George Stephanopoulos Actually Grills Dem Politician on Ethics Violations

STEPHANOPOULOS: But, let's look at the evidence compiled by the House Ethics Committee. They say that you did benefit, that your husband had a $175,000 investment in a bank called One United. And that the bank received $12 million in government bailout money from the TARP. And it goes on to say, "If One United had not received the money, your husband's financial interests would have been worthless. Therefore, you did personally benefit." Your response?

STEPHANOPOULOS: We're going to turn now to a GMA exclusive. Representative Maxine Waters of California speaking out in her first television interview since the bipartisan House Ethics Committee charged her with misusing her office for personal gain. The charges involve her husband's investment in a bank that was granted millions in government bailout money. Specifically, the committee found that Waters chief of staff, who was also her grandson, worked to get that government help for the bank. The trial's set for this fall. And Congresswoman Waters says she's going to fight, not settle. She joins us this Morning from Los Angeles. Thanks for getting up so early, Congresswoman.

MAXINE WATERS: You're welcome. Nice to be with you.

STEPHANOPOULOS: As I said, You said you're going to fight the charges hard. And you summarized your defense very succinctly in a powerpoint presentation last week. We're going to point it up now. It said, "No benefit. No improper action. No failure to disclose. No one influenced. No case." But, let's look at the evidence compiled by the House Ethics Committee. They say that you did benefit, that your husband had a $175,000 investment in a bank called One United. And that the bank received $12 million in government bailout money from the TARP. And it goes on to say, "If One United had not received the money, your husband's financial interests would have been worthless. Therefore, you did personally benefit." Your response?

WATERS: That's not absolutely not true. First thing you'll find is the decisions about who to fund were made by the FDIC and by the Treasury Department. And Representatives from both of those agencies have said publicly nobody influenced them. Nobody called them. Nobody wrote to them. Nobody did anything that interfered with their decision making. One United was vetted properly. They met the criteria. And they received TARP funding. And you have to know, George, that the meeting that is referred to that I set up, was at a time when there was not any TARP program. program at that time. There was no TARP program at the time. So, I could not have influenced anybody about TARP.

STEPHANOPOULOS: Let me stop you there. Because, that is true.

WATERS: Yes.

STEPHANOPOULOS: But, then, after that, and the ethics committee goes through this. Your chief in staff, they say he was actively involved in helping the bank request money from the Treasury Department and crafting legislation, authorizing the Treasury to set up this TARP fund.

WATERS: That is absolutely not true. If you take a look at the allegations, you will see that they cannot identify anything that he actually did. Did he call somebody? Did he write a letter? Did he ask me to do anything? They have not been able to verify what it is he supposedly did.

STEPHANOPOULOS: Well, let me- They did have at least one e-mail that I want to put up. It was from September 19th, 2008.

WATERS: Sure.

STEPHANOPOULOS: From your chief of staff, Mikael Moore, to a staffer for Congressman Frank, who was the chairman of the Financial Services Committee. It says, "OU," which stands for One United, the bank, "is in trouble." That does seem to be a kind of action alerting the chairman of the committee.

WATERS: So, what does that mean? Is that the kind of e-mails that are sent between staff? It's more staff chatter than anything else. It does not identify that he took any action. He responded to any e-mail. And we did not receive, and my husband did not receive, any benefit from any of this. As a matter of fact, it's kind of a complicated case and a little bit hard to understand all of the details of it. But as you know, One United qualified because they were adequately capital and they were CDFI institution. Their capital came from the private market. They received private capital to secure that bank before they got TARP. money. So, that any investment that any of the investors had was secured by the private capital. And not by the TARP. funding.

STEPHANOPOULOS: Well, wouldn't they have failed if the money didn't come through?

WATERS: I beg your pardon?

STEPHANOPOULOS: Wouldn't they have failed if money didn't come through?

WATERS: That has nothing to do with my case. The fact of the matter is, if you're accusing me of influence to get them TARP money, when in fact, there was no TARP money involved when I arranged access for the trade association, the MBA, to meet with the Treasurer, that's not a question that deals with this case at all. Maybe they would have failed, I don't know. But the fact of the matter is, they had private capital. And they would not have failed if they had not gotten any TARP money because they got the money from the private market to make them adequately capitalized.

STEPHANOPOULOS: One of the things the ethics committee points out, you realize you shouldn't be involved in this. I want to show an e-mail from you. It says, "I realize that I, perhaps, should take a distance from that. I should not be involved in that." Yet, after you said that, and I think it was said to the chairman of the committee, you, your chief of staff did ha these various e-mails. Various contacts with these other staffers.

WATERS: No.

STEPHANOPOULOS: And they're saying you should have stopped him from taking any kind of action.

WATERS: No. George, that's misinformation. As a matter of fact, the meeting that I arranged with the Treasury was about the loss of preferred stock investment by the banks in the trade association when we took over and placed Fannie and Freddie in conservativeship. That took place early September. And the conversation that you're referring to, took place in early October, long after that meeting had taken place. And only when United- One United was interested in TARP. That's when I said to Barney Frank, they're your constituents. It's your district. So, you should take a look at this. I was out of there.

STEPHANOPOULOS: We only have a few seconds left. The ethics committee is bipartisan. Five Democrats and five Republicans. If these charges are so groundless, how did this happen to you?

WATERS: Well, as a matter of fact, we have the OCE. That is the initial committee that takes up concerns or criticism or complaints from the public. They can take a telephone call, a newspaper report, anything. It is recently established. It's not very tight. They don't do very good work. Rather sloppy work. And a lot of complaints from members about the OCE. And, of course, when they referred it on to the subcommittee of the standards committee or the ethics committee, the ethics committee basically said-

STEPHANOPOULOS: I'm going to interrupt you. We only have five seconds left. Thank you for your time. It is clear you're going to fight. And thanks for sharing your story with us this morning.