Four House members got Countrywide VIP loans, Rep. Issa says
Four current members of the House of Representatives received special VIP loans from Countrywide Financial Corp., according to the chairman of a congressional committee, raising new questions about the extent of the company’s attempts to win favor with Washington policymakers as it built its subprime mortgage business.
The disclosure came in a letter last week from Rep. Darrell Issa (R-Vista), who chairs the House Oversight and Government Reform Committee, informing leaders of the House Ethics Committee about “possible wrongdoing” by lawmakers. Issa did not name the House members who purportedly received the discounted loans. The information surfaced as part of his committee’s ongoing investigation of the Countrywide VIP program.
“Testimony and documents show that Countrywide used the VIP program to build relationships with government officials and others positioned to advance Countrywide’s business interests,” Issa wrote to the Ethics Committee’s chairman, Jo Bonner (R-Ala.), and top Democrat, Linda T. Sanchez of Lakewood. The VIP loans often had lower interest rates and fees than those available to the public.
A spokesman for the Ethics Committee would not comment on the letter Monday. The committee usually does not talk about specific allegations or referrals until it reaches a finding.
The oversight committee received about 100,000 pages of documents related to the VIP loan program after issuing a subpoena in February to Bank of America Corp., which now owns Countrywide, the former Calabasas lender. The VIP program also was known as “Friends of Angelo,” a reference to former Countrywide Chief Executive Angelo R. Mozilo.
Under Mozilo, Countrywide helped fuel the subprime mortgage boom and cultivated relationships with Washington policymakers. Last year, Mozilo agreed to a $67.5-million settlement of civil fraud and insider-trading allegations by the Securities and Exchange Commission.
Rep. Edolphus Towns (D-N.Y.) publicly has acknowledged receiving two mortgages from Countrywide. Towns spokesman Charles Lewis said the lawmaker was not involved in a VIP program at Countrywide and received no benefits that were not available to everyone else.
Three of the four House members whose names were forwarded to the Ethics Committee were Republicans and one was a Democrat, according to a congressional aide who was not authorized to speak publicly about the investigation and requested anonymity.
Issa spokesman Frederick Hill said he could not release further details about the lawmakers mentioned in the letter because the investigation was continuing.
In 2009, the Senate Ethics Committee cleared Sen. Kent Conrad (D-N.D.) and former Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) of violating rules in receiving VIP mortgages from Countrywide.
The senators said they didn’t think they were getting any special treatment. But the committee said they “should have exercised more vigilance” in their dealings with Countrywide to avoid the appearance of preferential treatment.
The House Oversight Committee has been investigating the Countrywide VIP program since 2008. The committee issued a report last year finding that Countrywide made 173 preferential mortgages over about a decade to employees of housing finance giants Fannie Mae and Freddie Mac, which purchased many of the company’s loans.