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Countrywide Gave Four Members Of Congress Discounted Loans, Investigators Allege

Countrywide Discounted Loans

LARRY MARGASAK   12/19/11 05:13 PM ET   AP

WASHINGTON — Four House lawmakers received VIP discounted loans from the former Countrywide Financial Corp., the lender whose subprime mortgages was largely responsible for the nation's foreclosure crisis, according to congressional investigators.

Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, declined to name the four but has told the House Ethics Committee that it should investigate the lawmakers.

Congressional sources said three of the four are Republicans. The sources spoke on condition of anonymity, because they were not authorized to publicly discuss the investigation.

In 2009, Democratic Rep. Edolphus Towns of New York was identified in the media as having two loans that went through the Countrywide VIP program. On Monday, Towns insisted he was not involved in a VIP program of the lender and did not receive benefits that weren't available to every customer of the lender.

Issa, in a letter dated Friday and released Monday, said there could be additional lawmakers who received discounted loans.

The most favored customers of Countrywide were known as "Friends of Angelo," who were given discounts in a VIP section under control of the company's CEO Angelo Mozilo. However, Issa said his investigators discovered that other sections of Countrywide also processed VIP loans to public officials and others in position to help the company.

Countrywide was taken over by Bank of America, which has given Issa's committee 100,000 documents in response to subpoenas.

Issa's letter to ethics Chairman Jo Bonner of Alabama and ranking Democrat Linda Sanchez of California said: "Testimony and documents show that Countrywide used the VIP program to build relationships with government officials and others positioned to advance Countrywide's business interests.

"Between January 1996 and June 2008, Countrywide's VIP unit gave discounted loans to employees of the federal government, including the U.S. Congress."

He added, "My staff is also aware of the possibility that loans with VIP benefits were conferred to other members and serviced by a separate loan processing branch."

The ethics committee determines whether House members violated standards of conduct, including a virtual ban on gifts. The committee also can refer cases to the Justice Department for a criminal investigation.

It was previously revealed that Sen. Kent Conrad, D-N.D. and Chris Dodd, D-Conn., while still a senator, had received VIP loans from Countrywide. Both said they did not know they were getting unique deals and Dodd maintained he received no preferential treatment.

Others named as recipients of the VIP program were James Johnson, former head of Fannie Mae who later stepped down as an adviser to Barack Obama's first presidential campaign, and Franklin Raines, who also headed Fannie Mae. Still other "friends" included retired athletes, a judge, a congressional aide and a newspaper executive.

The Senate's ethics committee looked at the Dodd and Conrad cases and cleared them of wrongdoing, but warned that they should have exercised better judgment.

The committee said the senators should have questioned why they were in the VIP program, because it should have raised red flags.

The Securities and Exchange Commission in October 2010 said that Mozilo would pay a $22.5 million penalty to settle charges that he and two other former Countrywide executives misled investors as the subprime mortgage crisis began. Mozilo also was banned from ever again serving as an officer or director of a publicly traded company.

He also agreed to pay another $45 million to settle other violations for a total settlement of $67.5 million that was to be returned to investors who were harmed.

