Between January 1996 and June 2008, Countrywide Financial, the scrapped mortgage arm of Bank of America, exercised its influence by handing out hundreds of discounted VIP loans to key Congressional members, White House employees, Fannie Mae executives, and other high-ranking government officials and staffers. [See: Latest political cartoons]
Traditionally, Countrywide used its VIP Loan program to process loans for company executives and their friends, but a new report from the House Committee on Oversight and Government Reform shows the program was also used to incentivize members of Congress, including former Senate Banking Committee Chairman Christopher Dodd, Senate Budget Committee Chairman Kent Conrad, House Armed Services Committee Chairman Buck McKeon, Former Republican California Rep. Tom Campbell, New York Democrat Rep. Edolphus Towns and California Republican Rep. Elton Gallegly.
"Countrywide's VIP unit processed loans for key senators and Senate staff who could be helpful when legislation that affected the company was drafted or up for a vote," the report explains.
The report reveals Countrywide CEO Angelo Mozilo, along with a number of lobbyists, often connected members of the Senate Committee on Banking and the House Committee on Financial Services to the company's VIP program in California, which handled the company's favored clients.
In some cases, the report says lawmakers and executives saved thousands of dollars on their loans through the program. [Check it Out: Today in Photos From U.S. News & World Report.]
Some of the perks included waived fees and junk charges which could range from $350 to $400.
"The Committee's investigation found Countrywide lobbyists and CEO Angelo Mozilo used discounted loans as a tool to ingratiate itself with policymakers in an effort to benefit the company's business interests," Darrell Issa, Chairman of the House Oversight and Government Reform Committee, said in a release Thursday. "This preferential treatment – that varied depending on the influence of the borrower – was not routinely offered to the public."
The committee's findings are alarming considering Countrywide's major role in subprime lending, a practice that helped lead to the U.S. housing crisis.
Countrywide lobbied fiercely against Congressional attempts to regulate subprime mortgages. The report shows that between 2000 and 2005, Fannie Mae rolled out roughly 70 lobbyists as the Financial Services Committee mulled over reform legislation.
At this point, the Justice Department has not prosecuted any Countrywide official for their involvement with the VIP loan program, but Issa's committee report insists that the company wielded influence far outside the bounds of ethical lobbying.
The report's documents "show that 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."
Members of Congress were not the only ones earning perks.
The report reveals House Financial Services Committee Staff Director Joseph Ventrone and General Counsel Clinton Jones, who worked closely with Fannie Mae during Government Sponsored Enterprise reform, were also enrolled in Countrywide's VIP unit.
The committee report also shows Henry Cisneros and Alphonso Jackson, top officials at the Department of Housing and Urban Development, were also VIP recipients. However, Cisneros's loan was not processed until after he became a part of Countrywide's board of directors.