Friends of Angelo get new invitations — to a federal grand jury

posted at 10:10 am on September 26, 2008 by Ed Morrissey

Countrywide Mortgage CEO Angelo Mozilo offered sweetheart deals on loans to his “friends”, who just happened to be people who had oversight responsibilities on his business.  People like Fannie Mae CEO/chair Jim Johnson, Senators Chris Dodd and Kent Conrad, and others got below-market-rate loans from Mozilo through a “Friends of Angelo” program at one of the main lenders at the heart of the subprime collapse.  Now a federal grand jury wants to talk to Angelo’s circle of friends to determine whether indictments for corruption are in order:

Countrywide Financial Corp., the biggest U.S. mortgage lender, made large, previously undisclosed home loans to two additional executives of Fannie Mae, the government-chartered firm at the center of the U.S. credit crisis.

One of Countrywide’s previously undisclosed customers at Fannie was Jamie Gorelick, an influential Democratic Party figure whose $960,000 mortgage refinancing in 2003 was handled through a program reserved for influential figures and friends of Countrywide’s chief executive at the time, Angelo Mozilo. Ms. Gorelick was Fannie Mae’s vice chairman at the time.

Another Countrywide client was recently ousted Fannie Mae Chief Executive Daniel Mudd, though it isn’t clear whether he received special treatment on two $3 million mortgage refinancings he made when he was the company’s chief operating officer. …

Countrywide loans on preferential terms to influential figures are the subject of a federal grand jury investigation in Los Angeles, according to people involved in the inquiry. Prosecutors subpoenaed records of many of the so-called “Friends of Angelo” loans in August, lawyers and others familiar with the matter said. …

While Countrywide was developing a closer working relationship with Fannie Mae, the company also had created a special path to handle loan applications from influential figures. The “Friends of Angelo” program channeled loan applications from celebrities, public figures and sports stars — often singled out by Mr. Mozilo — to a department where the borrowers received special treatment, sometimes including lower interest rates and a reduction in fees.

It’s been a while since we’ve heard from Jamie Gorelick.  The former 9/11 Commission panelist wound up being one of the focal points of the dot-connecting afterwards, as she pushed for further separation of law enforcement and intelligence efforts in the years prior to the 9/11 attacks, even while al-Qaeda attacked American embassies in Africa and the USS Cole.  Now she turns up at Fannie Mae, taking the same kind of insider loans while having oversight responsibilities for the GSE and the manner in which its business got transacted with other firms, including Countrywide.

Gorelick claims she never knew she got preferential treatment.  For that matter, Barack Obama’s campaign adviser Jim Johnson says the same thing.  However, both got loans a full point lower than market value at the time, after going outside the normal channels to get their loans handled.  Are we to believe that the CEO of Fannie Mae and a member of its board were completely ignorant of the going rate for residential loans at the time of their application?  What business did they think they were in, anyway?  The rate for residential loans is the center of Fannie Mae’s business.

The notion that they were ignorant of their preferential treatment insults both their intelligence and ours.  I suspect that a federal grand jury will feel the same way if Gorelick and Johnson try to use that line in their testimony, assuming they don’t just take the Fifth when called.

Gorelick hasn’t had any role in the presidential campaigns, but Johnson has been a high-level adviser to Barack Obama — and still is.  Chris Dodd has taken leadership on the bailout bill negotiations on Capitol Hill.  With two Democrats this closely tied to a federal grand jury action, they’d better hope that the grand jury takes its time in assessing the evidence.  This to me seems a lot more worthy of an investigation than a dismissal of a political appointee in Juneau.


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Please dear Lord, expose these tools to justice and save us from ourselves! Amen.

Akzed on September 26, 2008 at 10:13 AM

Naw, Alaskan local politics is more important then an economic meltdown…haven’t you been reading the papers…the Democrats have done nothing wrong.

right2bright on September 26, 2008 at 10:14 AM

The wheels of justice grind slowly, but they grind exceedingly fine. When the smoke and mirrors fall away, taxpayers will see what a cesspool they are being sold.

Terrie on September 26, 2008 at 10:14 AM

Oh please please please subpoena Chris Dodd!

I want to see his big butt in the hot seat answering questions for a change!

pilamaye on September 26, 2008 at 10:15 AM

They don’t think we think they didn’t know they were getting preferential treatment.

They just KNOW that we can’t PROVE they knew they were getting preferential treatment.

It’s the “I don’t recall” gambit, perfected by Gorelick in her years in the Clinton White House.

They’re all scum anyway. If this bailout proceeds, I won’t ever vote Republican again.

