December 20, 2011 in Nation/World

Lawmaker says House members got VIP loans

Countrywide probe yields new details
Los Angeles Times
 

Issa
(Full-size photo)

WASHINGTON – Four current members of the House of Representatives received special VIP loans from Countrywide Financial Corp., according to the head of a congressional committee, raising new questions about the extent of the company’s attempts to win favor with Washington policymakers as it built its subprime mortgage business.

The disclosure came in a letter last week from Rep. Darrell Issa, R-Calif., who chairs the House Oversight and Government Reform Committee, informing leaders of the House Ethics Committee about “possible wrongdoing” by lawmakers. Issa did not name the House members who purportedly received the discounted loans. The information surfaced as part of his committee’s ongoing investigation of the Countrywide VIP program.

“Testimony and documents show that Countrywide used the VIP program to build relationships with government officials and others positioned to advance Countrywide’s business interests,” Issa wrote to the Ethics Committee’s chairman, Jo Bonner, R-Ala., and top Democrat, Linda T. Sanchez of California. The VIP loans often had lower interest rates and fees than those available to the public.

The oversight committee received about 100,000 pages of documents related to the VIP loan program after issuing a subpoena in February to Bank of America Corp., which now owns Countrywide. The VIP program also was known as “Friends of Angelo,” a reference to Countrywide’s former chief executive Angelo R. Mozilo.

Under Mozilo, Countrywide helped fuel the subprime mortgage boom and cultivated relationships with Washington policymakers. Last year, Mozilo agreed to a $67.5 million settlement of civil fraud and insider-trading allegations by the Securities and Exchange Commission.

Three of the four House members whose names were forwarded to the Ethics Committee were Republicans and one was a Democrat, according to a congressional aide who was not authorized to speak publicly about the investigation and requested anonymity.


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