Democratic Party propagandists are abuzz at the revelation that the National Republican Congressional Committee has borrowed $8 million from troubled Wachovia Bank as the company is in negotiations to be sold.
  That's intriguing for several of reasons. The loan follows partisan maneuvering as Republican leaders in Congress fought a GOP-led rebellion over whether and how to bail out bad loans at Wachovia and other banks. Did the loan have a role in convincing reluctant right-wing reps to switch their votes and back the bailout? That's worth following.
  But the people who wrote this up at SouthernStudies.org and DailyKos.com aren't too familiar with banking, and they ran up some blind alleys instead. (Addresses posted below for cut & paste if you want to go there.)
  The articles portray Wachovia as a failing bank that's funding the GOP while it's stiffing its own customers. They use Wachovia's freezing of the Common Fund, which manages funds for hundreds of small colleges, as an example.
  But Wachovia's role as stern trustee for an over-extended investment fund during a collapsing securities market doesn't relate to its role as a lender to solvent borrowers. Even under threat of bankruptcy, banks need to keep lending to well-collateralized business clients, homebuyers, credit card users and many others, or they'll die. If the GOP pays its bills, the loan in itself is no smoking gun..
  The articles also miss the partisan complexities in the struggle between Citigroup and Wells Fargo & Co. for control of Wachovia. Briefly, Citigroup (like other Wall Street firms) is run by Democrats who raised piles of money for both Hillary Clinton and Barack Obama (and John Edwards, too.) 
  By contrast, the people who run Wachovia, like most provincial bankers, are Republicans; the articles note that, but they miss the subtlety that Dick Kovacevich, the ex-Citibanker who runs Wells Fargo, also tends Republican (he backed McCain in the primaries), though he's given lesser sums to powerful Democrats like Sens. Chris Dodd (D-Conn.) and Max Baucus (D-Mont.)
   Does the fact that Citi is Democratic while rival suitor Wells trends Republican have anything to do with Wachovia's GOP loan -- or to the fact that Wachovia CEO Robert Steel double-crossed Citi and decided to support Wells as Wachovia's buyer?
   Plus, the authors confuse Federal Deposit Insurance Corp. insurance with taxpayer aid. FDIC is a government agency, but it's funded by banks. When banks have to pony up more insurance, it eventually costs their customers, corporate as well as consumer; but that doesn't make the Citi proposal a taxpayer bailout.
   Bottom line: Wachovia in extremis lending to Republicans is worth another look, but not a rush to judgment. 

Daily Kos propaganda:
http://www.dailykos.com/story/2008/10/9/144138/991/200/625265

Original Southern Studies article:
http://southernstudies.org/facingsouth/2008/10/investigation-how-did-republicans-get-8.asp