You’d think that any bank who requested TARP money would have gotten it, right?  They were just handing that stuff out like Halloween candy, and not being a bank wasn’t even a hurdle – you could just call Ben and say “Hay, make me a bank plz” and as if by magic, then all the free money you wanted was yours.  As it happens, it wasn’t quite so easy.  Some banks were actually turned away.  Shocking!  One of those banks turned around and got money anyway, after one of its founders (who is now a Senator, whoops) made some calls.

Way back in the day, now-Senator Daniel Inouye returned from WWII and, with some of his fellow Japanese-American veterans, went and formed a bank to serve the Japanese community in Hawaii.  The bank was named Central Pacific Financial due to a complete glut of creativity in the whole group.  Inouye served as the bank’s first secretary, and over the years he has invested around two-thirds of his assets in the bank he helped found.  Nothing wrong there, of course.  But wait!

The bank, Central Pacific Financial, was an unlikely candidate for a program designed by the Treasury Department to bolster healthy banks. The firm’s losses were depleting its capital reserves. Its primary regulator, the Federal Deposit Insurance Corp., already had decided that it didn’t meet the criteria for receiving a favorable recommendation and had forwarded the application to a council that reviewed marginal cases, according to agency documents.

By “losses” the original article refers to the number of loans the bank had made to Californians for their wacky mortgages that blew up in their faces like an outtake from Mr. Wizard and caused the bank to lose more money in one quarter than it had made the three previous years combined.  So not what you might call a “healthy” bank, even by 2008′s lowered standards.  But don’t think that stopped them.

So fast forward a few weeks, CPF hasn’t heard yay or nay on whether they made it past the first round of auditions to perform in front of Simon, Paula and Randy (with over 1600 “healthy” banks applying for this program, the odds for approval  were slightly better than admission to Stanford) and they wanna know what’s up, even though they really shouldn’t have applied in the first place.

Central Pacific’s situation was even bleaker because it was in trouble with the FDIC. Regulators had raised concerns about the bank earlier in the year. The bank would soon sign an agreement with its state regulator and the FDIC requiring it to raise an additional $40 million in capital and to improve its management practices.

Enter Sen. Inouye’s office, who made a call that sounded innocent enough but that you just know had that, “This is a nice business you got here, be a real shame if something was to happen to it,” note of malice to it.

Inouye said in a statement that the staffer, Van Luong, “simply left a voicemail message seeking to clarify whether Central Pacific Bank’s application for TARP funds had actually been received by the FDIC.”

And then a couple of weeks later, *BOOM*, surprise approval and Central Pacific gets a giant Publisher’s Clearing House-sized check for $135m.  I’m not sayin’, I’m just sayin’.

It’s important to note that even if Inouye directed his staffer to make the call (which he denies) and that even if the call influenced the FDIC and then Treasury (which they deny), he didn’t actually break any rules.  What he did do, if anything, was no more and no less than exactly what seemingly everyone said someone in Congress was going to do: use their influence to steer failout money towards an institution that would directly or indirectly benefit them.  And really, isn’t that what you run for office to do in the first place? So here’s to you, Senator Inouye: you’re a real American hero twice now.