Wednesday, August 15, 2012
WASHINGTON (AP) — A Democratic committee chairman overrode his own subpoena three years ago in an investigation of former subprime mortgage lender Countrywide Financial Corp. to exclude records showing that he, other House members and congressional aides got VIP discounted loans from the company, documents show.
The procedure to keep the names secret was devised by Rep. Edolphus Towns, D-N.Y. In 2003, the 15-term congressman had two loans processed by Countrywide’s VIP section, which was established to give discounts to favored borrowers.
The effort at secrecy was reversed when Towns’ Republican successor as chairman of the House Oversight and Government Reform Committee, California Rep. Darrell Issa, issued a second subpoena. It yielded Countrywide records identifying four current House members, a former member and five staff aides whose loans went through the VIP unit. Towns was on the list.
Towns’ effort to keep the loans secret was at odds with statements by Republicans and Democrats alike that full disclosure of lawmakers’ financial dealings was the best means for keeping the public aware of congressional perks, unethical conduct and fundraising.
Countrywide had been the nation’s largest home loan originator before the housing market collapse. Many of its borrowers were left unable to repay mortgages that, in many cases, required no proof of income or a down payment. The company was purchased in 2008 by Bank of America, which now holds the VIP loan files.
The original Towns subpoena had asked for all files that went through the Countrywide VIP unit and specifically mentioned House members and aides. Bank of America sent a spreadsheet that identified 18,000 files that listed a borrower’s employer, but without names to maintain privacy.
The spreadsheet identified several files listing the House or Congress as the employer. Since the vast majority of the employers in the spreadsheet were of no interest to the committee, committee Republicans — then in the minority — and majority Democrats each drew up a separate list of loan files to be turned over by the bank.
The Republican list totaled 3,000 files and included borrowers listing the House as an employer. Towns narrowed the files to about 300 and excluded references to the House. It was Towns’ truncated list that went to Bank of America.
The Issa committee report confirmed that the VIP section processed a 30-year, $182,972 loan to Towns for a vacation home in Lutz, Fla., and a $194,540, 30-year mortgage for his Brooklyn residence.
Towns still defended his approach when the Oversight Committee met for the first time under Republican control in January 2011. “This is not a super ethics committee and I want to make that very clear,” he said at the public meeting.
The Issa report named:
—Towns, who has consistently denied that he received any special treatment from Countrywide; Rep. Howard “Buck” McKeon, R-Calif.; Rep. Elton Gallegly, R-Calif.; and Former Rep. Tom Campbell, a California Republican.
The report also said Rep. Pete Sessions, R-Texas, the current House GOP campaign chairman, had a loan processed by the VIP section. Sessions’ spokeswoman said he requested that he not be extended any special benefits or treatment from Countrywide, and Issa’s report confirmed the request was granted.