In the wake of recent reports that Shorebank’s financial status worsened in the second quarter, some interesting new developments have surfaced.

Yesterday afternoon, Fox Business News reported that Shorebank will now be the target of a federal investigation, to look into whether political pressure was exerted on Wall Street banks to give money to help the troubled Chicago community lending bank reach the monetary threshold needed to allow the bank to qualify for federal TARP funds.

Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program (TARP), has said that he will begin looking into whether or not top-level political operatives (e.g., Eugene Ludwig, former comptroller of the currency under President Bill Clinton) and FDIC chief Sheila Bair were involved in exerting direct pressure to force Wall Street banks such as JP Morgan Chase, Goldman Sachs, and others to give money (which now totals more than $150 million) to the ailing bank.  Interestingly enough, Shorebank has been involved in raising private capital to qualify for TARP funds despite the fact that Shorebank senior vice president Michelle Collins emphatically stated just last year that Shorebank would take “no TARP money.”

Although the Obama administration has officially denied any involvement in helping to prop up Shorebank, the rush by other banks to come to its aid has been nothing short of remarkable.  More than a few eyebrows have been raised in response to the general flurry of activity shown by other, larger banks seeking to involve themselves in helping to rescue Shorebank.

For example, Lloyd Blankfein, Goldman Sach’s chief executive, was personally involved in making phone calls to encourage other Wall Street banks to inject capital into the the failing Shorebank.  This, in a stated effort to allow Goldman Sachs to fulfill its obligations under the 1977 Community Reinvestment Act.  (Interestingly, Ron Grzywinski, one of the founders of Shorebank, was the only banker to testify before Congress in favor of the Community Reinvestment Act.)

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Since its founding, ShoreBank has been a progressive-minded bank focused on community development. However, it soon adopted the progressive commitment to environmentalism after founders Ron Grzywinski and Mary Houghton were approached in 1993 by Ecotrust, an environmentally-conscious firm focusing on debt for nature swaps in rainforest countries as well as environmental banking in the Pacific Northwest. The partnership of the two firms led to the establishment of ShoreTrust (now ShoreBank Enterprise Pacific) which provided financing, marketing and management assistance to small businesses in the Pacific coastal rain forest area. From there, the rest of the ShoreBank family eventually followed in adopting the green agenda.

For the entire story chronicling the founding of the bank and its move towards its environmental commitment, you may read Alka Srivastva’s dissertation for Case Western Reserve University here>>>.

From there, it did not take long for ShoreBank to incorporate environmentalism into its mission and formalize its commitment to the green agenda. In 1999, ShoreBank’s board of directors adopted a new conservation and development policy requiring the bank itself to reduce its waste and also encourage its customers to adopt more sustainable practices. The concept of environmental health then assumed its place alongside the goals of community development and profitability to form the “Triple Bottom Line” slogan that the company champions today. As evidence of its own commitment, ShoreBank has even addressed its own carbon emissions by purchasing offsets for 450 metric tons of C02 to offset emissions through 2010.

ShoreBank’s environmental advocacy is now prevalent throughout its dealings, both  in how it relates to its domestic banking customers, and in its international development objectives.

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