Calls for New Ethics Investigation Grow as Public Watchdog Uncovers Conflict of Interest
October 26th, 2010, Fairfax, VA—Americans for Limited Government (ALG) President Bill Wilson today urged the Senate Ethics Committee to reexamine sweetheart loans given to Senators Chris Dodd and Kent Conrad by Countrywide in light of three Countrywide loans held by the committee’s chair, Senator Barbara Boxer.
“Senator Boxer, who had Countrywide loans of her own, never should have headed the Dodd and Conrad investigations into their own Countrywide dealings. This is one of the most blatant conflicts of interest in Senate history, and throws the Ethics Committee’s investigations of Dodd and Conrad completely into question,” Wilson declared.
“Senator Boxer’s loans even came during the same period as Dodd and Conrad’s loans, and yet she did not recuse herself,” Wilson explained.
Documents have recently surfaced from the Foundation for Ethics in Public Service, as reported by the Daily Caller, showing Boxer had refinanced mortgages with Countrywide in Marin and Alameda Counties in California from 2000 through 2004, and in Washington, D.C. from 2001 to 2007. The Marin County refi was paid off in 2006, and the Alameda County refi was paid off in 2005 via a Credit Suisse refi. Dodd refinanced twice with Countrywide in 2003, and Conrad received his special deal in 2004.
Boxer spokesman Zachary Coile denied any wrongdoing: “Senator Boxer disclosed more information than she was asked to disclose — even though Senate rules do not require any disclosure of a lawmaker’s mortgages.” Wilson said the issue “goes beyond disclosure.”
Wilson responded, “Boxer still doesn’t get it. This is pretty basic stuff. You don’t head an investigation into a company that you’re a client of. Her partial disclosure does not mitigate that inherent conflict of interest.”
Previously, Boxer had only disclosed the existence of two of the Countrywide loans to reporters in 2008. Wilson questioned why the third loan was kept a secret, saying, “The head of the Senate Ethics Committee should be above reproach. It certainly raises questions.”
The Foundation for Ethics in Public Service has now filed formal complaints with both the Senate Ethics Committee and Attorney General Eric Holder for this particular failure of Boxer to disclose the Alameda County refi for her son Doug’s home. “It’s been 8 years where it should have been disclosed, and she did not,” said Leslie Merritt, Executive Director of the Foundation.
“As head of the Senate Select Committee on Ethics, she should have listed everything,” Merritt added.
“Boxer’s committee concluded that both Senators Dodd and Conrad ‘should have exercised more vigilance’ to avoid the appearance of impropriety when she herself did not meet that basic standard. She did not recuse herself from overseeing these investigations because of her own Countrywide loans when she should have,” Wilson said.
Wilson called on the Senate Ethics Committee, which exonerated Dodd and Conrad of any wrongdoing, to redo their inquiries. Both Senators were accused of accepting gifts from Countrywide via the so-called “Friends of Angelo” program. The committee found “no credible evidence” that either Senator had “knowingly accepted a gift.”
However, Dodd had admitted that he knew he was in the VIP program in February 2009. And according to sworn testimony by former Countrywide employee Robert Feinberg to Congress, both Senators Dodd and Conrad were aware they were in the program. As reported by the Wall Street Journal, Dodd “got the red-carpet treatment because of his central role in regulating the financial industry,” according to Feinberg.
The Journal report continues, “Countrywide was for years the biggest single customer of Fannie Mae, the giant government-sponsored mortgage securitizer that has since gone into federal conservatorship. Much of Countrywide’s business was built around its ability to sell loans to Fannie, and [former Countrywide CEO Angelo] Mozilo helped push Fannie to accept dodgier and dodgier paper. Mr. Dodd in turn supported this goal by pressing Fannie to do more for ‘affordable’ housing.”
“Boxer’s commission completely botched this investigation. She said Dodd and Conrad didn’t know they were getting special treatment. It is crystal clear they did know,” Wilson said. Dodd reportedly saved $75,000 because of the preferential treatment, and did not seek reelection in 2010 because of his involvement with Countrywide.
Also included in the “Friends of Angelo” program were former Fannie Mae CEO’s Franklin Raines and Jim Johnson.
Wilson said Countrywide’s bankruptcy would not have been possible without support from Fannie Mae and Freddie Mac. GSE purchases of mortgages from Countrywide gave it the ability to originate some $789 billion of so-called “Best Practices” mortgages that helped to fulfill the Government Sponsored Enterprises’ “affordable housing goals,” according to research by former chief credit officer of Fannie Mae, Edward Pinto.
Those “affordable housing goals” helped to facilitate both companies’ downfalls, according Pinto’s research. Both Fannie Mae and Freddie Mac were placed in conservatorship in 2008 by Congress, and have received as much as $145 billion in taxpayer assistance.
“Dodd and Conrad’s placement into the ‘Friends of Angelo’ VIP program, when Countrywide was doing some $789 billion worth of business with Fannie Mae and Freddie Mac at the behest of congressionally-mandated ‘affordable housing goals’, were obviously gifts. The Senate kept the easy money flowing from the GSEs to Countrywide, and Countrywide reciprocated to key senators with favorable treatment,” Wilson explained.
“Senator Boxer had no business overseeing the ethics panel against Dodd and Conrad for their own Countrywide loans when she had multiple refi’s from Countrywide during the same period Dodd and Conrad did. Boxer should have recused herself,” Wilson concluded.
Senator Boxer’s Alameda County Property, 2002, at http://washingtonalert.org/wp-content/uploads/2010/09/BoxerAlamedaCountyProperty.pdf
Complaint to Senate Ethics Committee, October 25th, 2010, Foundation for Ethics in Public Service.
Complaint to U.S. Attorney General Eric Holder, October 25th, 2010, Foundation for Ethics in Public Service.
Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at email@example.com to arrange an interview with ALG President Bill Wilson.