The Democratic Friends of Angelo

posted at 2:00 pm on June 13, 2008 by Ed Morrissey

Barack Obama has tried to score serious populist mileage from the subprime meltdown, explicitly naming Countrywide Financial as one of the villains of the economic turbulence caused by the credit crisis. Unfortunately, one of his own advisers had to resign as a result; Jim Johnson got millions in sweetheart loan deals from Countrywide CEO Angelo Mozilo under a “Friends of Angelo” program that coincidentally favored the powerful and the politically connected. Today, Conde Nast reveals a few more of Angelo’s friends — and Obama may have to find another villain quickly:

Two U.S. senators, two former Cabinet members, and a former ambassador to the United Nations received loans from Countrywide Financial through a little-known program that waived points, lender fees, and company borrowing rules for prominent people.

Senators Christopher Dodd, Democrat from Connecticut and chairman of the Banking Committee, and Kent Conrad, Democrat from North Dakota, chairman of the Budget Committee and a member of the Finance Committee, refinanced properties through Countrywide’s “V.I.P.” program in 2003 and 2004, according to company documents and emails and a former employee familiar with the loans.

Other participants in the V.I.P. program included former Secretary of Housing and Urban Development Alphonso Jackson, former Secretary of Health and Human Services Donna Shalala, and former U.N. ambassador and assistant Secretary of State Richard Holbrooke. Jackson was deputy H.U.D. secretary in the Bush administration when he received the loans in 2003. Shalala, who received two loans in 2002, had by then left the Clinton administration for her current position as president of the University of Miami. She is scheduled to receive a Presidential Medal of Freedom on June 19.

Nancy Pelosi and Harry Reid promised us the “most ethical Congress ever” in 2006. How’s that working out? This is practically a who’s who of Democratic power brokers, in Congress as well as the Clinton administration. The Bush administration gets zinged here with Alphonso Jackson, who already resigned under an ethical cloud.

Angelo picked his friends well. Dodd chairs the Banking Committee, and the $58,000 Countrywide saved him by giving him a below-market interest rate probably served the lender well in keeping their misdeeds below the radar screen. It went well with the $21,000 in campaign contributions Dodd received from Countrywide.

Conrad saved over $10,000 under the Friends of Angelo program with the deduction of a point on one loan. He got a second loan through Countrywide when Mozilo intervened to approve the loan against company policy, on the basis of his position as a Senator. Conrad can’t recall ever meeting Angelo, but the evidence of “friendship” looks pretty clear.

For those who wonder how Countrywide got away with its mismanagement and its bad lending practices to the point of collapse, all we can say is that they had Friends in high places — or in low places, depending on how you look at it. The most ethical Congress ever put the foxes in charge of the henhouse, and it’s the homeowners who will suffer the consequences.  Will Obama throw Chris Dodd, Kent Conrad, and Donna Shalala under the bus, too, as well as Pelosi and Reid?


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

hahahahah no.

apollyonbob on June 13, 2008 at 2:04 PM

This would explain why Democrats did nothing about the crisis.

Dodd is a pathetic twit. I absolutely despise him.

drjohn on June 13, 2008 at 2:10 PM

This is not the (insert name here) I know.

Mr. Bingley on June 13, 2008 at 2:10 PM

At the smoothie place I go to, after I buy 9, I get the 10th free.

I think I works like that for houses too.

Rhinoboy on June 13, 2008 at 2:11 PM

Change you can believe in…

Rick on June 13, 2008 at 2:13 PM

the Bush administration gets zinged here

…but Obama has already had more corrupt/controversial colleagues than Bush has had in his entire career.

jgapinoy on June 13, 2008 at 2:14 PM

This is really going to piss off Ed McMahon.

fogw on June 13, 2008 at 2:17 PM

Just checked the NY Times website, and nothing about this appears on the main page. There is a “blog” entry about a Bush verbal gaffe, though, and another chronicling John Kerry’s bicycling adventures. Plus, of course, an editorial praising the Supremes’ Gitmo decision as a slap upside Bush’s head.

So I call this a shameless conservative smear on Dodd, Shalala, et al.

MrScribbler on June 13, 2008 at 2:18 PM

This is just another distraction engineered by the right wing media!

Dread Pirate Roberts VI on June 13, 2008 at 2:18 PM

The Bush administration gets zinged here with Alphonso Jackson, who already resigned under an ethical cloud.

I expect that any mention of this story by the MSM will be led by the Bush Adm ties – the true culprits.

