief Program (TARP) bailout and there is now an investigation for possible political pressure “applied to force several major Wall Street firms to bail out the bank before it was liquidated by banking regulators,” according to an August 4, 2010  Fox Business News article.  

The article also said that Neil Barofsky, the Special Inspector General for TARP, had “agreed to earmark $75 million to help ShoreBank survive, has now bowed to pressure from Congressional Republicans and has agreed to investigate charges that key officials in the Obama White House, as well as FDIC chief Sheila Bair, pressured Wall Street firms to donate money to keep ShoreBank alive.”

News of this originally broke in a Fox Business News exclusive back in May 19, 2010

Barack Obama did serve as a board member of an advocacy organization for gun control and environmental issues known as the Joyce Foundation,  according to a 2008 political profile posted on the  Washington Post web site.   Click for profile

On May 21, 2010, Fox News commentator Glenn Beck did a report on the political ties between Shorebank and the Obama administration.   Click here for report.

In an August 6, 2010 article in the Chicago Sun-Times that said Shorebank, known for its history of supporting low-income borrowers,  has “failed to secure a $75 million federal bailout as a follow-up to $145 million it raised in May from Wall Street’s biggest players.”   The Chicago Sun-Times article also said, “The White House has denied direct involvement in the ShoreBank matter, saying the president has left decisions to regulators.”

updated 08/06/10