Corruption: Chris Dodd's teetering re-election chances weren't helped by news that the senator may have lied about not knowing he got preferential treatment as one of Countrywide Financial's Friends of Angelo program.
Can you foreclose on a house of cards? Dodd, D-Conn., may soon find out after the official who handled his mortgages testified before both the House Government Reform and Oversight Committee and the Senate Ethics Committee that Dodd did in fact know he got sweetheart deals from a company that went on to lose billions of dollars on home loans to credit-strapped borrowers.
While head of the Senate Banking Committee that oversaw Countrywide Financial, he got a deal from Countrywide as a "friend" of founder and CEO Angelo Mozilo. He was able to take out two mortgages with no closing costs attached, at fixed rates of 4.25% and 4.50%, something unavailable to most homeowners.
Dodd has claimed that he had no knowledge of any preferential treatment from a man and a company known for preferential treatment of its favorite customers, refinancing his home in Connecticut and another residence in Washington.
Also in on the sweetheart deals was Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee. His two Countrywide mortgages in 2004 were for a beach house in Delaware and an eight-unit apartment building in Bismarck, capital of his home state.
"Do you know if during the course of your communications" with Sen. Dodd or his wife "that you ever had an opportunity to share with them if they were getting special VIP treatment?" Feinberg replied, "Yes, yes."
According to the AP report, Feinberg told the committees that Countrywide VIPs received discounts on rates, fees and points. Dodd got a break when Countrywide counted both his Connecticut and Washington homes as primary owner-occupied residences -- a fiction, according to Feinberg. Conrad received a type of commercial loan that he was told Countrywide didn't even offer.
Dodd has had other real estate troubles. The Hartford Courant recently reported on a cottage in Ireland in which Dodd has an interest. A new appraisal ordered by Dodd placed its value at $658,000. Problem is, that's roughly three times what Dodd had been listing on his financial disclosure forms. The penalty for filing false financial disclosure forms is $50,000 and up to one year in prison.
Dodd, who already owned a one-third interest in the cottage in Galway, according to Judicial Watch, obtained the remaining two-thirds at a reduced, below-market sales price from an associate of Edward Downe Jr., one William Kessinger.
A Judicial Watch complaint alleges that Dodd helped Downe in 1993 obtain a reduced sentence for violations involving tax and securities laws. Dodd also helped Downe get a full presidential pardon on President Clinton's last day in office.
And, of course, Dodd is famous for inserting into the stimulus package language that in effect exempted executives at the insurance giant AIG from having their bonuses taxed away. He initially denied any knowledge of how it got there.
Later he would acknowledge that he and his staff did in fact change the language in the stimulus bill to include a loophole for AIG executive bonuses. "As many know, the administration was, among others, not happy with the language. They wanted some modifications in it," Dodd said.
Dodd has a problem with both ethics and honesty, and the voters of Connecticut are starting to catch on. He may soon be spending more time at that Irish cottage than he had planned.
Source: Investor's Business Daily