McWherter, Haslam invested in bailout banks

McWherter, Haslam invested in bailout banks

October 13th, 2010 by Andy Sher in Politics State

NASHVILLE - Democratic gubernatorial candidate Mike McWherter has investments in two banks that have received federal bailout funds.

But you won't hear Republican rival Bill Haslam exploiting any continued populist anger about McWherter's investments in Community First Bancshares in Union City, Tenn., or Merchants and Planters Bancshares in Bolivar, Tenn.

Knoxville Mayor Haslam has his own investments in Nashville-based Pinnacle Financial Partners and, like the two McWherter banks, Pinnacle received federal Troubled Asset Relief Program funds intended to unlock frozen credit markets during the 2008 financial panic, according to a U.S. Treasury website.

Both candidates' current and recently held investments are listed on their Statement of Disclosure of Interests filed earlier this year with the state Bureau of Ethics and Campaign Finance. The disclosures reflect 2009 investments of $10,000 or more and income of $1,000 or more.

McWherter, a beer distributor, still serves on the board of Community First Bancshares (First State Bank). He said that, in 2008, the Bush administration went to banks, including Community First, and "they asked us to take some funding and to make sure we put it out in the community - and we have."

"I can guarantee you none of that money went into any bonuses for any management or for any directors," McWherter said.

Last year, Haslam sold his stock in two other banks that received bailout funds. One of them was First Horizon (First Tennessee Bank) where Haslam's brother, James "Jimmy" Haslam III, serves on the board of directors.

McWherter and Haslam are both multimillionaires.

According to a Pew Research Center poll released Oct. 6, 46 percent of respondents said they would be less likely to vote for a candidate who supported the bailout, while only 13 percent would be more likely.

During the three-man GOP gubernatorial primary, a vote in favor of TARP came back to haunt U.S. Rep. Zach Wamp, R-Tenn. But it wasn't Haslam who attacked him but Lt. Gov. Ron Ramsey, R-Blountville.

"It's easy to sit in the grandstand and say, 'You know, I wouldn't have done that,'" Haslam said. "But you had the secretary of the Treasury, the chairman of the Federal Reserve and the head of the Securities and Exchange Commission saying, 'We're in complete meltdown here, which is not only going to take down Wall Street but Main Street, too.'"

Asked whether some voters might be upset at his current or former holdings in institutions receiving TARP funds, Haslam, who holds no positions at any of the banks, said, "that's a great question. If you look at it, most of the financial institutions of our country wound up participating in TARP."

While the Obama administration and previous Bush administration officials have said TARP was a success that prevented an economic meltdown, others, particularly tea party movement members, disagree.

Ben Cunningham, a longtime Nashville anti-tax activist who operates the blog Taxing Tennessee, said, "I think for tea partiers, it would be nice for them (McWherter and Haslam) to make a statement on TARP and indicate that they don't approve of several hundred people in Washington, D.C., sitting up there like masters of the universe, trying to micromanage our lives and claiming that they can do so without ethical challenges."

McWherter said he intends to put all of his assets, including any bank stocks as well as his holdings in Central Distributors and Volunteer Distributing Co., two West Tennessee Anheuser-Busch distributors, in a blind trust.

Haslam has said he will put all of his investments into a blind trust with the exception of Pilot Corp., which is the majority stakeholder of the nation's largest truck stop chain.