Congress is the modern day Mafia
.
The Mafia never had control of the DOJ, like the Congress
[except maybe the Winter Hill gang.]
Posted on 07/25/2008 7:15:56 AM PDT by ex-Texan
Sweetheart mortgages given by Countrywide Financial, the nation’s biggest mortgage lender, to elected officials and government bureaucrats seem tailor-made for an ethics inquiry by Congress, especially as the country is seeing a rising tide of voter anger in this presidential election year due to the massive $300 bn bailout of the housing industry at taxpayers’ expense.
The mortgages at issue were allegedly given to Congressional members and staffers championing this record bailout, a bailout that now surpasses the taxpayer cost of the S&L crisis in the late ‘80s and early ‘90s.
But Rep. Darrell Issa (R-Calif.) and Rep. Mark Souder (R-Ind.) say Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, is ignoring their demands for an investigation into cheap, VIP mortgages allegedly given by Countrywide Financial to House staff members and elected officials.
Countrywide allegedly gave cheap, sweetheart mortgages to Sen. Kent Conrad (D-ND) and Sen. Christopher Dodd (D-Conn.), chairman of the Senate Banking committee who reportedly saved $75,000 on his inside deals from Countrywide.
At issue are Countrywide’s VIP mortgages, in which borrowers received lower interest rates and point shaves on their mortgages. Countrywide’s controversial VIP mortgages were given under the “Friends of Angelo” program, nicknamed after Countrywide chief executive Angelo Mozilo, a story that first broke in Portfolio Magazine.
Both Senators have denied wrongdoing and both repotedly welcome a Senate ethics inquiry (to date, no Senate ethics hearings on the matter have been announced).
The Wall Street Journal has also reported that James Johnson, a former chief executive of Fannie Mae, resigned recently as an adviser to the presidential campaign of Sen. Barack Obama after it was disclosed that Johnson received sweetheart loans from Countrywide. Johnson’s lawyer has said those loans were made on normal terms. Franklin Raines, a former head of Fannie Mae, also received sweetheart Countrywide loans, the Wall Street Journal reports.
Rep. Waxman’s office did not return calls for comment.
Reps. Issa and Souder wrote to Rep. Waxman that, “given the fact that Congress is actively considering bailing out Fannie Mae, Freddie Mac, Countrywide, and other lenders, it is essential that Congress investigate to determine the extent that public officials and staff have been compromised by improper gifts,” adding, “for all the hearings your committee has held on subjects other than waste, fraud, and abuse in the Federal government, it is an appalling lapse that the Committee is not investigating this matter.”
The House Ethics committee has already held hearings that attempted to link the housing bubble to outsized executive pay packages given to Countrywide’s chief executive Angelo Mozilo, Merrill Lynch’s former chief executive E. Stanley O’Neal and Citigroup’s former head, Charles O. Prince.
In their letter to Rep. Waxman, Representatives Issa and Souder demanded that Waxman use his “influence as chairman to stop any legislation bailing out mortgage lenders until all tainted individuals have recused themselves and the legislation has been examined and declared free of any undue influence.”
The housing bailout bill would provide potentially unlimited taxpayer funds to rescue borrowers who took tens of billions of dollars worth of mortgages from lenders like Countrywide. Bank of America (BAC: 29.38, -1.26, -4.11%), helped shape the legislation via two lobbying documents outlining how to construct the bailout, obtained by Fox Business, after it announced its $2.5 bn purchase of Countrywide last January (see blog “The Bank of America Housing Bailout Bill”).
The housing bill would also provide rescue funding to Fannie Mae (FNM: 10.36, -1.66, -13.81%) and Freddie Mac (FRE: 7.75, -1.06, -12.03%), two publicly traded companies who critics say have gunned their lobbying engines on Capitol Hill in order to lighten regulatory oversight, including any increases in their capital cushions, now at perilously low levels.
The two mortgage finance giants have a total $54 bn in net worth, upon which sits a pyramid of debt, including $1.6 tn in borrowings to run their business. Fannie and Freddie operate a $5.3 tn book of business in which it buys and guarantees mortgages, with another $3.3 tn in hedges sitting off balance sheet, according to Lehman Bros. (LEH: 17.75, -0.77, -4.15%).
So far, any money given to Fannie and Freddie has not been conditioned on receivership, which would include breaking up the companies and cleaning out their richly paid management and boards that concocted these two potential economic sinkholes.
A growing number of economists and analysts belive the two are insolvent, as home foreclosures rise to record levels and borrowers fall underwater on their mortgages. House Majority Leader Harry Reid (D-Nev.) is now blocking a vote on an amendment proposed by South Carolina Republican Jim DeMint to bar the two from lobbying in the future.
In his letter to Rep. Waxman, Representatives Issa and Souder refer to fresh details on Countrywide’s sweetheart loan deals given to government officials via its VIP mortgage program.
Specifically, the two cite an August 2008 article in Conde Nast’s Portfolio Magazine, which reports new allegations that House of Representatives staffers, a California state appeals court judge, and other current and former federal officials received special treatment in their mortgages from Countrywide due to their positions.
Portfolio has reported that former Clinton cabinet members Donna Shalala and Alphonso Jackson, as well as former United Nations Ambassador Richard Holbrooke also received VIP mortgages from Countrywide.
