WASHINGTON – A Republican lawmaker says documents show more senators and staff members than previously known received sweetheart mortgages from the former Countrywide Financial Corp., based on their perceived ability to help the company.
Rep. Darrell Issa, R-Calif., said after reviewing Countrywide loan documents that the former lender's VIP mortgage program was not limited to the two senators whose discounted loans were well publicized: Chris Dodd, D-Conn. and Kent Conrad, D-N.D.
"Several unidentified senators and Senate employees received benefits through Countrywide's VIP program," Issa wrote the Senate ethics committee this week. The lender was looking for officials "positioned to advance Countrywide's business interests," Issa said.
The ethics committee a year ago scolded both Dodd and Conrad for not being more careful to avoid the appearance of favoritism from Countrywide. The committee cleared both senators of any rules violations. Dodd is not running for re-election.
Issa, who did not give details of discounted loans to House members and their staffs, said at least 30 loans processed by Countrywide's VIP unit apparently went to Senate staff — 12 to the office of Sen. Robert Bennett, a Utah Republican who lost his re-election bid when his state party convention rejected him as a candidate.
Those numbers, however, only represent some early discoveries from the 37,000 documents produced so far by Bank of America, which acquired Countrywide. If names of the loan recipients become public, the information is certain to surface in campaigns for the midterm congressional elections.
California-based Countrywide was a major player in the subprime mortgage market and became the biggest U.S. mortgage lender overall before the foreclosure crisis hit. It was bought by Bank of America in July 2008.
The Countrywide records were subpoenaed by the House Committee on Oversight and Government Reform, where Issa is the top Republican. The subpoena instructs the bank to give the House ethics committee documents that identify House VIP loan recipients, but is silent on handling information on senators and their staffs.
Issa said the 30 loans processed by Countrywide's VIP unit went to borrowers who identified their place of employment as either "U.S. Senator," ''U.S. Senate" or the office of Senator Robert Bennett." Issa spokesman Frederick Hill said Issa does not have documents indicating why Bennett's employees received the VIP loans.
Bennett said in a statement: "I've never had a Countrywide mortgage and I do not inquire into the personal financial dealings of my staff. I have no idea which of them have mortgages and with whom."
He added, "Should the Senate ethics committee decide the matter warrants an inquiry, I will certainly assist them in any way, and require that my staffers do the same."
Issa said many loans to Senate employees were processed in 2002 and 2003 in the midst of a mortgage boom.
"Additional testimony and documents gathered during the Oversight Committee's investigation confirm that Countrywide used the VIP program to build relationships with government officials and others positioned to advance Countrywide's business interests," Issa said.
"Furthermore, a high concentration of VIP borrowers in specific Senate offices is prima facie evidence that Countrywide strategically targeted members positioned to help the company during a critical period."