Sen. Conrad donates money over loan deal
By MARY CLARE JALONICK, Associated Press
Senate Budget Committee Chairman Kent Conrad said Saturday he is donating $10,500 to charity and refinancing his loan on an apartment building after reviewing documents showing he received special treatment from Countrywide Financial Corp.
Conrad said it appears that Countrywide waived 1 point on his mortgage for a Bethany Beach, Del., vacation home. He said he would donate the equivalent amount of money to Habitat for Humanity.
"Although I did not ask for or know that I was receiving a discount, and even though I was offered a competitive loan from another lender, I do not want to have received preferential treatment," the North Dakota Democrat said in a statement.
Conrad said it also appears he was given special treatment on a mortgage when he was financing the purchase of a Bismarck, N.D., apartment building from his brothers. He said he would refinance that loan with another lender.
Conrad, who is also a member of the Senate Finance Committee, said he reviewed Countrywide e-mails described to him by the media after it was reported that he and Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, got preferential treatment on their mortgages.
Their involvement in a special program that awarded discounts and waived fees for "friends" of Countrywide CEO Angelo Mozilo was first reported by Conde Nast Portfolio magazine's Web site.
Conrad said Friday that he had placed a personal call to Mozilo in 2002 seeking a mortgage for the Delaware home. But he said Countrywide's rates were competitive with another offer he received.
"I called (Mozilo). I said, 'I'm buying this property. Would you be interested in the mortgage?' And he said, 'Yeah. Call these people and we'll take a look,'" Conrad said.
"I did not think for one moment and no one ever suggested to me that I was getting preferential treatment," Conrad said.
Dodd, one of four Senate Democrats who pursued his party's 2008 presidential nomination, has been a a leader of Congress' efforts to help homeowners caught in the subprime mortgage meltdown and once called Countrywide's practices "abusive." Dodd also says he wasn't aware he was getting a special deal.
The disclosures come just days after similar revelations about former Fannie Mae CEO Jim Johnson prompted Barack Obama, the presumptive Democratic nominee, to ax Johnson from his vice presidential vetting team.
Conrad said it was his friend Johnson who referred him to Mozilo, who reportedly instructed an employee to give Conrad a discount on his interest rate on a $1.07 million loan when he was refinancing the Delaware vacation home in 2004.
Countrywide also made an exception in lending Conrad $96,000 in 2004 to buy an eight-unit apartment building in Bismarck from his brothers. The company had a policy of only providing loans for buildings of four units or fewer.
"They said they frequently made exceptions, especially for good customers," Conrad said.
An internal e-mail from Mozilo, however, said the exception was "due to the fact that the borrower is a senator," according to the Portfolio report.
The magazine said other participants in the company's VIP program included former Secretary of Housing and Urban Development Alphonso Jackson, former Secretary of Health and Human Services Donna Shalala, and former U.N. ambassador and assistant Secretary of State Richard Holbrooke.
In a statement Friday, Countrywide did not address questions about the VIP program, citing customer privacy.
Mozilo received compensation worth more than $22.1 million and cashed $121.5 million in stock options in 2007, while Countrywide posted a loss of over $700 million and saw its stock plummet 80 percent. The company agreed in January to be acquired by Bank of America Corp. for $4.1 billion in stock.
Countrywide has come under fire for its lending practices, including providing mortgages with low initial "teaser" rates that balloon higher than borrowers can afford.
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I'd love some opinions about whether or not this will keep Dodd from getting a cabinet post. I think it hurts his chances but is not such a big deal, if Obama wants him, if he's elected Dodd will get a position. Though we might see less of Dodd on the campaign trail than originally expected.
If Jim Johnson's resignation is any indication, Obama seems to want to keep things pretty clean. That will be a huge advantage over McCain.
Yanking Dodd out of the Senate makes it harder to reach a filibuster-proof majority. That mitigates against Biden...and Hillary, if she ever had a chance to work for Obama.
Correct you are Llama, I hadn't even realized Conn has an R governor. Sorry Mr. Dodd but we appreciate your campaign work but don't expect to be going anywhere. Clinton and Biden are both safe choices for cabinet positions with D governors in their states. Also while the Dems probably won't reach a filibuster majority the smaller the gap the fewer R's they have to swing on any given issue.
I'm not sure I see Hillary taking a chair in Obama's cabinet, at this point. What job would equal the power of a Senator? Even the Secretary of State is pretty much a gofer.
Not so Llama, Secretaries can have a lot of power. There are a lot of choices made by Secretaries and they control the budgets allotted them. They can do a lot of stuff and oftentimes don't even have that much oversight on what they're doing. Trust me a major secretarial posting is A LOT stronger than a run of the mill middle seniority Senator. Hell, Biden is making overtures about wanting to be the Secretary of State and he's a powerhouse in the Senate right now. It all depends on how incompetent and/or how trusting a president is. If a president trusts his cabinet members to deal with the day to day nitty-gritty that will be good for them as they will have more time to focus on the macro-issues and the big bills.
I think a lot depends on what Senator Dodd dose to make retribution for his inappropriate action. After all, there’s not that much difference between Senator Dodd and Senator McCain, when McCain was in business with his old buddy Charles Keating and the home loan scandal during the 80’s.
Not with Obama. He has already made very clear that ALL major decisions -- for the campaign, for the party, for the presidency -- will be firmly in his hands. Even his Secretary of State is going to have only a minor impact on policy.
Dodd didn't do anything inappropriate.
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