Anti-TARP Senate Candidate Buying Bank That Took Bailout Money

Eric Hovde

Like many Republicans, Eric Hovde, a hedge fund manager now running for Senate in Wisconsin, spoke out publicly when Congress was considering the Troubled Assets Relief Program (TARP) — the financial sector rescue package passed in the waning days of the Bush administration — but now he’s buying a bank that was saved with funds from the program.

Hovde, running for the seat being vacated by retiring Sen. Herb Kohl (D-WI), slammed the program in numerous media appearances in 2008 and 2009. “Treasury is providing a massive wealth transfer from taxpayers to Goldman Sachs and other parties, and it’s something that absolutely should be investigated,” he told Reuters.

But as it turns out, he could be one of those other parties that benefit from the effects of the program. The AP reports:

Hovde said when he got into the race that it was nearly impossible not to invest in banks that had received bailout money under TARP. U.S. Securities and Exchange Commission records show Hovde’s company invested in at least 33 banks that received $188 billion in TARP money.

On April 9, a community bank in Baltimore that Hovde owns, Bay Bank FSB, merged with Carrollton Bank in a $25 million deal creating the eighth largest bank headquartered in the Baltimore area. Carrollton Bank accepted $9.1 million in TARP funds in February 2009.

A spokesperson noted that Hove did not own the bank when it took TARP money, but Democrats in the state intend to make hay of it, charging that Hovde is being hypocritical.

Taxpayers may actually make a profit off TARP as the companies it saved return to health.