Democratic Party senators, Chris Dodd and Kent Conrad were “caught” receiving Sub-Prime “VIP” Loans from lender Countrywide Inc. The Loans were at favorable interest rates. Despite the fact that the lender has testified that both men knew that they were getting a sweetheart deal, Senator Dodd claims he didn’t know he was getting favorable rates.
This revelation came from Robert Feinberg, the official who handled their loans in testimony to congress. According to the Washington Post:Dodd got two Countrywide mortgages in 2003, refinancing his home in Connecticut and another residence in Washington. Conrad’s two Countrywide mortgages in 2004 were for a beach house in Delaware and an eight-unit apartment building in Bismarck in his home state of North Dakota.
Robert Feinberg, who worked in Countrywide’s VIP section, told congressional investigators last month that the two senators were made aware that “who you know is basically how you’re coming in here.”
“You don’t say ‘no’ to the VIP,” Feinberg told Republican investigators for the House Oversight and Government Reform Committee, according to a transcript obtained by The Associated Press.
Despite the Feinberg testimony, the Senate ethics committee didn’t think there was not enough evidence to take any action. It smells like a cover up:
As the old Irish toast goes, may your sins be judged by the Senate ethics committee. Actually that’s not an Irish toast but it must be the fervent hope of every politician who received a “Friend of Angelo” loan from former Countrywide Financial CEO Angelo Mozilo. Late last week the six Senators on the ethics panel dismissed complaints against Senators Kent Conrad and Chris Dodd with a mere admonishment about the appearance of impropriety.
The three Republican and three Democratic Senators say they conducted an exhaustive probe and inspected 18,000 pages of documents. They say they found “no substantial credible evidence as required by Committee rules” that the Senators received mortgage rates or services that weren’t commonly available to the public, and thus did not violate the Senate gift ban.
We’ll have to take their word that the evidence wasn’t “substantial,” because they didn’t release those documents, nor did they encourage Mr. Dodd to release any of his records. Readers will recall that in February Mr. Dodd staged a peek-a-boo release with selected reporters but did not allow anyone to have copies of the documents. If the evidence was so clear-cut, why the months of stonewalling?
The Associated Press may have the answer. AP recently noted that among the peek-a-boo papers were two documents titled, “Loan Policy Analysis.” Reports AP, “The documents had separate columns: one showing points ‘actl chrgd’ Dodd — zero; and a second column showing ‘policy’ was to charge .250 points on one loan and .375 points on the other. Another heading on the documents said ‘reasons for override.’ A notation under that heading identified a Countrywide section that approved the policy change for Dodd.”
How does Mr. Dodd explain that one? He may not have had to. The Senate ethicists don’t seem to have required either Mr. Dodd or Mr. Conrad to provide sworn testimony. In its letters to Messrs. Conrad and Dodd, the committee referred to the “depositions” it collected from Countrywide employees, but it described only “responses” and “explanations” from the Senators. Mr. Dodd never spoke to committee members or staff, and never communicated directly with them.
When committee Senators wrote to Mr. Dodd to get answers to their questions about his VIP loans, they received a response signed by his attorney Marc Elias of Perkins Coie. We remember former Senator Robert Torricelli providing a sworn deposition before he was admonished by the committee in 2002. Perhaps he should have tried the Dodd strategy.
As for Mr. Conrad, his staff won’t say if the Senator answered questions directly or let his lawyers handle it. Either way, he has to be thrilled that his colleagues found no violation of Senate rules, even after he acknowledged last summer that he had received a benefit and promptly donated $10,500 to charity.
We’d also like to know what committee members thought of Robert Feinberg, the former Countrywide loan officer who told us last year that Mr. Dodd received, and knew he was receiving, preferential treatment. The Washington Post reported last month that Mr. Feinberg told the same thing, under oath, to Senate investigators and said that Mr. Conrad also knew he was receiving special treatment. Mr. Feinberg said the same to the minority staff of the House Oversight and Government Reform Committee. Does the committee think he’s lying, or that his testimony simply wasn’t “substantial” enough? Again, we don’t know because the letters released by the ethics committee don’t mention Mr. Feinberg.
Mr. Dodd is running for his sixth term next year and will no doubt claim this as vindication. Voters will have to decide if a Banking Committee Chairman who allowed himself even to be considered a VIP by the nation’s foremost subprime lender deserves it.