Martin on September 26, 2008 at 10:17 AM

If this continues, half of Congress would have to be jailed.

tarpon on September 26, 2008 at 10:17 AM

Jamie Gorelick: why is this woman such a liability for our country? Every thing that she touches….

carbon_footprint on September 26, 2008 at 10:18 AM

I’m just happy that the media whores are ignoring this and concentrating instead on Bristol Palin’s abdomen.

Bishop on September 26, 2008 at 10:18 AM

tarpon on September 26, 2008 at 10:17 AM

At least the majority.

AubieJon on September 26, 2008 at 10:19 AM

I hope they do as much digging as Obama’s army of lawyers (& the media) are doing in Alaska.

jgapinoy on September 26, 2008 at 10:19 AM

To add insult to injury Gorelick reportedly earned 26 million dollars during her brief tenure at Fanny.

As for MSM newsman Roger Mudd’s son Daniel, his obsequious speech to the Congressional Black Caucus effusively thanking them for showing Fanny the way, and for being Fanny’s partner in their grand plan provide housing to everyone, comes straight out of Atlas Shrugged.

Rush played it several times. If you can get a transcript, it’s an eye-opener.

JiangxiDad on September 26, 2008 at 10:19 AM

If this continues, half of Congress would have to be jailed.

Theres the problem and source of the spirited wrangling over this Bailout Bill. Nobody is willing to share a cell with Barney Frank.

meci on September 26, 2008 at 10:21 AM

Jamie Gore-Lick is always around the very big scandals.

custer on September 26, 2008 at 10:23 AM

If the MSM wasn’t hiding this sh*t, there’d be a revolution. Dodd, Frank, Pelosi, Reid would be strung up in the streets – and should be.

marklmail on September 26, 2008 at 10:24 AM

Jamie Gorelick: why is this woman such a liability for our country? Every thing that she touches….

carbon_footprint on September 26, 2008 at 10:18 AM

Mistress of Disaster: Jamie Gorelick

Also:

The magnitude of Fannie’s machinations is stunning, and in two key areas in particular they deserve to be better understood. By improperly delaying the recognition of income, it created a cookie jar of reserves. And by improperly classifying certain derivatives, it was able to spread out losses over many years instead of recognizing them immediately.

In the cookie-jar ploy, Fannie set aside an artificially large cash reserve. And — presto — in any quarter its managers could reach into that jar to compensate for poor results or add to it to dampen good ones. This ploy, according to Ofheo (Office of Federal Housing Enterprise Oversight), gave Fannie “inordinate flexibility” in reporting the amount of income or expenses over reporting periods.

This flexibility also gave Fannie the ability to manipulate earnings to hit — within pennies — target numbers for executive bonuses. Ofheo details an example from 1998, the year the Russian financial crisis sent interest rates tumbling. Lower rates caused a lot of mortgage holders to prepay their existing home mortgages. And Fannie was suddenly facing an estimated expense of $400 million.

Well, in its wisdom, Fannie decided to recognize only $200 million [of losses], deferring the other half. That allowed Fannie’s executives — whose bonus plan is linked to earnings-per-share — to meet the target for maximum bonus payouts. The target EPS for maximum payout was $3.23 and Fannie reported exactly . . . $3.2309. This bull’s-eye was worth $1.932 million to then-CEO James Johnson, $1.19 million to then-CEO-designate Franklin Raines, and $779,625 to then-Vice Chairman Jamie Gorelick.

JiangxiDad on September 26, 2008 at 10:26 AM

If this continues, half of Congress would have to be jailed.

Way more than half to include both POTUS candidates and also members of Clinton’s and Bush’s administration. Time to pull back the carpet and watch the roaches make a run for it, but it won’t happen because Americans have become myopic sheeple.

Fletch54 on September 26, 2008 at 10:26 AM

marklmail on September 26, 2008 at 10:24 AM

pelosi is reported to own $500,000 of Fannie stock

JiangxiDad on September 26, 2008 at 10:27 AM

Please dear Lord, expose these tools to justice and save us from ourselves! Amen.

Akzed on September 26, 2008 at 10:13 AM

AMEN & AMEN!

If McCain wins he MUST go after these people and not be consumed with bipartisan crap. As Rush says, we want to crush them!

freeus on September 26, 2008 at 10:27 AM

MEMO to RNC;

Today,line up all the comin home to roost involvement,
the names,all the connections,and

then drop the political bomb,

because the Libs are already blaming the Republican
Party!!!!!!!!!!!!

So,EXPEDITE!

canopfor on September 26, 2008 at 10:27 AM

Rush played it several times. If you can get a transcript, it’s an eye-opener.

