‘A Walking Conflict of Interest’: Eric Hovde Refuses to Divest From California Bank if Elected

Jun 27, 2024

‘A Walking Conflict of Interest’: Eric Hovde Refuses to Divest From California Bank if Elected

MADISON, Wis. — This morning, breaking news report from Dan Bice of the Milwaukee Journal Sentinel revealed Eric Hovde refuses to give up ownership of Sunwest Bank if he is elected to the Senate. If elected to the Senate, Hovde would have extensive influence over banking-related policy and could influence legislation to benefit his own companies.

Read more here: 

Milwaukee Journal Sentinel: Eric Hovde is not saying if he’ll divest his share of Sunwest Bank if elected to the Senate

By: Daniel Bice

If he defeats incumbent Sen. Tammy Baldwin this fall, Republican Senate candidate Eric Hovde will break ties with the bank he manages and oversees.

Sorta, kinda, maybe.

In email exchanges, Hovde spokesman Ben Voelkel said there’s no reason Hovde should give up his roles as CEO and chairman of the board for Utah-based Sunwest Bank, which has branches in five states, while he’s campaigning for the Senate post. The bank is estimated to have $3.2 billion in assets.

“This is America. Anyone can run for any office they are qualified for,” Voelkel said. “We need more citizen legislators from different backgrounds, as opposed to 40-year career politicians that bring no real world experience to the table.” […]

So he would give up his roles as chairman and CEO. This is consistent with Hovde’s position in 2012, when he lost in the Republican primary for U.S. Senate to former Gov. Tommy Thompson. He said he couldn’t keep operating Sunwest.

“That would be, one, a conflict of interest, and, two, I would not have the time,” Hovde said then. “I don’t have the time to deal with those businesses today. Fortunately, I have very good management teams at most of them.”

But that leaves other big issues out there because he is one of the principal owners of Sunwest.

Does Hovde plan to divest his holdings from Sunwest Bank during the campaign or if elected? Or set up a blind trust, as Baldwin has done?

“He will analyze the options available,” Voelkel said.

Hmm, that’s really unclear.

So what does Hovde say?

“If I if end up being successful, I will completely recuse myself from a management or board position from my bank,” he said after a Milwaukee news conference on Wednesday.

OK, got that. But what about his ownership in the bank?

“I don’t know,” Hovde said. “I will make that decision when that bridge comes.”

Democrats said this could lead to huge conflicts of interest if he would continue to own a large share of Sunwest.

As a U.S. senator, for instance, Hovde could vote for the Federal Deposit Insurance Corp. chair and board members, give his support to potential bank bailouts and have a hand in shaping banking regulatory policy. The FDIC is an independent agency set up by Congress to maintain the stability of the country’s financial institutions.

“California bank owner Eric Hovde is running for Senate to help himself and his bank make millions of dollars, not to fight for working Wisconsinites,” suggested Arik Wolk, rapid response director for the state Democratic Party. “He is a walking conflict of interest who the people of Wisconsin cannot trust him to work for them and only them.”

What is not clear is how much of Sunwest Hovde currently owns, though it should be public soon. He has to file a statement of economic interest in mid-July.

Back in 2012, Hovde listed assets ranging from roughly $58 million to $240 million, with holdings in myriad stocks, banks, real estate, as well as an investment in the Cayman Islands, his financial statement reported. His liabilities in loans, lines of credit and credit cards range from $5.2 million to $25.4 million. […]

In 2012, Hovde said he owned $5 million to $25 million in assets held through a bank holding company, Western Acquisition Partners LLC of Washington, D.C. That firm was the controlling shareholder, along with its predecessor, Western Acquisition LLC, of Sunwest for a number of years.

In 2015, Western Acquisition Partners transferred its interest in Sunwest to an entity called H Bancorp, a holding company controlled by Hovde and his brother Steve Hovde. As of 2018, Eric Hovde reported that he had a significant majority stake — around 61.7% — in H Bancorp.

On the campaign trail, Hovde frequently says he “own(s) a bank” and that the bank is his “main business.” […]

“The only people that would be interested is a small handful,” he said.

But all that would change if he were to win on Election Day.