Dodd and Conrad: The Appearance Of Impropriety

Both Connecticut’s Chris Dodd and North Dakota’s Kent Conrad steadfastly deny any knowledge or fact of preferential treatment in their real estate loans from Countrywide Mortgage, but the fact the story keeps hanging around is disquieting. And apparently it has been doing quite a bit more than hanging around, there have been hearings and testimony. From MSNBC:

Despite their denials, influential Democratic Sens. Kent Conrad and Chris Dodd were told from the start they were getting VIP mortgage discounts from one of the nation’s largest lenders, the official who handled their loans has told Congress in secret testimony.

The next day, Feinberg testified before the Senate Ethics Committee, an indication the panel is actively investigating two of the chamber’s more powerful members

Both senators were VIP borrowers in the program known as "friends" of Angelo. Angelo Mozilo was chief executive of Countrywide, which played a big part in the foreclosure crisis triggered by defaults on subprime loans. The Calabasas, Calif.-based company was bought last July by Bank of America Corp. for about $2.5 billion.

Countrywide VIPs, Feinberg told the committees, received discounts on rates, fees and points. Dodd received 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 offer.

Two internal Countrywide documents in Dodd’s case and one in Conrad’s appear to contradict their statements about what they knew about their VIP loans.

First off, let’s be clear, there has been no finding of wrongdoing as to either Dodd or Conrad. Secondly, even if it were to be all true, it does not look like the benefits were particularly valuable monetarily. Still, it is tiring seeing the constant privileged status our elected officials in Washington claim for themselves.

These are two critical Senators for the Democratic majority, and here we are in the biggest legislative struggle perhaps in decades over healthcare reform talking about their ethical propriety. It is not helpful. I don’t care if the two Senators’ gain was penny ante in the long run, it is the fact they were brazen enough to think it okay to take a little cut. Because as members of the "world’s greatest deliberative body" they from all appearances simply felt entitled. Like Kobe Bryant and Ben Roethlisberger, even if they are totally innocent, the mere fact that they allowed themselves to be placed in such a position speaks ill.

It has, at a minimum, the appearance of impropriety and, right now, that is too much.


  1. plunger says:

    If there were no men and women of suspect moral character and high ambition, subject to extortion and blackmail, there would be no Congress.

    It’s not a bug, it’s a feature…as proven daily.

    • chetnolian says:

      Sadly true of all democracies; we’ve just had a vast expenses row over our Members of Parliament here in the UK, the worst feature of which was the sheer pettiness, born of a sense of entitlement, of many of them.

  2. bobschacht says:

    This is a sad situation for me, in that for a time, Chris Dodd was my preference as the Democratic nominee. He seemed to care more about the Constitution than any of the other candidates. During the Iowa primary, it really did seem like his new Iowa home was, in fact, the family’s principal residence. But that only lasted for at most 2 months.

    Bob in HI

    • fatster says:

      and Mary @ 12. I agree. And I must confess that my support for him was also greatly influenced by his father’s role at Nuremberg.

  3. 1970cs says:

    Between this Contrywide loan and Dodd being chairman of the banking committee he is in trouble for 2010 here in CT, people are pissed. I think he is in for a tough fight with Rob Simmons with the majority here being Independent.

  4. fatster says:

    O/T: Home-grown.

    Anti-terror agents arrest seven in Raleigh

    Posted: Today at 4:41 p.m. 
Updated: 3 minutes ago
    RALEIGH, N.C. — “Officials arrested seven residents of North Carolina Monday on charges they supported terrorism by recruiting people to fight overseas.”


  5. readerOfTeaLeaves says:

    First off, let’s be clear, there has been no finding of wrongdoing as to either Dodd or Conrad. … Still, it is tiring seeing the constant privileged status our elected officials in Washington claim for themselves.

    Yes, it’s disgusting and given the way the Blue Dogs seem to be screwing up any ability for the Dems to move legislation that isn’t hamstrung by ‘compromise’, it’s infuriating.