JiangxiDad on September 26, 2008 at 10:19 AM

There is a video of it someplace, but can’t remember where. You are correct. Even then, he knew they were in trouble. He specifically pays homage to Barry, IIRC.

a capella on September 26, 2008 at 10:28 AM

Why are we figuritively guillotining the taxpayers instead of literally guillotining these criminals? I ask you.

Buddahpundit on September 26, 2008 at 10:30 AM

Jamie Gorelick is toxic. We saw that in the 9-11 hearings. I want these people under oath to answer a bunch of questions.

d1carter on September 26, 2008 at 10:31 AM

Are we to believe that the CEO of Fannie Mae and a member of its board were completely ignorant of the going rate for residential loans at the time of their application?

People like this are so out of touch, I have no doubt that they knew they were getting a good deal but it didn’t even register that there was anything questionable about it. Not to defend Johnson or America’s traitor Gorelick, just pointing out that it really isn’t that far fetched to believe that these people were ignorant since they don’t live in the same world as the rest of us.

highhopes on September 26, 2008 at 10:31 AM

correct. time for the slash and burn policy with the Lib crooks.

marklmail on September 26, 2008 at 10:32 AM

pelosi is reported to own $500,000 of Fannie stock

JiangxiDad on September 26, 2008 at 10:27 AM

That should be past tense. Pelosi now owns some really expensive toilet paper.

highhopes on September 26, 2008 at 10:33 AM

Unfortunately most of the Friends of Angelo are also the Friends of Obama.

It is fun to dream about them being held accountable though. Doubtful it’ll happen.

As for MSM newsman Roger Mudd’s son Daniel, his obsequious speech to the Congressional Black Caucus effusively thanking them for showing Fanny the way, and for being Fanny’s partner in their grand plan provide housing to everyone…

JiangxiDad on September 26, 2008 at 10:19 AM

At least partial YouTube here. John Gibson comment at the end.

Gilda on September 26, 2008 at 10:33 AM

Jamie Gorelick is toxic. We saw that in the 9-11 hearings. I want these people under oath to answer a bunch of questions.

d1carter on September 26, 2008 at 10:31 AM

I want them frog marched into the DOJ in one giant perp walk.

highhopes on September 26, 2008 at 10:34 AM

Some justice finally. I can’t even bear how Barney Frank and Chris Dodd are allowed to negotiate and talk about bail outs. The MSM will likely bury this but I hope this becomes bigger and bigger and will come to hunt Obama in November.

promachus on September 26, 2008 at 10:34 AM

Who is going to coach Obama when Johnson and Raines are in the dock? I’d like to see Dodd and Frank under subpoena as well.

Vashta.Nerada on September 26, 2008 at 10:36 AM

Gilda on September 26, 2008 at 10:33 AM

Ah, yes. Knew I’d seen it. Thank you.

a capella on September 26, 2008 at 10:36 AM

Fannie Mae has been following Countrywide all around the nation, buying up foreclosures as fast as the auctioneer could drop his gavel. Sham mortgage originators like AFS were demanding homeowners/homebuyers finance no less than 90% of the appraised value of the property, and then immediately selling those loans to Countrywide.

AubieJon on September 26, 2008 at 10:38 AM

I want these crooks exposed. You know, even with what we know about this economic mess, I think there are probably even bigger scandals lurking that we’re not aware of.

(Ended sentence with “of.” Bad. Sorry.)

Oink on September 26, 2008 at 10:38 AM

promachus on September 26, 2008 at 10:34 AM

The grand jury proceeding should be secret, but there may be some leaks as to who gets subpoened. If Barry gets elected, the whole thing will get shut down.

a capella on September 26, 2008 at 10:39 AM

Watch how fast that U.S. attorney gets fired if Obama wins.

rockmom on September 26, 2008 at 10:40 AM

An open letter to the federal investagators, federal grand jury, and FBI: Look in every hole and under every rock, find every link, pull them out by the roots, gather them up, and burn the POS’s.

The voting public needs to take back this country! Liberty or DIE!

jbh45 on September 26, 2008 at 10:40 AM

There is no way that these people did not know that they were in the higher tier. And we are supposed to let them “REFORM” our HEALTHCARE????? The financial crisis is just a preview of what they will do to our healthcare. I am sick of it. WHO DO THEY THINK THEY ARE???????? Why don’t they spend their own money? Lord knows, they have stolen enough of it from us anyway.

bloggless on September 26, 2008 at 10:40 AM

Don’t worry, once The Obamassiah becomes president (shudder) the inJustice Department will be busy investigating the NRA and everyone else who has the temerity to question/criticize The One.

