With Congress grilling Wall Street executives over the financial collapse, why not have some of the real culprits testify in their investigations? One of them is close at hand; in fact, he’s pretending to lead the investigation while really being one of its best targets. Senator Chris Dodd took massive amounts in political contributions from Fannie Mae, Freddie Mac, and Countrywide, while securing sweetheart deals from that same lender, all while supposedly providing the oversight that somehow missed the rotten struts under the entire subprime market. The Wall Street Journal wonders why Dodd’s asking questions rather than answering them:
Former Lehman Brothers CEO Dick Fuld was under oath Monday when he was grilled on Capitol Hill about his role in the current financial meltdown. But if Members really want to understand the credit mania, they should also call Chris Dodd.
The Connecticut Senator has been out front denouncing the “companies that form the foundation of our financial markets,” for “their insatiable appetite for risk.” He has also decried “reckless, careless and sometimes unscrupulous actors in the mortgage lending industry” and he has proclaimed that “American taxpayers deserve to know how we arrived at this moment.” To that end, we propose he take the stand — under oath.
Dodd should get expelled first for his conflict of interest in accepting his sweetheart loans from Countrywide in the “Friends of Angelo” program. Dodd now claims he never knew that he saved thousands of dollars in lower interest rates and fees, but Countrywide’s loan officer, Robert Feinberg, scoffs at that notion. He personally discussed the loans with Dodd, as he did with other FOAs, to make sure he understood the bargain he was getting.
That was the entire point of the program, as Feinberg points out for the extraordinarily clueless. Why cut Dodd a break and lose extra profit if Dodd was unaware of the deal? It wasn’t intended to be a secret, but to butter up policymakers and watchdogs. Jim Johnson at Fannie Mae got millions in FOA loans while he was supposed to keep an eye on the quality of Countrywide loans he was buying. Jamie Gorelick served on the Fannie Mae board and also got an FOA loan.
Dodd sold out the American taxpayer for a few thousand dollars and a boatload of campaign contributions, and then blocked the kind of reform that would have prevented this collapse. Dodd needs to start answering questions rather than serving as an Inquisitor to Wall Street execs, and he should be doing it from the status of an ex-Senator.