Follow-Up: Our investigation into Wachovia's bailout of the GOP

Our in-depth report on Wachovia's curious $8 million bailout loan to the National Republican Congressional Committee -- while the bank is denying credit and loans to thousands of other regular customers -- is starting to make waves.

Facing South got more than 10,500 page views yesterday and the story was a #1 recommended diary for hours at DailyKos. We are now getting calls from major media about the story.

It's a complex story with lots of pieces -- but to recap, the main findings of our investigation were:

* That nearly-failed Wachovia was extending an $8 million bailout loan to the cash-strapped National Republican Congressional Committee to finance last-minute election activities to help GOP House candidates.

* That Wachovia was giving this bailout to the NRCC even as it was denying credit and freezing assets to thousands of small businesses, individuals and institutions including nearly 1,000 colleges who urgently need the money for salaries and other costs.

* What's more, the loan was made while Wachovia was in the middle of a buyout deal backed by U.S. taxpayers. The FDIC had promised to absorb all losses over $42 billion from Wachovia's takeover by Citigroup; their likely buyout by Wells Fargo now was only possible because of the promise of federal backing.

* Wachovia's decision was especially suspect given that the NRCC has a history as a bad client for Wachovia -- the NRCC had just gone through one of the biggest political financial scandals in history, hadn't done an audit since 2003 and didn't pay back their 2006 Wachovia loan until this spring.

* Given all these factors, charges of favoritism are fueled by Wachovia's political leanings: Wachovia's main PAC has given 62% of its contributions to Republicans this year. Wachovia's new President and CEO, Robert Steel, is a former Republican appointee who has given 95% of his nearly $100,000 in political donations to Republicans over the last three election cycles.

Here are some quick updates to the story:

* One item we didn't draw out in the piece: The NRCC was an especially odd choice for a Wachovia loan given that they only have $14 million in the bank, which they plan to spend ASAP. That means their loan for $8 million was more than half their entire cash on hand, and their cash on hand is shrinking fast.

* The financial press gets it : We're not the only ones who think it's a little odd that a nearly-failed bank that's denying credit to most customers would give a loan to the NRCC. CFO.com, a leading online business website, reports on Wachovia's loan to the NRCC in a piece titled "What Funding Freeze? Some Firms Get Theirs."

* The NRCC is still having to pull back on ads: More evidence of their shaky financial position. As Politico reports:

The National Republican Congressional Committee, after reserving advertising time in 26 Congressional districts, has begun to cancel or dramatically scale back some of its ad reservations across the country. Many of the hardest-hit candidates are among the GOP's leading challengers.

Affected races include GOP candidates in Florida, Minnesota, Nevada and New Mexico.