    I gape in slack-jawed bemusement and contempt at the reports of C Street, which is really starting to look like a whorehouse subsidized by a religious-economic consortium of very well-heeled operatives in order to move forward some kind of military-economic global dominance agenda.

    With the GOP now revealing themselves as a pack of whoremongering jackasses (who stoop at nothing, including asking mommy and daddy to pay off the mistress!) the Dems just need to be able to walk, talk, and move legislation to look competent.

    The GOP is going to be rooting around for dirt on Dems with a frenzied desperation that will probably be both relentless and reckless. Although most Americans can distinguish between hookers and mortgages, this is one more sad tale that makes clear the electeds are not taking charge; they’re trying to cover their asses while they curry for the favor of ruthless, predatory interests.

    Beyond irritating.

    • Hmmm says:

      Welp I could well be totally wrong, but that was exactly how I took the Dodd/Conrad news, that this must be a GOP operation. I.e. CW extends the improper offer years ago, and now that their R operative friends need to weaken the Ds, they dig it out of KKKarl’s file use it against them. So yes, this makes Dodd/Conrad look corrupt whether they are or not, and in any event it makes them look not particularly canny in terms of ability to recognize a trap when they see it. But on the other hand, if this really is an op, then the Rs must be starting to run out of other options, i.e. playing dirty tricks, entering dead-ender territory, out of gas, fizzling, etc.

  6. readerOfTeaLeaves says:

    OT, but I saw a news item saying that Howard Dean will step in for Keith Olbermann Tues and Wed. (Hey, maybe we’ll get to hear some sane talk about health care! Here’s hoping Dodd, Conrad, and the rest of the Dems tune in to listen to Dr. Dean — especially hot on the heels of several thousand people getting free medical care in animal stalls in a county fairground in Virginia.)

    I doubt any of those people at the fairgrounds got special deals from Mozila.

    OTOH, they probably would not get GOP C Street perks either: like help paying off their mistresses or free travel to lands controlled by authoritarian dictators.

    Now I must excuse myself to go off and ‘eat cake‘, as I’m sure our modern Marie Antoinette’s figure my time commenting on this blog is an impediment to their ability to wring tax revenues out of me.


    • Hmmm says:

      This will not stand. The danger now is that they ram it through that way before the break. Dirty rotten fucking fuckers.

  7. alinaustex says:

    Or Dodd & Conrad wanted their very own ‘turn at the till ” , A pox on all corrupted politicians – we need public financing of campaigns -make it voluntary like Arizona ’s statue – thatway we get around the free speech canard ,,,if these two Senators are dirty let the chips fall where they may -same goes for Murtha …

  8. TarheelDem says:

    What we have in the Democratic Party is a singular lack of primary challengers who could prevent loss of a seat.

    The contradiction of seniority; it gives power to do things, but those who finally achieve it want to do things to help themselves personally.

  9. orionATL says:

    forgive the OT to this fine essay by bmaz,

    but i’ve been waiting for an “inconsistency” such as the following to show up.

    i have suspected that the police behavior in this incident involved a verbal “throw down”, i.e.- sarg’s post hoc report justifying his behavior.

    the transcript of the 911 call to the cambridge police has been released…..ted=print.

    the caller makes no reference to race at all.


    in his report, the infinitely whiney, because, don’t you see, he was infinitely wronged, sarg wrote:

    [the arresting officer, Sgt. James M. Crowley, said she [ms. whalen] told him she had seen “what appeared to be two black males with backpacks” on the porch of the home.

    Police officials have stood by the report in interviews, but on Monday, Ms. Whalen’s lawyer said she had never mentioned race to Sergeant Crowley.

