Panel’s OK of Loan Executive Hits a Snag

For a few hours Tuesday, it looked like Ameriquest Chairman Roland E. Arnall had finally cleared the Senate Foreign Relations Committee in his bid to become U.S. ambassador to the Netherlands.

But by nightfall in the Capitol, after a series of maneuvers, it appeared that the nomination once again was in limbo.

The committee’s Republican chairman said Arnall’s nomination was recommended to the full Senate on an 8-2 vote. But Sen. Paul S. Sarbanes (D-Md.) protested that the Democrats’ absentee votes had been unfairly disallowed. An aide later said the Senate parliamentarian concurred in that opinion.

“If they [Republicans] try to bring it up on the floor it will be ruled out of order,” said Jesse Jacobs, a Sarbanes spokesman.

The unusual series of events began when the Senate Foreign Relations Committee split 9 to 9 on a vote to recommend Arnall for the ambassadorship.

That vote followed the committee’s third public discussion of Arnall’s fitness for the post. Democrats contend that no action should be taken until Arnall’s company, Ameriquest Capital Corp., reaches a settlement with regulators from 30 states over complaints of overcharges, hidden fees and puffed-up appraisals in its mortgage lending business.

Committee Chairman Richard G. Lugar (R-Ind.) tried to break the logjam over Arnall, a major donor to President Bush who has also given generously to Democrats over the years.

“This is a matter of judgment of the members,” Lugar said. “It’s not clear how the settlement of this case changes the nominee’s fitness for this post.”

But Sen. Chuck Hagel (R-Neb.) broke with his own party members to side with the Democrats, creating the apparent standoff.

“I do think it’s important who represents this country abroad,” Hagel said. “I do think we should send people who are not under a cloud of investigation. Mr. Arnall -- fairly or unfairly -- finds himself in that position.”

“I need more answers before I can move forward,” Hagel added.

Soon after, Lugar tried to do just that.

Under Senate rules, members routinely cast votes for absent colleagues who have given their proxy. The committee has 10 Republicans and eight Democrats. But with Hagel joining Arnall’s Democratic opponents, the count including proxy votes came out to a dramatic 9-9 tie.

Scrambling to stave off defeat, Lugar then announced that the official vote would be limited to those who were present -- resulting in an 8-2 vote in favor of confirmation.

Sarbanes protested, citing the Senate rule book. But Lugar quickly adjourned the meeting.

Late Tuesday, however, Senate parliamentarian Alan Frumin advised Democrats that the 9-9 vote was the valid count, according to Sarbanes’ staff. Lugar could not be reached for comment.

Based in Orange, Ameriquest is the nation’s No. 1 mortgage lender in the so-called sub-prime market for borrowers who cannot qualify for lower-cost prime loans. Consumer groups and attorneys have complained that the company engages in deceptive practices that result in unexpected costs for customers.

Ameriquest has set aside $325 million to cover the cost of a settlement with the 30 states, but a final agreement has not been reached. In an appearance before the committee last month, Arnall contended that other Ameriquest executives were fully capable of concluding settlement talks without his help.

Sarbanes argued Tuesday that the committee had a precedent of holding off nominees who have unresolved legal problems, citing among others George Argyros, whose confirmation as ambassador to Spain was slowed by an investigation into a company he owned.

Lugar, however, expressed concern that opponents of a nominee could use lawsuits as a way “to short-circuit our committee” if such legal issues always led to a delay in consideration.