Yesterday, to much fanfare, the White House blasted that it was Obama's desire to appoint Allan R. Landon, a Hawaiian community banker, to serve on the Board of Governors of the Federal Reserve System. To wit: "President Obama said, “Allan Landon has the proven experience, judgment and deep knowledge of the financial system to serve at the Federal Reserve during this important time for our economy. He brings decades of leadership and expertise from various roles, particularly as a community banker. I’m confident that he will serve our country well.”
Apparently what he also brings as Bloomberg's (formerly of Dow Jones) Dawn Kopecki reminds us, is the usual near-criminal cronyism and corruption that we have all grown to love and expect from every single Fed governor in recent history.
Recall from May 2005, courtesy of the WSJ:
The Seattle Federal Home Loan Bank removed two bank executives from its board and is requiring their lending institutions to repurchase about $73 million in FHLB stock that was improperly sold late last year, just before the dividend was cut and future redemptions were restricted.
The Seattle FHLB, one of 12 regional cooperatives owned by commercial banks, thrifts and credit unions, announced in December that it was cutting its dividend and would restrict future redemptions by its member banks as part of a remedial plan with its regulator, the Federal Housing Finance Board, to shore up its internal controls and profitability. Prior to the announcement, three institutions with executives on Seattle's board redeemed large quantities of stock in the co-op.
Seattle's auditor, PriceWaterhouseCoopers LLP, refused to sign off on the FHLB's fourth-quarter and year-end financial statements until the board fully examined whether the three directors had access to material information that wasn't yet public ahead of the transactions.
The Seattle board said yesterday that Bank of Hawaii Corp. Chief Executive Allan Landon and Washington Federal Savings CEO Roy Whitehead agreed to step down, while their banks agreed to repurchase the stock to settle the matter.
The board noted in a statement that Messrs. Landon and Whitehead didn't intend to improperly benefit from the transactions and have denied any wrongdoing. But the board said its independent-review committee determined that "there was the appearance of impropriety" when the Bank of Hawaii and Washington Federal redeemed $25.4 million and $48 million, respectively, of Seattle FHLB stock in October 2004.
It also said the two CEOs "failed to comply with a rule requiring the disclosure of conflicts of interest by a director by failing to make disclosure to the Seattle Bank board of their institutions' planned redemptions."
* * *
A spokesman for the Bank of Hawaii, based in Honolulu, expects to buy back the $25.4 million of redeemed stock within the next week, a spokesman there said.
In other words, Mr. Landon, who according to Obama "brings decades of leadership and expertise from various roles" really brings experience as an alleged failed embezzler. Alleged because he "stepped down" before the whole fiasco was further investigated by appropriate authorities - instead of merely self-regulated - an escalation that may have ended up with a prison sentence for Landon. Or, as Obama would call it, "proven experience, judgment and deep knowledge of the financial system." Truth is: we will never know.
Instead, nearly a decade later, and an Obama administration that clearly has no clue how to even do a simple Google background check on its appointees to the most important entity in the US, is about to become a Fed board member and serve the "country well", although it is unclear just how: perhaps when he wires some $25 million into an unnamed offshore bank account it will be seen as peanuts compared to the billions other Fed board members, such as Jamie Dimon, have successfully rerouted in the past into their own preferred financial vehicles?
Joking aside, if Landon's nomination by Obama is not rescinded after this humiliating disclosure, perhaps it is time for a much more in-depth inquiry into the basis for the surprisingly close relationship between the born in Hawaii president and this Hawaiian community banker?