With each day Senator Chris Dodd’s hold on the Senate seat he has held for almost 30 years grows more tenuous. As the Chair of the Senate Banking committee he deserves a share of of the blame for the economic mess we are in now, on top of that, are the recent scandals in which he has been involved.
Ten months ago it was disclosed that the Chairman of the Senate Banking Committee Received TWO VIP Loans from Sub-Prime Lender Countrywide Inc. The Loans were at favorable interest rates. Senator Dodd claimed he didn’t know he was receiving a “sweetheart” deal.
In February, we learned of a new “funky” friendship in the life of the Connecticut Senator. At the end of a the Clinton presidency secured a presidential pardon for Edward R. Downe, convicted of tax and securities fraud eight years before. No one mentioned at the time that Downe and Dodd were partners in a real estate deal, or that a different partner of Downe’s William “Bucky” Kessinger, had was involved in another land deal with Dodd. Of course Dodd hadn’t revealed that at the time. I guess he didn’t have to, since the true ownership wasn’t on the deed.
Then there was that little lie about the AIG bonuses, as he first denied and then admitted to the fact that he placed the clause in the stimulus bill allowing the AIG executives to receive bonuses.
Dodd has now been caught in another lie. Despite their denials, Senator Chris Dodd along with another influential Democratic Senator Kent Conrad were told from the start they were getting VIP mortgage discounts from Countrywide Inc one of the nation’s largest lenders. 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.
The next day, Feinberg testified before the Senate Ethics Committee, an indication the panel is actively investigating two of the chamber’s more powerful members:
– Dodd heads the Banking Committee and is a major player in two big areas: solving the housing foreclosure and financial crises and putting together an overhaul of the U.S. health care system. A five-term senator, he is in a tough fight for re-election in 2010, partly because of the controversy over his mortgages.
– Conrad chairs the Budget Committee. He, too, shares an important role in the health care debate, as well as on legislation to curb global warming.
Both senators were VIP borrowers in the program known as “friends of Angelo.” Angelo Mozilo was chief executive of Countrywide, which played a big part in the foreclosure crisis triggered by defaults on subprime loans. The Calabasas, Calif.-based company was bought last July by Bank of America Corp. for about $2.5 billion.
Mozilo has been charged with civil fraud and illegal insider trading by the Securities and Exchange Commission. He denies any wrongdoing.
Asked by a House Oversight investigator if Conrad, the North Dakota senator, “was aware that he was getting preferential treatment?” Feinberg answered: “Yes, he was aware.”
Referring to Dodd, the investigator asked:
“And do you know if during the course of your communications” with the senator or his wife “that you ever had an opportunity to share with them if they were getting special VIP treatment?”
“Yes, yes,” Feinberg replied.
Bryan DeAngelis, Dodd’s spokesman, said Feinberg has repeatedly made allegations of special treatment that were not true.
“As the Dodds have said from the beginning, they did not seek or expect any special rates or terms on their loans and they never received any. They were never offered special or sweetheart deals and if anyone had made such an offer, they would have severed that relationship immediately.”
DeAngelis also repeated Dodd’s statements from last February that an independent report showed the terms received by the senator and his wife were widely available at the time.
…..Countrywide VIPs, Feinberg told the committees, received discounts on rates, fees and points. Dodd received a break when Countrywide counted both his Connecticut and Washington homes as primary owner-occupied residences – a fiction, according to Feinberg. Conrad received a type of commercial loan that he was told Countrywide didn’t offer.
“The simple fact that Angelo Mozilo and other high-ranking executives at Countrywide were personally making sure Mr. Feinberg handled their loans right, is proof in itself that the senators knew they were getting sweetheart deals,” said Feinberg’s principal attorney, Anthony Salerno.
Two internal Countrywide documents in Dodd’s case and one in Conrad’s appear to contradict their statements about what they knew about their VIP loans.
He [Dodd] insisted he didn’t receive special treatment. However, the assertion was at odds with two Countrywide documents entitled “Loan Policy Analysis” that Dodd allowed reporters to review the same day.
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.
Mortgage points, sometimes called loan origination fees, are upfront fees based on a percentage of the loan. Each point is equal to 1 percent of the loan. The higher the points the lower the interest rate.
…..In Conrad’s case, an e-mail from Feinberg to Mozilo indicates Feinberg informed Conrad that Countrywide had a residential loan limit of a four-unit building. Conrad sought to finance an eight-unit apartment building in Bismarck that he had bought from his brothers.
“I did advise him I would check with you first since our maximum is 4 units,” Feinberg said in an April 23, 2004, internal e-mail to Mozilo.
Mozilo responded the same day that Feinberg should speak to another Countrywide executive and “see if he can make an exception due to the fact that the borrower is a senator.”
Feinberg said in his deposition with House Oversight investigators last month that exceptions for the type of loan Conrad received were not allowed for borrowers outside the VIP system.
“If there was a regular customer calling, and of course you say, ‘No, we’re a residential lender. We cannot provide you with that service,'” Feinberg said.
Feinberg also told House investigators that Countrywide counted both of Dodd’s homes as primary residences.
“He was allowed to do both of those as owner-occupied, which is not allowed. You can only have one owner-occupied property. You can’t live in two properties at the same time,” he said.
Normally, Feinberg said, a second home could require more equity and could have a higher mortgage rate.
Once again, our representatives are proving that they believe there are two rules, one for them and the other for the rest of us. Both of these Senators should be given a new home, this one with metal bars.