Former Sen. John Sununu, a member of the government watchdog panel that oversees the financial sector rescue fund, is joining the board of managers of a firm affiliated with a bank that has received $3 billion from the fund.
Sununu last week was named to the board of ConvergEx Holdings LLC, the holding company for BNY ConvergEx Group. The Bank of New York Mellon Corp. holds a 33.8 percent stake in BNY Convergex, but it has no control over the company or its board.
The bank was one of nine institutions selected by the Treasury Department last fall to receive infusions of cash through capital purchases financed by the $700 billion Troubled Asset Relief Program.
The bank also serves as Treasury's custodian of the bailout funds, a massive job that includes holding and administering all cash and assets in the program's portfolio.
ConvergEx sells global brokerage and investment technologies and services.
Sununu, 44, lost his re-election bid last year as senator from New Hampshire. A Republican, he was appointed to the five-member Congressional Oversight Panel of the Troubled Asset Relief Program in December by Senate Republican leader Mitch McConnell.
"ConvergEx Group is an independent company," Sununu said in an e-mail Monday. "It is not eligible to apply for or receive funds through any programs established under TARP." He pointed out that the bank "holds a minority position only" with ConvergEx.
A BNY ConvergEx spokeswoman said Sununu has no connection to the bank.
"While ConvergEx is technically an affiliate of the bank because the bank has an investment in us, the bank does not control the board or the company," spokeswoman Elizabeth Anderson said. She said ConvergEx is not eligible to receive TARP money and has no connection to how the bank uses any of its funds.
Anderson would not reveal what Sununu's compensation would be, but said it is "no different from any other independent board member."
Congress created the committee to oversee Treasury's handling of the bailout funds, assess the effect of the spending on the economy and determine the transparency of Treasury's transactions with the banks. The panel has also produced a report that analyzed the need for changes in financial sector regulations.
Sununu and the panel's other Republican, Rep. Jeb Hensarling, R-Texas, offered a separate report cautioning that over-regulation could reduce competition and saddle consumers with higher costs. Still, they called for tighter oversight of financial markets, including a consolidation of financial services regulations, noting that the current structure is fragmented among at least five agencies.
Copyright 2009 AP News