    “She didn’t speak to Sergeant Crowley at the scene except to say, ‘I’m the one who called,’ ” said the lawyer, Wendy J. Murphy. “And he said, ‘Wait right there,’ and walked into the house. She never used the word black and never said the word backpacks to anyone.”]

    a severe injustice against a citizen was perpetrated in this matter, and, contrary to popular belief, it probably had little to do with race

    but a lot to do with an arrogant policeman misusing the powers granted him by society for his own personal satisfaction.

    again, apologies, for the interruption, but this kind of OFFICIAL behavior gets me hot – real hot.

  10. joanneleon says:

    Since our congressfolk and senators have to maintain two residences, I don’t really have a problem with them being able to declare both of them primary residences. In fact, if it isn’t kosher to do that right now, I think they should be able to.

    That said, I don’t think anyone should qualify for a special deal as part of a friends of the CEO program, particularly not somebody who is going to vote on issues that affect that company and industry. It’s not much different than receiving a gift, is it?

    • SparklestheIguana says:

      Well, they don’t have to maintain two full-sized residences, with mortgages. Note all the hypersexed renters at “C Street”, and note the bachelorious living arrangements of Chuck Schumer and Senator Barack Obama and others. Apartments can be rented.

  11. PJEvans says:

    Give some of the stories I’ve heard about Countrywide, how its execs expected to be treated (like royalty) and how its (contract) security guards were treated (like sh*t, with multiple and conflicting rules for everything), I’d bet that Mozilo never really bothered to pass the details about his program at the times he said he did. He apparently figured he owned everyone, and they’d do whatever he wanted, when he wanted, because he wanted.

  12. allan says:

    Wildly OT, but this is the place for document dump readers, right?

    Chrysler Destroys Its Historical Archives; GM to Follow?

    Chrysler was incorporated on June 6, 1925. Over the following decades, the automaker centralized and organized its archives, records dating back to the very beginnings of the American automobile industry. And then the company’s new owners decided history is bunk. Cerberus eliminated its archivist position. They stopped funding the documents’ maintenance. The company limited access to their archives and then stopped it altogether.

    Worse was to follow.

  13. SparklestheIguana says:

    On the one hand, as someone trying to buy a home or refinance a loan, you’re always trying to finagle the deal, or get it sweetened somehow. You want the absolute best terms. On the other hand, as a politician you need to be hyperconscious of how it looks. I don’t find these two cases as egregious as Geithner’s illegal tax deductions, but they stink all the same.

  14. cinnamonape says:

    OT But some interesting stuff with regards to the Union Banque Suisse scandal. Apparently the US has scaled ck its demands to see all 48,000 US accounts…they now only want to review the l0,000 or so with accounts holding more than $50,000. Hmm. So you can evade taxes on up to $50 grand??? Hillary is meeting with the Swiss Foreign Minister to “chat”.


    Then there’s been a cut-off on certain types of rapid switch-over hedge funds by UBS in the US.

    UBS has fired several of those involved in the situation, but are ingratiating themselves with the big Yankee financial services…..MBqZP7grds">Merrill-Lynch, Morgan Stanley, and others.

    • readerOfTeaLeaves says:

      Interesting. Particularly cutting off certain kinds of hedge funds. And particularly now.

      The banksters seem to think they’re untouchable.
      We shall see. This had better not be a false promise of hope, given the recent bailouts.

      Looks like the banksters and hedgies are doing some pre-spin on the CDO front. But all of this mess still rubs off on Dodd.

  15. SparklestheIguana says:

    Here is a most interesting article about Jackie Clegg Dodd (Mrs. Dodd) and her appointments to several boards, for which she is handsomely compensated. The article wonders whether she is qualified to serve on those boards (particularly on the Audit Committees, as those positions have become more complex since Sarbanes Oxley), and whether her corporate directorships are due to being married to a certain Senator.…..ory?page=1

    And, an article about the Dodds’ Irish cottage:…..ory?page=1

  16. SparklestheIguana says:

    Good article about bloggers:

    “The idea that our work is parasitical is farcical,” Wheeler told me by phone. “There’s a lot of good, original work in the blogosphere. Half of all journalists look at the blogosphere when working on a story.”