 
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12:58 AM on 12/22/2011
Hell, I am not surprised by any of these relevalations (not sure of the spelling there). Its time to throw the bumbs out...both Repbulicans and Democrats!
11:59 PM on 12/21/2011
I want names. Let the chips fall where they may.
09:39 PM on 12/21/2011
SURPRISE SURPRISE WHILE SO MANY SUFFER THERE ARE ALWAYS A FEW WHO PROSPER
08:25 PM on 12/21/2011
This is nothing compared to Gingrich. He got a $1.5 e6 plus salary from one of the most notorious sub-prime lenders.Fanny/Freddie
04:31 PM on 12/21/2011
Larry is there anything new in this article ??????
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HUFFPOST SUPER USER
bighat
Truth as I see it
03:53 PM on 12/21/2011
How would someone like Chris Dodd even know if they got preferential treatment. He does not even know that restaurants charge for meals as he has never picked up the check
02:09 PM on 12/21/2011
Term limits.............at least that way they won't be able to rob America blind as a full-time, long-term career. And ALL your bennies end the day you leave. Think anybody would even run if it weren't such a gravy train?
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2008FedUP
America has been colorized and it's looks GOOD!!
05:53 PM on 12/21/2011
Totally agree, if your time is up go and get another job along side "real Ameeeericans"
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Trollstein
Once you go Schwartz, you never go back baby
01:51 PM on 12/21/2011
Only four? The reason must be that the rest of the congress has enough personal resources to lend the banks money.
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Eroshan
"K" street needs to be closed.
01:26 PM on 12/21/2011
I believe we need to re-institute the honored process of tar and feathering and running the bastages out of town on a rail.
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Dee Sexton
01:07 PM on 12/21/2011
This will not stay secret long. There colleague will rat on them. I HOPE
HUFFPOST SUPER USER
Dee Sexton
01:03 PM on 12/21/2011
The congress is the 99 % . 99 % of them are corrupt.
HUFFPOST SUPER USER
Dee Sexton
12:57 PM on 12/21/2011
Corruption is on a rampage on Capitol Hill. Is this shocking ? No way! It's SOP for them
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HUFFPOST SUPER USER
jaborine
No tea for me
12:37 PM on 12/21/2011
They are proposing returning money to investors, but what about the people denied loans by Countrywide, the people mislead with wrong information about qualifying, and the people who
received loans at a higher interest rate than the VIPs when all things were equal?

Again, what about the little guys who suffered as a result of Countrywide's decision making
in favor of politicians?
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Enemas of the State
A real Pain in the ____..!!
12:19 PM on 12/21/2011
Why are the 4 names not announced , just like every other person, Who may be investigated for any said crime...Is spread all over the Media..Holding Office should not be enough to save you from arrest, or from having your name put-out there for ridicule..!!
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MmeFlutterbye
Mmeflutterbye
01:51 PM on 12/21/2011
I notice that only the Democrats involved were named. Par for Issa. Keep those Republicans innocent at all costs. Whether Dem, or Repub, I don't understand why they are responsible for the deal Countrywide made with them. ... unless, of course, there was a quid pro quo. In that case all pols involved knew about the sweetheart deal. They should be punished accordingly.
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11:49 AM on 12/21/2011
Congress is a representation of us. Elected by us, to serve protect and defend.
They are public servants. [Hmmmm] They are leaders. [Hmmmm] And if you
ask them, they promote the public good. [Hmmmm] Sunlight laws anyone? Transparency?
Open books on congresses personal wealth growth? Their families wealth growth?
Why do some of them throw millions of their personal income into an election to earn
a relatively minor paycheck. [Hmmmm]
Lets regulate Congress, fairly openly, honestly. Then Congress will better regulate Banks
Healthcare, Financing, Wages, etc. etc. This is all within the power of us, The Electors.
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Luv2Purple
Entrepreneur - Lover of life, dreamer of dreams!
11:59 AM on 12/21/2011
just elect Christian conservative rethugliclowns and all will be right with the world....won't it???
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12:31 PM on 12/21/2011
Elected office seems to attract the elite practicioneers of self aggrandizeers.
From their elected office they fuel self centered pomp, and worth. Then spew
vast amounts of hot air explaining their importance to us.
. .GREED HAS NO PATRIOTS... NOR BORDERS..
It's easier for me to understand how they fool themselves, than it is for me
to understand how they fool the American public.
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MmeFlutterbye
Mmeflutterbye
01:56 PM on 12/21/2011
"Lets regulate Congress, fairly openly, honestly. Then Congress will better regulate Banks
Healthcare­, Financing, Wages, etc. etc. This is all within the power of us, The Electors. "

Trouble is that any legislation against corruption will no doubt be decided (interpreted) by the SCOTUS and that would be great ... But ... there are the CONSERVATIVE SCOTUS FIVE who will vote for whatever the Conservatives want ... and that will be protection so that more corruption can be instituted.