And Portfolio says that VIP Countrywide loans were given to former Countrywide director Henry Cisneros, who served as secretary of Housing and Urban Development in the Clinton administration; former White House staffer Paul Begala, now a commentator on CNN; and Postmaster General John Potter. Countrywide also offered special discounts to Congressional staffers involved in housing issues, the magazine says (http://www.portfolio.com/news-markets/national-news/portfolio/2008/07/16/Countrywide-Deals-Exposed?print=true).
The Portfolio article reported that former Countrywide Financial loan officer Robert Feinberg stated that he personally spoke with Senator Dodd and Senator Conrad about their special mortgage deals. It also noted the existence of e-mail traffic between Mr. Feinberg and former Countrywide CEO Angelo on the subject of VIP loans and notes that Mr. Feinberg is in possession of “stacks of documents about the V.I.P. operation.”
On the subject of Countrywide’s federal lobbying efforts, the Portfolio article provides quotes from retired Countrywide managing director Sidney Lenz, who oversaw government relations for the lender. Lenz reportedly says the company’s lobbyists identified potential customers on Capitol Hill and in federal agencies and directed them to Countrywide’s VIP program.
The company’s lobbyists were “incredibly receptive” to loan requests from officials, Portfolio quotes Lenz as saying, adding, “Countrywide had an incredibly good relationship with Congress. It was not unusual for us to get a call saying, ‘A bill’s being introduced. It’s a little technical, and there are parts we don’t understand. Can you help educate us on this?’”
Similarly, Rep. Jeb Hensarling (R-Texas) has also called for hearings to determine whether members received “preferential treatment” with their mortgages from Countrywide, “while millions of hardworking Americans struggle to repay their mortgage debts and cope with $4 [per] gallon gasoline and soaring foods prices,” he noted in an open letter to Congressional colleagues.
I will let the letter from Representatives Issa and Souder letter to Rep. Waxman speak for itself:
“As members of the House Committee on Oversight and Government Reform, we are troubled by your lack of response to our previous request and would like to know why the Committee is hiding from its duty to investigate this matter. Both documents and witnesses are clearly ready and available for an investigation and we would note that the Committee has investigated other improprieties committed by lobbyists.”
The letter adds: “The Committee’s failure to act when presented with rapidly growing evidence of wrongdoing makes a mockery of Speaker Pelosi’s election promise to improve House Ethics.”
And Angelo Mozillo as already resigned from Countrywide. He may be planning vacations back to his family roots in Sicily right now. 'Buon viaggio!,' Angelo. Have a nice trip. Payoffs work, don't they ___________ ?
Check out my freeper page to learn something of deeper consequence.
*Ping*!
Jerry Doyle’s been all over this company for a month now.
Congress is the modern day Mafia.
Usually the media is all over the hypocracy of the Republicans. Since the Dems promised with their “New Direction, the most open, honest and ethical congress in history”, I guess you must use historical comparisons.
Sorry, that’s all I got! It’s hard to ‘think like a progressive’! Pretzel logic is harder than it looks.
Is there anyone out there who thinks that it was just a coincidence that at the same time that Countrywide was committing fraud and giving subsidized loans to politicians there was no call for Countrywide to be investigated?
Congress, hell!
How about Justice Department and SEC investigations, for starters?
$5 Billion in Unsold Homes May Bring Peril to Fannie Mae Shareholders
All those foreclosed homes, sitting vacant all over America. What will Congress do now _________ ?
Appoint Jimmy Carter to rehab all of them and sell them for pennies to poor people living on welfare. That's a real good solution from Obama's point of view. He has lots of experience rehabbing houses with 'Habitat for Humanity.'
This sort of make work project might even help employ thousands of people . . . It rings of FDR and hard times in the 1930s. Kinda like the Hoover Dam project.
LOL, LOL !
Unfortunately, hearings or not, I think this will just go away.
Can we throw them all out of office at once and start over!!!
The Mafia never had control of the DOJ, like the Congress
[except maybe the Winter Hill gang.]
Since “the government” is going to bail out yet another spoiled wimpy group of free loaders, I know that a greater percentage of foreclosures are happening because they want to join the party and receive something.
What chumps my husband and I must seem. We sacrificed for four years staying on a tight budget to pay off our home mortgage and stock options. But, I tell you what, we feel blessed to have done so even though we have not been able to reap any of the government hand outs in these areas. We paid for many people’s stimulus checks (we didn’t get a dime) through my husband putting in 50 hour weeks. At the same time I know folks missing their mortgage payments and going to Disneyland because it must be their birthright!
I am disgusted with President Bush, McCain and most levels of government who are wasting and growing our hard earned taxes.
Alphonso Jackson was a Bush appointee. When Clinton was in office Jackson was screwing up the Dallas Housing Authority.
The rest of the scum bags are Democrats.
Essentially, 'we the people' have been forgotten. Our Constitution has been shredded. The men who tore it up are not be qualified to shine our founding fathers' shoes.
“The men who tore it up are not be qualified to shine our founding fathers’ shoes.”
>>>>>>>>>..............
yet we have so many who will vote for these mafia dons over and over..the congress must be all voted out..corruption is now resulting in the loss of freedom
I can't stand him and he isn't even my senator. I'm considering moving to Connecticut, just so I could vote against him.
We as a nation are collectively guilty, and, sadly deserve our elected leaders.
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Uh, Uhh, Filling out their Sweetheart Loan Applications?
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