More Congressmen Involved In Countrywide “Sweetheart” Loans Scandal
Tremendously under-reported this weekend was the story of how some members of Congress have been under investigation for getting “sweetheart” VIP loans from Countrywide Financial — the home mortgage company that led the pack of other financial institutions to the housing bubble last year.
The network that gets credit for doing their job is CBS News, which reported on Friday that the list of “influential” Democrats and Republicans that received VIP loans from Countrywide continues to grow. The latest congressman being investigated is Edolphus Towns, a democrat from New York.
According to CBS News:
That’s significant because Towns, a Democrat, heads the committee investigating the mortgage giant’s practices. And he personally is blocking the effort to subpoena Countrywide documents.
Republicans are also being investigated, but it seems like the biggest names of suspects come from the Democratic party. Senator Chris Dodd and Kent Conrad have been on the spotlight of the ethics probe.
The Senate’s Ethics Committee received a complaint from the watchdog group, Citizens for Responsibility and Ethic in Washington (CREW), to investigate Dodd and Conrad for the “sweetheart” loans they received from Countrywide. But the committee dismissed the complaint. CREW Executive Director was outraged and issued this news release on Friday:
In response to the Senate Ethics Committee’s dismissal of CREW’s complaint against Sens. Chris Dodd (D-CT) and Kent Conrad (D-ND) for participating in a V.I.P. loan program offered by Countrywide Financial, CREW executive director Melanie Sloan stated, “As is its practice, the Senate Ethics Committee has cleared the senators of any wrongdoing despite the fact that the senators participated in a program the committee found ‘offered quicker, more efficient loan processing and some discounts.
Apparently, clearing the senators was insufficient penance for the committee for having the audacity to investigate in the first place. Like a battered woman who explains she brought the beating on herself, the committee faulted itself for failing to ‘provide more guidance to the Senate community about issues surrounding mortgage negotiations.’ Over a year has passed since CREW filed its complaint and the committee became aware of this issue. Now would be a good time for the committee to start proactively providing its promised advice.
Partisan politics may be playing a role here, but Republicans maintain that the investigation is about avoiding another crisis again. Republican Congressman Darrel Issa, told CBS that:
“It’s really about what Countrywide sought to do, how vast it was, what they got for their millions of dollars in discounts and how do we make sure it doesn’t happen again.”
CBS reports that Countrywide “aggressively courted those in position to influence regulations as it made billions by giving out risky loans, then selling them to government-backed Fannie Mae. Billions of dollars worth of those loans defaulted at taxpayer expense.”
For the full CBS article click here.