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Darrell Issa Vows to Continue Countrywide Probe

Updated: 6:34 p.m.

House Oversight and Government Reform Chairman Darrell Issa (R-Calif.) said today he will continue pursuing an investigation involving lawmakers tied to a controversial mortgage program run by the now-defunct mortgage giant Countrywide Financial Corp.

Four Members of the House, including the chairman of an influential committee, are now at the center of a probe into special perks provided to lawmakers and other officials by Countrywide.

“The Oversight Committee continues to press forward with its now more than three-year long probe of the Countrywide VIP program,” Issa spokesman Frederick Hill said in a statement. “Even as the investigation yields new developments, numerous questions about the VIP program remain unanswered. Critics of the investigation have not and will not deter Chairman Issa’s commitment to exposing what occurred.”

Two California Republicans, Armed Services Chairman Buck McKeon and retiring Rep. Elton Gallegly, were named Friday by the Wall Street Journal as having been referred to the House Ethics Committee for involvement in a Countrywide VIP program.

Reps. Pete Sessions (R-Texas) and Edolphus Towns (D-N.Y.) were identified today as the other Members.

A McKeon spokeswoman said he is “committed to transparency on this — he believes that the actions of Countrywide should be looked into and wants to get to the bottom of what Countrywide did to his loan 13 years ago.”

A spokesman for Gallegly said the lawmaker received one loan from Countrywide for $77,000 at 5.75 percent interest in 2004, which he paid off the following year. The spokesman added that Gallegly is not accused of any wrongdoing.

Earlier today, Oversight and Government Reform ranking member Elijah Cummings (D-Md.) sent a letter to Issa asking how he plans to proceed with his investigation of lawmakers tied to the controversial mortgage program following reports about McKeon and Gallegly.

In the letter, Cummings asked Issa whether he plans to publicly identify the lawmakers in question and how he intends to proceed with scheduled interviews of Countrywide officials since he also asked the Ethics Committee to open its own inquiry in December.

“Since you failed to consult with me before taking these actions, I have several questions about how you want to proceed with the investigation,” Cummings wrote.

Since 2008, Issa has been investigating which Members of Congress participated in Countrywide’s VIP program. Documents produced in response to a subpoena issued on March 7, 2011, showed that four additional lawmakers received loans through the “Friends of Angelo” program — named for former company CEO Angelo Mozilo — including McKeon and Gallegly, both Republicans from Southern California, where Countrywide was based.

Other lawmakers who have been publicly linked to the program, which offered Members discounts on mortgages as a way to curry favor, include Sen. Kent Conrad (D-N.D.) and former Sen. Chris Dodd (D-Conn.).

The Senate Ethics Committee in August 2009 concluded that there was “no credible evidence” that Conrad and Dodd had knowingly participated in a loan program not available to the public. News reports have focused on mortgages that Towns received for properties in Florida and New York.

McKeon and Gallegly acknowledged last week that they were among the Members whom Issa had referred to the House Ethics Committee, but both denied any knowledge of the program from which they received their mortgages. Documents referenced in Cummings’ letter, however, suggest that subpoenaed documents contained correspondence between McKeon and Countrywide employees that referenced the company’s VIP program.

“A follow-up letter sent to Chairman McKeon provided forms for him to sign and stated: ‘Thank you for allowing COUNTRYWIDE’s VIP TEAM to assist you with your financing needs on the above referenced property,’” Cummings wrote.

Other documents indicated McKeon was referred to the mortgage discount program by Michael J. Ferrell, who was then the head lobbyist at the Mortgage Bankers Association of America and had orchestrated the group’s effort to block higher fees on mortgage lenders.

McKeon is known to have received a Countrywide mortgage for $315,000, and Mozilo instructed the individual handling his loan to “take off 1 point, no garbage fees, approve the loan and make it a no doc,” according to documents reviewed by Cummings.

Issa has two interviews scheduled this week with the Countrywide employees who processed McKeon’s loan.

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