ORLANDO, Fla. — The new chairman of the House Financial Services Committee, which is leading an investigation into two of the biggest bank failures in history, said Monday that his political team has returned all donations from a fundraiser with bank executives in signature bank boardroom just days before its collapse.
And the chairman, Rep. Patrick McHenry, RN.C., rejected suggestions that he should recuse himself from the high-profile congressional investigation, saying he could not be swayed by campaign money.
«When people contribute to me, it’s an endorsement of my agenda, not the other way around,» McHenry told reporters during an off-camera briefing on the banking collapse. «In this circumstance, we had not processed the contributions and returned the mall.»
McHenry, joined by another Republican committee chair and spokesman Kevin McCarthy, answered questions about the fundraising the same day he gave a private presentation to fellow Republicans about the banking collapse at a Republican House retreat in Orlando.
After the press conference, McCarthy defended McHenry.
“I think the president was very clear,” McCarthy said. “He doesn’t raise money because these people are influencing him. People provide resources, and there is a limited amount that someone can provide in this process as well, based on his own philosophy and principles.”
bloomberg first reported On Monday, Signature co-founder and chairman Scott Shay held a fundraiser for McHenry at the bank’s New York headquarters on March 2, 10 days before it was shut down by regulators. Bank executives and other donors paid $1,000 to attend the fundraiser, sponsorships cost $2,900 and hosting was $5,800, according to Bloomberg, citing an invitation to the event.
Campaign donations from Silicon Valley and Signature banks have become a political headache for dozens of other lawmakers, both Republicans and Democrats, as Congress and the Biden administration begin launching investigations to get to the bottom of historic bank failures.
McHenry’s Democratic counterpart in financial services, Rep. Maxine Waters of California, said political she was returning a $2,500 donation Silicon Valley Bank gave her in late 2020 when she was chair of the committee, though her office has not responded to questions from NBC News.
Senate Majority Leader Chuck Schumer, DN.Y., gave campaign contributions from former Silicon Valley Bank CEO Greg Becker and the bank’s political action committee to charities, his office told CNBC. And the McCarthy campaign and various PACs have also received tens of thousands of dollars over the years from SVB, according to USA Today.
Silicon Valley Bank CAP donated to more than a dozen legislators in recent election cycles. Since 2015, the PAC has donated $10,000 in four separate contributions to McHenry. Sen. Mark Warner, D-Va., who serves on the Senate Finance and Banking committees, also received $7,500 since 2016 from the SVB PAC and a additional $2,900 of the bank’s then CEO.
Spokespersons for McCarthy, Warner and McHenry did not respond to requests for comment on those donations.
McHenry and Waters said they will will hold their first hearing on March 29 as they launch an investigation into the collapse this month of Silicon Valley Bank and Signature Bank. Among those who will testify will be Martin Gruenberg, Chairman of the Board of Directors of the Federal Deposit Insurance Corporation (FDIC), and Michael Barr, Vice President for Supervision of the Federal Reserve Board of Governors.
After closing the two banks, those federal agencies took several steps, including set up a facility to lend to banks in times of financial stress, to ensure contagion does not spread to other banks across the country.
“So far, we see these two agencies acting in accordance with the law,” McHenry said. “What we don’t know are the key decisions that were made that weekend that put us through a very stressful 12 days since. Do they have better options that they didn’t pursue due to some ideological lens on the regulators and this administration? But we’re going to go after those things.»
Since the bank’s collapse, President Joe Biden has sought to bolster confidence in the US banking system as his administration pursues accountability for those involved. The Justice Department and the Securities and Exchange Commission launched investigations Tuesday into the bank’s failure.
Asked if bank failures should have consequences, McHenry replied that several bank executives have already been fired.
“When the FDIC took over these two banks, the executives were fired, right? The bondholders were eliminated, the investors were eliminated. So that’s done, OK. When it comes to who failed here, this is one reason we have oversight,» McHenry said.
“We have to investigate what happened. We have to see where the point of failure was. Was it management, was it supervision, was it both? Was it a combination of poor regulation? he continued. “All these things, we have to investigate these things.”