Rick on June 13, 2008 at 2:25 PM

Now everyone close your eyes and imagine if they were all republicans

front page NYT..Washington Post..

galtg on June 13, 2008 at 2:25 PM

Well no wonder the democrats want a bailout they want to enrich the pot to raid it again and make more money off the taxe payers.

This has turned from a housing crisis to a congressional scandle

William Amos on June 13, 2008 at 2:29 PM

This does not help Michelle’s children.

Sefton on June 13, 2008 at 2:38 PM

This does not help Michelle’s children, nor Michelle’s baby daddy.

JiangxiDad on June 13, 2008 at 2:45 PM

This is why it’s so stupid for Democrats to call out companies by name to try to demonize them. They end up looking stupid every time, whether it’s Mike Moore with investments in Halliburton, John Edwards shopping at WalMart, or this.

MayBee on June 13, 2008 at 2:52 PM

a little-known program

LOL, yeah, it’s called the “graft” program.

PattyJ on June 13, 2008 at 3:14 PM

For review…

The CHAIRMAN of the Senate Banking Committee reportedly received favorable loans from a corporation that has affairs before the Senate Banking Committee.

Senator Dodd’s office is now denying they knew anything about the VIP or “FOA”(Friends of Angelo) treatment.

PS: Conde Nast and its employees are the rightest rightiest right wingers evar.

gabriel sutherland on June 13, 2008 at 3:20 PM

Kewl Change…
The Dems can do no wrong with the MSM in their pockets.

Travis1 on June 13, 2008 at 3:22 PM

Hi.lar.i.ous.

The House passed a large anti-predatory lending bill last December. Mysteriously, the Senate Banking Committee has not even held a markup of similar legislation. Even Democrats on the Committee have been fuming about Chris Dodd dragging his feet on this. Guess we know why! Instead, Dodd has chosen to throw brickbats at the Fed for “failing to adequately regulate” subprime lending.

Meanwhile, Chuck Schumer has been on a jihad against Countrywide for over a year. Bet he was thrilled to read this story today!

rockmom on June 13, 2008 at 5:18 PM

MSM= Move along…nothing to see here….

Tim Zank on June 13, 2008 at 5:37 PM

Nany Pelosi and Harry Reid might want to consider filling that “swamp” back up. Seeems to be plenty of slimey things slithering around , Republican AND Democrat. HEH Pass the popcorn Nahani!

Rick554 on June 13, 2008 at 6:13 PM

“While CEO Of Fannie Mae, Johnson And Mozilo Worked Closely And Maintained A “Close Friendship.” “From 1991 to 1998, Mr. Johnson served as CEO of the Federal National Mortgage Association, also known as Fannie Mae, which worked closely with Countrywide, one of the nation’s leading lenders and loan servicing companies. In 1996, Mr. Johnson named Mr. Mozilo as chairman of Fannie Mae’s national advisory council. A 1999 article in the American Banker said the two men had a ‘close friendship.’” NRO

In my part of town, when someone influences a decision-maker like Jim Johnson by providing services at a preferential rate while that person has the ability to substantively improve my wealth – we call that a bribe.

Fannie Mae periodically would create attractive loan programs that would be made available to just a handful of lenders nationwide. Borrowers could access those loans only through those hand picked lenders. Hmmm. Wonder how Countrywide kept getting on that list.

THAT is why this is significant. How many more times are we willing to hear Obama’s excuses about the kind of advisors he surrounds himself with? Old time Chicago politician. And a leftist, too. A dream candidate for the Presidency.

in_awe on June 13, 2008 at 6:40 PM

Countrywide also got SIGNIFICANT breaks on its “guarantee fees” paid to Fannie Mae, in return for committing to send all its loans to them. It was a virtual lapdog for Fannie in terms of lobbying as a result. This is well known throughout the mortgage industry. I sat next to Angelo Mozilo once at a lavish Fannie Mae dinner and it was obvious how chummy he was with Johnson. They were golfing buddies and ran in some of the same social circles.

If Jim Johnson wanted cheap loans for himself or his Democrat pals, all he had to do was call Angelo and it was done. We probably will not find any Republicans getting these Friends of Angelo loans because Jim Johnson and his successor, Frank Raines, only traveled with Democrats. It’s doubtful that Fannie under the leadership of Johnson or Raines would have bought any below-market loans to Republicans.

As I said when the Johnson story broke, there is a treasure trove here for Republicans if they will just dig a little. The biggest “culture of corruption” in Washington in the last 15 years was Fannie Mae buying half of the Democratic Caucus.

rockmom on June 13, 2008 at 7:45 PM