A Washington ethics watchdog wants former Sen. John E. Sununu to choose between his position on the congressional panel charged with overseeing the government's $700 billion bailout program and his seat on the board of a company with close ties to the bank hired to manage the funds.
"It's a huge conflict of interest, and he can do one or the other, but not both," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. "It's entirely inappropriate and he should resign from one immediately."
Sununu was named last week to the board of ConvergEx Holdings. A brokerage and electronic trading firm for big institutional investors, ConvergEx was formed in 2006 from a unit spun off from Bank of New York Mellon (BK), which still owns about a third of the company. A spokeswoman for the company couldn't be reached for comment, and the bank declined to comment on the situation.
The Treasury Department chose Bank of New York Mellon last October to hold and track its investments under the Troubled Asset Relief Program, or TARP, as its bailout fund is formally known. The bank also received a $3 billion investment from the fund to shore up its finances.
What's more, Bank of New York Mellon was the seventh-largest source of donations to Sununu's 2008 campaign with $48,900, according to the Center for Responsive Politics, a non-partisan campaign watchdog based in Washington, D.C. A Republican, Sununu lost his bid last November for a second term to Democratic former New Hampshire Gov. Jeanne Shaheen.
Sununu denied that serving on ConvergEx's board represented a conflict of interest, the Associated Press reported.
"ConvergEx Group is an independent company," Sununu said in an e-mail, according to the AP. "It is not eligible to apply for or receive funds through any programs established under TARP," he added.
A call to a phone number listed under Sununu's name in Portsmouth, N.H., wasn't answered.
Senate Minority Leader Mitch McConnell (R-Ky.) appointed Sununu in December to the Congressional Oversight Panel monitoring the bank bailout fund. A spokeswoman for McConnell said he had no comment.
"I'm sure the panelists will have a discussion about it, but in terms of determining who's on the panel and who's not, that all really rests with House and Senate leadership," said Shanan Guinn, the spokeswoman for the panel.
Congress created the panel to act as the bailout's sheriff, overseeing the Treasury's use of the fund and making recommendations for regulatory reforms. It is composed of three Democratic appointees, Harvard Law School Professor Elizabeth Warren, New York banking superintendent Richard Neiman, and AFL-CIO attorney Damon Silver, and two Republicans, Sununu and Rep. Jeb Hensarling (R-Texas).
Talking Points Memo, a political blog and news site, first raised questions last week about whether Sununu's appointment to ConvergEx's board created a conflict of interest.
During his six years in the Senate, Sununu served on the banking, commerce and joint economic committees. Previously, he represented the state's First Congressional District for six years.
Sununu's father, John H. Sununu, was New Hampshire's governor for six years and later served as White House chief of staff under President George H.W. Bush.
Ex-pol faces calls to pick between bailout panel and corporate board