FacebookTwitterGoogle+RedditEmail

The Charmed Life of a Subprime King

The former Countrywide Financial chief is back in the news. You remember, the subprime king with the perma-tan?

When I saw his name in the headlines again I hoped to finally find news of a criminal indictment. Steal a Snickers bar from the 7-11 and you could face jail time. Angelo Mozilo took half a billion dollars in compensation for loans that blew up our economy. And so far, he’s gotten off virtually scott free.

The Securities and Exchange Commission did bring a civil suit, accusing Mozilo of engaging in fraud and insider trading to conceal signs of the coming housing crash. He flicked that away with a cash settlement that made nary a dent in his personal fortune.

The new dirt on Mozilo looked promising. According to a Congressional investigative report, he created a “Friends of Angelo” unit, which doled out discount loans to members of Congress who had the power to rein in his risky business.

The report is the outcome of a four-year investigation prompted by Wall Street Journal and Portfolio magazine stories in 2008 that exposed Countrywide VIP loans to several Democratic members of Congress. Republican Congressman Darrell Issa, Chair of the House Oversight and Government Reform Committee, jumped on the case. He subpoenaed Bank of America, which had taken over the failed subprime lender, for all loan documents related to members of Congress and other officials.

What did he find? The report alleges that Angelo Mozilo intervened personally to set special discount terms on loans for several members and staff of the key committees with jurisdiction over the mortgage industry — the Senate Committee on Banking and the House Committee on Financial Services.

Among those who allegedly took advantage of the discounts are former Senator Chris Dodd (D-Conn.), Senator Kent Conrad (D-N.D.), Rep. Howard P. “Buck” McKeon (R-Calif.), Rep. Elton Gallegly (R-Calif.) and Rep. Edolphus Towns (D-N.Y.).

So what did these VIPs get? The perks typically included a half-point discount on interest rates and a waiver of junk fees. While the report doesn’t attempt to estimate the value of the discounts, simple math indicates they could easily have run into the tens of thousands of dollars. This would certainly be more than the value of a round of golf, an example the House Ethics gift rules cite as a big no-no.

The report also alleges that Mozilo guaranteed loan terms and approvals for VIP clients before they even filled out applications. With regard to Rep. Towns, they claim that Countrywide “ignored Towns’ low credit score in order to process his loan quickly.” When Senator Conrad, the current Chair of the Senate Committee on Banking, applied for a $1.16 million loan in 2002, documents show that Mozilo instructed an employee to “take off 1 point, no extra fees and approve the loan — if any problem, advise Angelo asap.”

So is this the smoking gun? The report states that under U.S. law, “whoever directly or indirectly, corruptly gives, offers or promises anything of value to any public official … with intent to influence an official act” shall be fined, imprisoned or both.

That sounds pretty strong. But then it goes on to say,

“Angelo Mozilo and Countrywide’s lobbyists may have skirted the federal bribery statute by keeping conversations about discounts and other forms of preferential treatment internal. Rather than making quid pro quo arrangements with lawmakers and staff, Countrywide used the VIP loan program to cast a wide net of influence.”

So once again, Mozilo may very well brush off the latest bit of annoying publicity and walk away unscathed.

Sarah Anderson directs the Global Economy Project of the Institute for Policy Studies.

This column is distributed by OtherWords.

COMING SOON: 
The CounterPunch Online Auction

Featuring paintings, photographs, curios, oddities and objets d’art, donated by Alexander Cockburn, Jeffrey St. Clair, Noam Chomsky, Ralph Nader, Tom Tomorrow, Margot Kidder, Tao Ruspoli, elin Slavic o’hara, Anthony Papa, Shephard Fairey, Rob Urie, Paul Craig Roberts and many others!!

More articles by:

Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies.

August 20, 2018
Carl Boggs
The Road to Disaster?
James Munson
“Not With a Bomb, But a Whimper” … Then More Bombs.
Jonathan Cook
Corbyn’s Labour Party is Being Made to Fail –By Design
Robert Fisk
A US Trade War With Turkey Over a Pastor? Don’t Believe It
Howard Lisnoff
The Mass Media’s Outrage at Trump: Why the Surprise?
Faisal Khan
A British Muslim’s Perspective on the Burkha Debate
Andrew Kahn
Inhumanity Above the Clouds
Dan Glazebrook
Trump’s New Financial War on the Global South
George Wuerthner
Why the Gallatin Range Deserves Protection
Ted Rall
Is Trump a Brand-New Weird Existential Threat? No.
Sheldon Richman
For the Love of Reason
Susie Day
Why Pundits Scare Me
Dean Baker
Does France’s Economy Need to Be Renewed?
Jeffrey St. Clair
A Mighty Voice for Peace Has Gone Silent: Uri Avnery, 1923-2018
Weekend Edition
August 17, 2018
Friday - Sunday
Daniel Wolff
The Aretha Dialogue
Nick Pemberton
Donald Trump and the Rise of Patriotism 
Joseph Natoli
First Amendment Rights and the Court of Popular Opinion
Andrew Levine
Midterms 2018: What’s There to Hope For?
Robert Hunziker
Hothouse Earth
Jeffrey St. Clair
Roaming Charges: Running Out of Fools
Ajamu Baraka
Opposing Bipartisan Warmongering is Defending Human Rights of the Poor and Working Class
Paul Street
Corporate Media: the Enemy of the People
David Macaray
Trump and the Sex Tape
CJ Hopkins
Where Have All the Nazis Gone?
Daniel Falcone
The Future of NATO: an Interview With Richard Falk
Cesar Chelala
The Historic Responsibility of the Catholic Church
Ron Jacobs
The Barbarism of US Immigration Policy
Kenneth Surin
In Shanghai
William Camacaro - Frederick B. Mills
The Military Option Against Venezuela in the “Year of the Americas”
Nancy Kurshan
The Whole World Was Watching: Chicago ’68, Revisited
Robert Fantina
Yemeni and Palestinian Children
Alexandra Isfahani-Hammond
Orcas and Other-Than-Human Grief
Shoshana Fine – Thomas Lindemann
Migrants Deaths: European Democracies and the Right to Not Protect?
Paul Edwards
Totally Irrusianal
Thomas Knapp
Murphy’s Law: Big Tech Must Serve as Censorship Subcontractors
Mark Ashwill
More Demons Unleashed After Fulbright University Vietnam Official Drops Rhetorical Bombshells
Ralph Nader
Going Fundamental Eludes Congressional Progressives
Hans-Armin Ohlmann
My Longest Day: How World War II Ended for My Family
Matthew Funke
The Nordic Countries Aren’t Socialist
Daniel Warner
Tiger Woods, Donald Trump and Crime and Punishment
Dave Lindorff
Mainstream Media Hypocrisy on Display
Jeff Cohen
Democrats Gather in Chicago: Elite Party or Party of the People?
Victor Grossman
Stand Up With New Hope in Germany?
Christopher Brauchli
A Family Affair
Jill Richardson
Profiting From Poison
FacebookTwitterGoogle+RedditEmail