  17. joejoejoe says:

    You can get VIP service at a car wash, a dry cleaner, a landscaper so I believe Dodd and Conrad when they say that they didn’t know they were getting any special treatment beyond what other wealthy professionals would get. That said, it’s incredibly stupid for politicians to take these tiny perks when they are in the national spotlight. Dodd ran for President, heads an important committee, is a real player in policy games that involve a trillion dollars or more. He’s compromised himself by not doing his due diligence about a deal involving a few thousand dollars. It shows weak thinking on his part.

    • bmaz says:

      That was kind of my reaction completely. I have always liked Dodd, and he is a key voice at a key time, for him to even be mentioned in this penny ante crap is really disappointing. And he should know better with all of his historical involvement with financial sector issues.

  18. DeadLast says:

    “…it does not look like the benefits were particularly valuable monetarily…”

    $1000 per month over 30 years is a big benefit, at least to most Americans. One reason campaign contributions are limited to a paltry $2,500 per cycle is because it is not “particularly valuable monetarily.” Yet that is how our country is being stolen…

  19. Hugh says:

    I feel ashamed that I ever thought Dodd Presidential material. His chairmanship of the Finance committee and his understanding of the financial crisis have been pathetic. Then there was this mindless, boneheaded gimme that he received from Mozilo. And the last straw was seeing him last week defending the ridiculous gold-plated F-22 as a jobs program.

  20. Mason says:

    Just a thought, but the Board of Directors of any corporation have a fiduciary duty to the shareholders, which in Countrywide’s case, would include an oversight responsibility to review the Treasurer’s financial reports. Seems to me that preferential treatment in the form of discounted mortgage loans to customers categorized as “Friends of the CEO” would be a difficult secret to keep within the organization. I don’t know who did their accounting, but if they had an outside firm auditing the books, I think they should have spotted some red flags and informed the Treasurer setting up a potential conflict between the Treasurer and the CEO that board members would have discovered because the Treasurer probably would have told them to get their backing in a conflict with the CEO.

    The board should have discovered and stopped the CEO’s program in its tracks to protect the shareholder’s interest in maximizing profits.

    I’ve probably demonstrated my lack of knowledge of corporate law and naivete with my post, but hey! You only go round once, so you have to grab all the gusto you can get, right?

    Postscript: I wonder if Dodd even knew he was getting preferential treatment. Could this have been an after-the-fact mischaracterization of the loan for political purposes?

  21. Hmmm says:

    (Sorry for the crosspost just upstairs) — Large Orange has some data backing up an assertion that Dodd received market rate on his Countrywilde mortgage, not a preferential rate. Also, who the hell is leaking the closed-door hearing testimony in the first place? Is that attack of a piece with the Craig attack? Kristol is calling for all-out attacks on the administration and their helpers at the moment.

    • PJEvans says:

      I seem to recall seeing that Dodd’s was actually a fairly standard deal, sometime earlier this year or late last year, when this first came up.

      • bmaz says:

        Well there seems to be evidence to the contrary on the record now. Is that evidence conclusive or dispositive, of course not. They may be completely innocent. Or not. Who know. My beef is that two key seasoned Senators put themselves in the position to be questioned to start with. The appearance of impropriety. Same with Harry Reid who has analogous (but not identical) issues in Nevada.

        • PJEvans says:

          Apparently Dodd signed up for a mortgage, but didn’t put in for a locked-in rate, and came out ahead when it dropped between the time he applied, in April, and when it went through, in June. The change was from 4.875 to 4.25 percent, which were the going rates. The report (link from the update at the Orange One) is pretty clear on this.

          (This is pretty much what I remember seeing before.)

          • bmaz says:

            Does not explain what Dodd was doing claiming two primary residences or why with such supposedly great credit he felt it necessary to take out bottom of the barrel “liar loans” from a subprime lender and to get “VIP” treatment in the process. Quite frankly, I am not real sympathetic to Dodd, he has been sucking up to the financial industry too long. He of all people should not be in this position.