Bring back the Fairness Doctrine? Hell, they’re going to bring back the Alien and Sedition Acts!

rbj on September 26, 2008 at 10:41 AM

While an average Jane schoolteacher like me can’t get a loan at all, let alone one with a dynamite interest rate.

Sheesh.

Bob's Kid on September 26, 2008 at 10:41 AM

Sounds like a self-made ad for the McCain campaign.

Even funnier to see Barney flapping his lips the last couple of days trying to hide his involement in this disaster.

GarandFan on September 26, 2008 at 10:41 AM

The Dems who are screaming the loudest are the ones most responsible for this mess.

bloggless on September 26, 2008 at 10:42 AM

Jamie Gorelick.

The wound that never heals. She’s like a cancer that falls out of remission every few years.

drjohn on September 26, 2008 at 10:43 AM

Chris Dodd needs to step down! How can he be the negotiator? This really stinks and the message isn’t getting out!!!! Rasmussen has McCain still down.

petunia on September 26, 2008 at 10:51 AM

Let’s just say that they had a “Special Club” and we paid their dues!

bloggless on September 26, 2008 at 10:57 AM

A perp walk is a wondrous thing to see. The raincoat and pompador are just added delights. Please, if there is a God in heaven (don’t answer that AP) let it come to fruition.

Fuquay Steve on September 26, 2008 at 11:03 AM

Pass the popcorn please?

PappaMac on September 26, 2008 at 11:03 AM

Is anybody watching Reid and Dodd right now?

The balls on these bastards.

UNBELIEVABLE!

FiveWays on September 26, 2008 at 11:05 AM

If McCain wins he MUST go after these people and not be consumed with bipartisan crap. As Rush says, we want to crush them!

freeus on September 26, 2008 at 10:27 AM

Palin already said that McCain told her very early on that this type of work, along with energy, would be her job.

CC

CapedConservative on September 26, 2008 at 11:09 AM

Gilda on September 26, 2008 at 10:33 AM

Thank you Gilda. I hope ED or AP put this video up.

JiangxiDad on September 26, 2008 at 11:18 AM

Please dear Lord, expose these tools to justice and save us from ourselves! Amen.

Akzed on September 26, 2008 at 10:13 AM

Amen!

I will not sign on to this bailout until the Community Reinvestment Act is repealed and Friends of Fannie and Freddie are prosecuted.

PattyJ on September 26, 2008 at 11:31 AM

While nothing will probably happen to these folks, for shame, for shame, it will still make for some great flop sweat.

I want some of that popcorn mentioned above.

patrick neid on September 26, 2008 at 11:33 AM

This can’t happen fast enough.

Cindy Munford on September 26, 2008 at 11:36 AM

Indict them all and let 12 average Americans decide if it’s corrupt.

TheBigOldDog on September 26, 2008 at 11:40 AM

If Gorelick, Dodd, et al. were too stupid to know they were getting preferential treatment, they’re too stupid to be tasked with oversight. Oh, I see!

Isn’t it time to start calling Obama the Friends of Angelo candidate?

JM Hanes on September 26, 2008 at 12:49 PM

Wouldn’t be nice to see a big huge dem BBQ. Jamie Gorlick, Barney Frank, and Chris (I swear this guy spends more time in hair salon) Dodd should burn in hell. These people have damaged America enough!

byteshredder on September 26, 2008 at 1:16 PM

Good ol’ Jamie Gorelick. She’s worked actively on the wrong side of national security AND economic issues now. What a gal!

Since the nation is now paying attention, what chance is there of all the crats antics, corruption and lies really getting out there?

hump1201 on September 26, 2008 at 1:41 PM

Come on Grand Jury! The GOP could use an October Surprise at least once. Or at least to counter the October Surprise from the left.

Sultry Beauty on September 26, 2008 at 2:08 PM

Does Obama have a single mentor or advisor who isn’t a crook, a radical, a terrorist or all of the above?

Disturb the Universe on September 26, 2008 at 3:29 PM

Gorelick. The name itself conjures images of predatory beasts feasting on corpses.

Disturb the Universe on September 26, 2008 at 3:30 PM

Gorelick claims she never knew she got preferential treatment. For that matter, Barack Obama’s campaign adviser Jim Johnson says the same thing.

…so did Conrad. I don’t believe Dodd said anything similar. IIRC, Dodd was rather arrogant about why anyone would even question his intentions.

91Veteran on September 27, 2008 at 12:57 AM