Dodd, Conrad at Center of Probe
The Senate Ethics Committee is aggressively investigating whether Sens. Kent Conrad (D-N.D.) and Chris Dodd (D-Conn.) received preferential mortgage treatment through Countrywide Financial, with sources saying the inquiry could come to a conclusion in the near future.
The committee’s approach is to “leave no stone unturned,— said one source familiar with the probe.
The panel has already deeply explored the complicated details of how both Senators obtained multiple mortgages for which — their loan officer alleges — hefty fees were waived because they were both part of a VIP program for customers deemed “Friends of Angelo,— for then-CEO Angelo Mozilo.
The source familiar with the investigation confirmed that the committee staff has deposed numerous witnesses with knowledge of the mortgage deals and has called some to testify before Senators who sit on the committee. They have also asked Conrad and Dodd to submit to written questions, which both men said they have done.
Conrad said he would “welcome— the chance to testify before the panel as well because he does not believe he did anything wrong in 2004 when he obtained two loans — one for a vacation property and another for an apartment building that he owns with his brothers in North Dakota.
Conrad defended his actions, saying, “My conscience is absolutely clear. I have done nothing unethical. Nothing.—
Dodd also asserted his innocence: “My conscience is clear in terms of what we did. We negotiated loans, shopped. And the rates they gave us were available readily to the general public.—
It remains unclear what conclusion the Ethics Committee will draw about what has become a he-said, he-said dispute between the Senators and their VIP loan officer, Robert Feinberg.
If the committee finds minimal wrongdoing or an ethical lapse, it could issue a letter of reprimand to one or both Senators. If more serious improprieties are found, the committee could recommend censure by the full Senate or expulsion.
As with all pending cases before the Ethics panel, Chairman Barbara Boxer (D-Calif.) declined to comment.
[IMGCAP(1)]A rapid conclusion to the probe could be a welcome event for Dodd, who is up for re-election next year and trailing his GOP challenger in recent polls. His electoral difficulties can be traced back to the Countrywide scandal and his decision to move his family to Iowa to pursue a long-shot bid for the 2008 Democratic presidential nomination.
In late June, Feinberg testified before Boxer, Vice Chairman Johnny Isakson (R-Ga.) and panel member James Risch (R-Idaho), telling them that members of the Countrywide VIP program received discounts on fees, rates and points, according to Feinberg’s lawyer Anthony Salerno.
Salerno said Feinberg’s deposition and testimony were conducted over an entire day and into the evening. “It was pretty exhaustive,— he said.
Boxer was most focused on asking Feinberg “to what extent [he] remembered the exact conversations— with Conrad and Dodd, Salerno said.
“Bob never tried to gild the lily, so to speak,— Salerno said. “If he didn’t remember the exact details of a conversation, he would say he didn’t remember.—
Isakson — a former real estate broker — focused on the details of the mortgage terms. The bulk of the questioning was conducted by Ethics staffers, Salerno said.
Feinberg told Republican staff on the House Oversight and Government Reform Committee that Dodd and Conrad were aware they were receiving preferential treatment as members of the program. Oversight ranking member Darrell Issa (R-Calif.) has been conducting his own investigation into the Countrywide VIP program.
“By preferential treatment, I mean specifically the suite of advantages, whether he’s knocking the points off, knocking the junk fees,— Feinberg told the Oversight staff, according to a partial transcript of his June 2009 deposition. “I have to preface it by [saying] that we were not allowed to tell anybody that the points were being waived, but we can tell everything else; and, any person, FOA, VIP, whatever they were that was coming through there, it was always instilled in them to let them know their sense of importance of where they were. And that you … were a friend of Angelo’s. You were referred by Angelo. You were approved by Angelo.—
Feinberg explained to the panels that Dodd got a break when Countrywide decided to treat both his homes as “owner-occupied.— Feinberg said regular customers who wanted to refinance an eight-unit apartment building would have been turned away, but that a special allowance was made for Conrad.
Asked whether he told Dodd about his special status with Countrywide, Feinberg said, “Yes, yes,— but then he clarified that the Dodds had been inducted into the VIP program before Feinberg dealt with 2003 loans on their homes in Washington, D.C., and Connecticut.
“I mean, they’d already been there to begin with, so they knew. You know, once you’re basically in the VIP department, you’re in. You know, you’re done,— he said.
Salerno said Feinberg often told “Friends of Angelo— customers that they were getting “special pricing from Angelo— before he went over the terms of the loan with them.
“He was trying to let them know that you were being taken care of because you were a friend of Angelo Mozilo,— Salerno said.
Feinberg also met last year with Justice Department lawyers, including members of the Public Integrity Section, which investigates corruption of public officials, Salerno said.
Dodd and Conrad said they did not know why Feinberg would tell the committees that their VIP status was well-known to them.
“I never talked to this man. I never met him. I don’t know what he’s talking about,— Dodd said of Feinberg. “I never heard of this Friends of Angelo’ program until last June.—
Under questioning from Boxer, Feinberg told the Ethics panel that he specifically remembers having a conversation with Dodd because the Senator told him he had to leave to make a speech, Salerno said.
Dodd told reporters last June — when the news broke that he and Conrad were part of the Countrywide VIP program — that his wife, Jackie, spoke with a company official who told her about the program. Dodd said he and his wife assumed it was a courtesy program for current customers who were trying to refinance.
Conrad and Dodd said they did not find out until well into the loan process that they were part of a VIP program.
Conrad told reporters for the first time Tuesday that he first noticed that he was in the program when he saw a VIP card attached to his loan documents, after he brokered his third mortgage with Countrywide.
“I got a packet back and it had a VIP card stapled to it, which was a surprise to me,— Conrad said. “I had no idea I was in such a program, and I thought, Well, this is like a frequent-flyer program.’ I thought nothing of it. I was a little surprised to see this card on the folder that had my documents, but I did not know before then I was in any special program.—
Feinberg, in the House transcript released Monday, also mentioned the cards as a red flag for participants.
“When the loan comes out of the VIP processing unit, their business cards are stapled in loan packages. It says VIP supervisor,’ VIP underwriter,’— he said.
In obtaining a loan on a vacation property, Conrad has acknowledged that he personally spoke to Mozilo, after being referred by a friend. Mozilo has since been charged with insider trading and fraud by the Securities and Exchange Commission.
Jessica Brady contributed to this report.