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by Pearl Hahn

It turns out Central Pacific Financial, which was not originally slated to receive any bailout funds, is now standing to receive $135 million from the Treasury.

Senator Inouye reported ownership of shares worth $350,000 to $700,000 at the end of 2007.

According to the Washington Post article linked above, Central Pacific was an unlikely recipient due to the high total number of applications submitted and its poor condition (the FDIC- Federal Deposit Insurance Corporation- had already decided against a favorable recommendation for it to receive funds). Furthermore, the FDIC earlier this year had asked Central Pacific to raise capital and improve its management practices amid concerns.

Yet, Central Pacific will be getting what it asked for after all. The press has highlighted the fact that there seemed to be some sort of turnaround after a phone call was placed by Inouye’s staff to FDIC, shortly after which Central Pacific’s application was approved. It is uncertain whether approval hinged upon the phone call.

“Even if Inouye were directly involved, it would not violate the rules the Senate sets for itself,” experts said.