Tag Archives: conflicts of interest

“We just want to be friends.”

Let us stipulate that when a body’s ethics committee shows itself to be hopelessly confused about ethics, the chances that the body it is supposed to enlighten will be anything other than habitually, shamelessly and irreparable unethical are somewhere between Frosty’s chances of surviving in Hell, and the likelihood of me doing an infomercial for Wen Hair.

Remember the “Friends of Angelo” scandal? This was the so-called  “VIP program” that former Countrywide founder and CEO Angelo Mozilo used, not to be unkind, to bribe lawmakers into assisting Countrywide’s predatory mortgage loan practices, or at least to look the other way. In June 2008  it was revealed that key policy makers, including former Senate Banking Committee Chairman Christopher Dodd  (D-Conn.), and current Senate Budget Committee Chairman Kent Conrad (D-N.D.) received special terms on mortgages from Countrywide.

In 2009,the House Oversight Committee began investigating the program and learned that similar sweetheart loans were extended to almost a dozen lawmakers, executive branch officials, and other employees of Congress, the White House, Fannie Mae, Freddie Mac, and other government agencies. Countrywide also allowed some VIP program participants “free floats,” which meant that if interest rates fell during the time when loans were being processed, the company allowed applicants to take the lower rate at closing, something it does not typically do.

Let’s be clear: these are bribes. No matter whether they fall within or without specific laws or regulations, they are bribes. This is a large corporation providing special benefits to legislators and others in the government that it did not make available to the general public, in order to make “friends” with them. Why would a financial company like Countrywide want policy-makers indebted to it, to “like” it? Use your imagination. This is called creating a conflict of interest and warping independent judgment. We should expect our officials and elected representatives to recognize such transparent corruption, and avoid it. But they didn’t, and don’t.

One reason they don’t is that voters refuse to hold them accountable. Another is this:

From the LA Times:

“The House Ethics Committee has found no rules violations by  lawmakers and staffers who used a VIP loan program from Countrywide Financial Corp. saying the allegations of special treatment fell outside the panel’s jurisdiction. The committee’s leaders said its investigation largely led to the same conclusions as the Senate Ethics Committee, which determined in 2009 that there was “no substantial credible evidence” that Sen. Kent Conrad (D-S.D.) and former Sen. Christopher Dodd (D-Conn.) had broken rules by accepting loans through the special program…”

“The House Ethics Committee statement said that people in the VIP program appeared to be offered ‘quicker, more efficient loan processing and some discounts.’ But the committee said there was evidence showing those discounts “were not the best deals that were available at Countrywide or in the marketplace at large.” Because participation in the program “did not necessarily mean that borrowers received the best financial deal available either from Countrywide or other lenders,” it was not a violation of House rules to participate, according to the Ethics Committee.” Continue reading →