Republican Seeks Answers On Bailout of Politically-Linked ShoreBank

According to FOX Business Network’s Charles Gasparino, politically connected community lender ShoreBank is being investigated by a top republican lawmaker over a recent bailout sponsored by several leading Wall Street firms.

The ranking Republican on the House Financial Services Committee, Spencer Bachus, said in a statement to President Barack Obama early Wednesday requesting "all records of communication - including emails, phone logs and meeting records- related to the ShoreBank negotiations that exist between the Administration and representatives of ShoreBank, and executives of the banks involved in the bailout."

The troubled lender could see the $140 million from large banks, including Goldman Sachs Group Inc. (NYSE: GS) and other probable federal aid that would prevent the FDIC from taking over ShoreBank in jeopardy.

The bank had been singled out by President Obama with praise for its history of lending in troubled communities. ShoreBank is also located in the president's hometown of Chicago.

Bachus is investigating why Goldman and other large banks would be interested in helping to save the small community firm that would have otherwise failed if not for its political ties due to its troubled business model.

"What communications has the Administration had with Mr. (Goldman CEO Lloyd) Blankfein regarding ShoreBank," Bachus wrote. "What role did Administration officials play in coordinating, supervising, or encouraging Mr. Blankfein's efforts?"

According to Gasparino, Goldman officials have received no pressure from the White House to raise capital to help save ShoreBank from collapse, but rather the interest from the Wall Street mega firm is a part of its program started earlier this year to give money to small businesses.

Goldman is currently under fire from regulatory officials at the Securities and Exchange Commission and Justice Department over the trading of toxic mortgage debt prior to the economic downturn.