Saturday, August 01, 2009

Senators Dodd & Conrad Lied About Mortgage Favors

The Senate Ethics Committee investigation looking into allegedly preferential treatment afforded powerful Senators Dodd (D-CT) and Conrad (D-ND) by mortgage giant Countrywide Financial has sprung a few leaks. And the emerging details do not look good for either senator.
According to The Associated Press:
Despite their denials, influential Democratic Sens. Kent Conrad and Chris Dodd were told from the start they were getting VIP mortgage discounts from one of the nation's largest lenders, the official who handled their loans has told Congress in secret testimony.

Both senators have said that at the time the mortgages were being written they didn't know they were getting unique deals from Countrywide Financial Corp., the company that went on to lose billions of dollars on home loans to credit-strapped borrowers. Dodd still maintains he got no preferential treatment.
Robert Feinberg, who worked in Countrywide's VIP program, contradicted the repeated denials by Dodd and Conrad regarding their knowledge of the program. When asked directly whether the two Senators were aware they were receiving special VIP treatment, Feinberg simply said, "Yes."

The program was known as "Friends of Angelo," named after Countrywide's chief executive at the time, Angelo Martinez, who was recently charged with civil fraud and illegal insider trading. Dodd used two sweetheart mortgage loans in 2003 to refinance residences in Connecticut and Washington, DC, while Conrad took two loans the following year to refinance his beach house in Delaware and an apartment building in North Dakota.

Aside from Feinberg's testimony regarding the senators' knowledge of the program there is the documentary evidence as well.

In Dodd's case two documents entitled "Loan Policy Analysis" clearly prove Countrywide allowed Dodd to obtain the loan without paying "origination fees," when Countrywide's general policy is to collect these fees, also called "mortgage points."

And as far as Conrad is concerned, the North Dakota Senator sought to obtain a residential loan for his eight-unit apartment building when Countrywide's residential loan limit is for buildings with no more than four units. "...See if the [loan executive] can make an exception due to the fact that the borrower is a senator," Martinez instructed Feinberg in an email obtained by The New York Times.

The email string indicates Conrad was award of the four-unit restriction.

Dodd and Conrad went into spin/disinformation mode, with Conrad gong so far as to compare his sweetheart mortgage/bribe to an airline "frequent flyer" program.

Their Democrat pals control the Senate and the House so don't expect too much investigation into this scandal. House Democrats have zero interest in subpoenaing information about the "Friends of Angelo" program, such as the full list of beneficiaries that is sure to include more politicians from both political parties.

The accusations of preferential treatment are particularly damaging for Senator Dodd, who chairs the Banking Committee, which is responsible for regulating the mortgage lending industry including companies such as Countrywide.

Despite the serious investigation into his corrupt relationship with Countrywide Dodd continues to rake in huge amounts of cash from lobbyists. According to The Associated Press: Even as Dodd "boasts about snubbing lobbyists...the embattled Connecticut Democrat is still cashing lobbyist campaign checks and rubbing shoulders with them at fundraisers and party gatherings."

And, of course, the Senate Ethics Committee investigation is taking place while Dodd is embroiled in a separate real estate scandal. The watchdog group Judicial Watch filed a Senate Ethics Complaint against Dodd for undervaluing a property he owns in Ireland on his Senate Financial Disclosure forms.

Judicial Watch's complaint forced Dodd to amend the forms. However, press reports suggest the property is still undervalued. Judicial Watch also alleges in the complaint that Dodd obtained a sweetheart deal for the property in exchange for his assistance in obtaining a presidential pardon for a long-time friend and business associate. The false financial disclosure forms were part of the cover-up.

Despite these scandals, Dodd continues to head the Senate Banking Committee and Conrad is in charge of the Senate Budget Committee. Think about that the next time you hear these committees talk about banking ethics or balanced budgets!

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