Bank bailout connected to Inouye's office

WASHINGTON, July 1 (UPI) -- A phone call from Sen. Daniel Inouye's office may have influenced the Treasury Department's decision to bail out a bank in Hawaii, The Washington Post said.

The call was made in November on behalf of Central Pacific Financial, Hawaii's fourth largest bank with 15 percent of the state's deposits.

Inouye helped create the bank in 1954 and reported ownership of shares valued between $350,000 and $700,000 in 2007, the Post reported Wednesday.

Along with 1,600 other banks, Central Pacific applied for Troubled Asset Relief Program funds after the program began in October. Only 408 applications for funds were forwarded from the Federal Deposit Insurance Corp. to the Treasury Department and only 267 of those banks were funded.

Prior to approval, the FDIC considered Central Pacific a troubled bank, short on capital. But two weeks after an Inouye staff member left a voice message inquiring about the status of the bank's application at an FDIC office in San Francisco, the bank received $135 million from the government, a Washington Post/ProPublica investigation found.

Inouye said the one phone call "was the entire extent of my staff's contact with regard to Central Pacific Bank, to any outside agency."

The Democratic senator from Hawaii said he was not trying to use his influence to benefit the bank.