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.