Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
DOUBLE YOUR DONATION!
We don’t run corporate ads. We don’t shake our readers down for money every month or every quarter like some other sites out there. We provide our site for free to all, but the bandwidth we pay to do so doesn’t come cheap. A generous donor is matching all donations of $100 or more! So please donate now to double your punch!
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.

October 22, 2018
Henry Giroux
Neoliberalism in the Age of Pedagogical Terrorism
Melvin Goodman
Washington’s Latest Cold War Maneuver: Pulling Out of the INF
David Mattson
Basket of Deplorables Revisited: Grizzly Bears at the Mercy of Wyoming
Michelle Renee Matisons
Hurricane War Zone Further Immiserates Florida Panhandle, Panama City
Tom Gill
A Storm is Brewing in Europe: Italy and Its Public Finances Are at the Center of It
Christopher Brauchli
The Liars’ Bench
Gary Leupp
Will Trump Split the World by Endorsing a Bold-Faced Lie?
Michael Howard
The New York Times’ Animal Cruelty Fetish
Alice Slater
Time Out for Nukes!
Geoff Dutton
Yes, Virginia, There are Conspiracies—I Think
Daniel Warner
Davos in the Desert: To Attend or Not, That is Not the Question
Priti Gulati Cox – Stan Cox
Mothers of Exiles: For Many, the Child-Separation Ordeal May Never End
Manuel E. Yepe
Pence v. China: Cold War 2.0 May Have Just Begun
Raouf Halaby
Of Pith Helmets and Sartorial Colonialism
Dan Carey
Aspirational Goals  
Wim Laven
Intentional or Incompetence—Voter Suppression Where We Live
Weekend Edition
October 19, 2018
Friday - Sunday
Jason Hirthler
The Pieties of the Liberal Class
Jeffrey St. Clair
A Day in My Life at CounterPunch
Paul Street
“Male Energy,” Authoritarian Whiteness and Creeping Fascism in the Age of Trump
Nick Pemberton
Reflections on Chomsky’s Voting Strategy: Why The Democratic Party Can’t Be Saved
John Davis
The Last History of the United States
Yigal Bronner
The Road to Khan al-Akhmar
Robert Hunziker
The Negan Syndrome
Andrew Levine
Democrats Ahead: Progressives Beware
Rannie Amiri
There is No “Proxy War” in Yemen
David Rosen
America’s Lost Souls: the 21st Century Lumpen-Proletariat?
Joseph Natoli
The Age of Misrepresentations
Ron Jacobs
History Is Not Kind
John Laforge
White House Radiation: Weakened Regulations Would Save Industry Billions
Ramzy Baroud
The UN ‘Sheriff’: Nikki Haley Elevated Israel, Damaged US Standing
Robert Fantina
Trump, Human Rights and the Middle East
Anthony Pahnke – Jim Goodman
NAFTA 2.0 Will Help Corporations More Than Farmers
Jill Richardson
Identity Crisis: Elizabeth Warren’s Claims Cherokee Heritage
Sam Husseini
The Most Strategic Midterm Race: Elder Challenges Hoyer
Maria Foscarinis – John Tharp
The Criminalization of Homelessness
Robert Fisk
The Story of the Armenian Legion: a Dark Tale of Anger and Revenge
Jacques R. Pauwels
Dinner With Marx in the House of the Swan
Dave Lindorff
US ‘Outrage’ over Slaying of US Residents Depends on the Nation Responsible
Ricardo Vaz
How Many Yemenis is a DC Pundit Worth?
Elliot Sperber
Build More Gardens, Phase out Cars
Chris Gilbert
In the Wake of Nepal’s Incomplete Revolution: Dispatch by a Far-Flung Bolivarian 
Muhammad Othman
Let Us Bray
Gerry Brown
Are Chinese Municipal $6 Trillion (40 Trillion Yuan) Hidden Debts Posing Titanic Risks?
Rev. William Alberts
Judge Kavanaugh’s Defenders Doth Protest Too Much
Ralph Nader
Unmasking Phony Values Campaigns by the Corporatists
FacebookTwitterGoogle+RedditEmail