WASHINGTON — Rep. Maxine Waters, D-Calif., did not violate House ethics rules when she contacted the Treasury Department in 2008 to set up a meeting on behalf of top executives from a bank her husband owns stock in, a special investigator said Friday.
But the House ethics committee is still debating whether her chief of staff, Mikael Moore, acted improperly when he continued to work behind the scenes on behalf of the same bank, OneUnited, which is based in Boston.
The findings, which still must be acted on by the committee, represent some of the final steps in what has been a three-year investigation into Waters' actions during the financial crisis.
Waters has long argued she did nothing wrong when she made that September 2008 phone call to Henry Paulson, who was the Treasury secretary at the time, to set up the meeting attended by executives from OneUnited, then near financial collapse.
Billy Martin, a former federal prosecutor who was named this year as an ethics committee special investigator for this case, said Friday at an unusual public hearing on the case that Waters believed at the time she made this call that she was acting on behalf of all minority-owned banks, not just OneUnited.
Only after the 2008 meeting did Waters find out that OneUnited executives dominated the event, asking for a special bailout by the Treasury Department, Martin said. If the bank had failed, her husband, Sidney Williams, could have lost an investment then worth about $350,000.
Martin told an ethics committee panel Friday that once Waters learned of OneUnited's request for special treatment, she told Moore to stay out of the matter, the investigators found.
The special panel set up by the ethics committee spent Friday morning examining whether Moore, who is Waters' grandson, continued to intervene on behalf of OneUnited, which ultimately got $12 million in bailout funds from the Treasury Department.