The indictment of two Commerce Bancorp ( CBH) officials in a Philadelphia corruption scandal this week is an extreme -- but not unpredictable -- consequence of the hard-charging bank's penchant for packing its board with political insiders. Investor confidence has been rocked this week by allegations that two executives of Commerce's Pennsylvania subsidiary bank were part of a criminal conspiracy to arrange special loans for a former Philadelphia official who awarded bond underwriting. The stock is down 16% since the indictment became public. The flight from Commerce's shares, which began trading Friday at $54.22, stands in contrast to the muted reaction of investors to similar allegations facing two former J.P. Morgan Chase ( JPM) bankers. Commerce, in a statement issued shortly after the indictment was announced, said "neither it nor any of its subsidiaries or other officers and employees are targets of the investigation." In a written response to questions about both the bank's political connections and an informal investigation by the SEC into its political contributions, a Commerce spokesman said the company is "aware of no inquiry." Even if the Philadelphia criminal investigation leads to no additional charges, some fear it will embolden regulators to take a closer look at Commerce's history of packing its board, and those of its subsidiaries, with political powerbrokers. Critics contend that Commerce Chief Executive Vernon Hill has leveraged those connections to win lucrative municipal financial services agreements for the bank. State and local government luminaries sitting on the boards of Commerce and five banking subsidiaries include former New Jersey Acting Gov. Donald DiFranceso; New Jersey Sports and Exposition Authority Chairman Joseph Buckelew; top Democratic fundraiser George Norcross; Hackensack, N.J., Economic Development Vice Chairman James Napolitano; and high-powered criminal defense lawyer Michael Critchley. Lawyers in Critchley's office have represented some of the Commerce employees who were called to testify before the federal grand jury in the Philadelphia corruption probe.