Inouye Pulled Strings to Get Hawaii Bank Bailout Cash

A Hawaii bank got a federal bailout weeks after Sen. Daniel Inouye’s office called federal officials to check on the bank’s funding application, ProPublica and the Washington Post report. The bailout money was intended to support healthy banks, but the FDIC had decided Central Pacific Financial didn’t merit a recommendation. Inouye helped found the bank, was its first secretary, and owned shares in it.

Other senators have fought for home-state banks, but none have stepped in to help banks in which they held a stake. Inouye said a staffer’s call to the FDIC was just to make sure the regulators had received the bank’s funding application. The FDIC and Treasury said the senator’s call hadn’t affected the decision, and experts said Inouye’s involvement in the matter wouldn’t break Senate rules.

(More TARP stories.)