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Countrywide Gave ‘VIP’ Loans to Fannie Officials, Congress Countrywide Gave ‘VIP’ Loans to Fannie Officials, Congress

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Congress / Congress

Countrywide Gave ‘VIP’ Loans to Fannie Officials, Congress

Former Sen. Christopher Dodd, D-Conn.(Liz Lynch)

July 5, 2012

Countrywide Financial Corp. made hundreds of discounted loans in order to win influence with members of Congress, their staff, cabinet secretaries and executives at Fannie Mae, the government-backed mortgage giant, according to the Associated Press.

The discounts -- which averaged about 0.5 points -- spanned from 1996 to 2008, according to a report from the House Oversight and Government Reform committee, which was obtained by AP.

Countrywide’s business depended to a great extent on the actions of Fannie Mae.

 

Former Fannie Mae officials James Johnson, Daniel Mudd and Franklin Raines received discounts, according to AP. Indeed, Fannie employees were the most frequent recipients of VIP loans, AP reported. Johnson got his discount after former Countrywide chief executive Angelo Mozilo, "waived problems with his credit rating," according to AP.

The House committee's report said that Mozilo and company lobbyists "may have skirted the federal bribery statute by keeping conversations about discounts and other forms of preferential treatment internal. Rather than making quid pro quo arrangements with lawmakers and staff, Countrywide used the VIP loan program to cast a wide net of influence."

Six current and former members of Congress were named in the report, but their names had already been known, according to AP. Those members include Former Senate Banking Committee Chairman Christopher Dodd, D-Conn; Senate Budget Committee Chairman Kent Conrad, D-N.D; Rep. Howard "Buck" McKeon, R-Calif., chairman of the House Armed Services Committee; Rep. Edolphus Towns, D-N.Y., former chairman of the Oversight Committee; Rep. Elton Gallegly, R-Calif.; and former Rep. Tom Campbell, R-Calif.

Former Housing and Urban Development Secretaries Alphonso Jackson and Henry Cisneros also received discounted loans, as did former Health and Human Services Secretary Donna Shalala.

Faced with mounting losses, Countrywide came under government control in September 2008.

 

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