A HOME STATE PAPER ON Chris Dodd’s “Inept Handling of Conflcts.”
For the first time in his Senate career, Christopher J. Dodd, the senior Democratic senator from Connecticut, is politically vulnerable. In part, that’s because both the Senate Ethics Committee and the Public Integrity unit of the Justice Department are looking into mortgage loans he got from Countrywide Financial.
The Justice Department investigation is broader. It seeks details not just of Dodd’s loans but also of other loans made under Countrywide’s VIP program meant to seek better loan terms for FOAs (Friends Of Angelo, a reference to then-Countrywide company Chairman Angelo Mozillo). NBC news has reported that the program made mortgage loans to a variety of politically powerful Washington insiders over a number of years.
The always voluble Sen. Dodd is uncharacteristically silent about his failure to call attention to what was the increasingly reckless lending practices of the banking industry.
A key figure in this scandal, Countrywide Financial, saw its low-income loan portfolio grow from $1 billion in 1992 to $80 billion in 1999, and to $600 billion in 2003. This was a result of a revision of lending regulations made in 1995 that effectively eliminated traditional income and down-payment requirements to encourage wider home ownership, particularly among minorities. In effect, it was an affirmative action program for the loan business.
The senator did pay attention to Countrywide Financial and to Fannie Mae and Freddie Mac since he received more than $700,000 in loans at below-market rates from Countrywide. Fannie and Freddie also provided $165,400 in political contributions to Sen. Dodd, making him the No. 1 recipient of such funds, ahead of Barack Obama at No. 2 with $126,349.
Ouch. Plus, an Open Letter to Chris Dodd:
It was so amusing when congressmen — many with good haircuts by the way — pressed the Big Three honchos about the way they travel, the hotels they stay in and the places where they eat.
Those are questions that need to be asked of guys who hire folks who carry lunchbuckets to work rather than wear Guccis.
Speaking of expensive clothes, I’m noticed that you were in such a hurry to give $700 billion to the Wall Street guys that you didn’t ask any of them to step down.
But really, no one would expect you to make that demand of your friends. I mean, you are a “Friend of Angelo,” which means you got low-interest, no-points loans for a $500,000 refinancing on your Washington, D.C., townhouse and a $250,000 refinancing on your Connecticut home.
The cheap loans came from Countrywide, and some sticklers think that was a violation of federal law. But you said you got the good deals because you were a good client and not because you are chairman of the Senate Banking Committee.
To be honest, even the New York Times didn’t buy that.