Dugan pulled the plug on National City by refusing to allow it to receive Federal funds. According to Ohio political leaders, NCB was the only bank in the top 25 to be refused Federal bail-out money. Although Cleveland Congressmen Kucinich and LaTourette have been trying to find out the particulars of the NCB-PNC deal, they have been frustrated by a lack of transparency in the Treasury Department.
What makes this deal stink is that before becoming Comptroller of the Currency, Mr. Dugan was a lawyer in private practice in Washington, D.C. One of his clients was, wait for it, PNC. Although he points out that NCB was also one of his clients, his relationship with PNC has caught the attention of LaTourette, among others.
Dugan is shocked and angered that anyone would think that he used his influence to help a former client of his, but LaTourette points out that Treasury gave more money to PNC than that bank was supposed to get. This is from the PD article linked to in this entry's title:
LaTourette said the Treasury Department money that went to PNC marked the first time the federal government took an equity stake in a regional bank.
According to LaTourette, about a week before National City was forced to sell itself to PNC, Dugan told National City Chief Executive Peter Raskind that his institution shouldn't expect federal bailout money.
LaTourette also observed that Paulson and Dugan gave PNC more bailout money than it was eligible to receive under the terms of the federal program. He said the bailout law stipulated that the Treasury Department could only give a bank money equivalent to 3 percent of its risk-weighted assets, while PNC got an amount closer to 6 percent.
Representative LaTourette has a great line about NCB:
It survived two wars and the Great Depression, but couldn't survive eight weeks of the bail-out.
If you agree with LaTourette and Kucinich that the NCB-PNC deal is suspicious, then check out this website and see how you can get involved in saving National City jobs.