In October of 1987, Terry McAuliffe and other Democrats formed a politically connected bank. McAuliffe and several other Democratic Party stalwarts founded what was called Federal City Bank, which drew many of its clients from its own political connections, including labor committees and political action committees. While running the Federal City Bank, McAuliffe also served as finance director for Dick Gephardt’s failed presidential campaign in 1988. Federal City Bank, run by McAuliffe, made an unsecured loan to the Gephardt campaign.
The New York Times reported the story on February 13th, 1988. The headline was “Gephardt received two unsecured loans from bank.”