Friends of Angelo Investigation Goes Dark

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EDITOR’S NOTE: In a scheme this blatantly disregarding law and common sense and a scheme that was so large as to constitute the largest economic crime in human history, it is unlikely that the “friends of Angela are limited to what we know now. My guess is that the list grew longer and longer and touched more and more people that were given “gifts” of preferential mortgage treatment, including reductions of principal. 

That the scheme went suddenly dark is usually a sign that some of these unknown people used their power and influence to kill the investigation or, unlikely, that indictments are near.

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VIP MORTGAGE PROGRAM INVESTIGATION GOES DARK

by Jon Prior

An investigation by Rep. Darrell Issa, R-Calif., into the Countrywide VIP loan program that allegedly gave connected policymakers in Washington sweetened mortgages has become increasingly hushed in recent weeks.

The “Friends of Angelo” investigation has been waged over three years now. Previous subpoenaed information from members of Congress went to ethics committees in both chambers. But Sens. Kent Conrad, D-N.D., and former Sen. Christopher Dodd, D-Conn., were cleared by the committees of knowingly taking any such loans from Countrywide. Rep. Edolphus Towns, D-N.Y., denied any wrongdoing as well.

“We’re beyond ethics here,” Issa said during House oversight committee hearing September 2009 chaired by Cummings. “We are at a point where the American people at least should know who they gave money to or benefit to, how they did it, and so on.”

Frustrated with a lack of action from the committee — chaired by Towns at the time — Issa requested the panel hold hearings on the allegations rather than deferring to the ethics committee.

In February, as committee chair, Issa issued a subpoena for documents, emails and other information from Bank of America (BAC: 7.07 +1.58%), which bought Countrywide in 2008, regarding past dealings with members of Congress.

But in December, Issa went to the ethics committee with his findings and did not publicly disclose the names of the four lawmakers he found to be allegedly linked to the VIP program. Two Republicans from California, Reps. Howard McKeon and Elton Gallegly, acknowledged being two of the four Issa mentioned to the ethics committee.

No hearings have been scheduled over the findings, and Democrats claim the discovery of Republican links to the program prompted less public proceedings. But a spokesman for the committee said recent revelations have not altered the course of the investigation at all. With a Republican majority in the House, Issa as the committee’s chair can issue subpoenas and conduct interviews on his own accord, the spokesman said, changing the dynamic from when Issa needed to publicly call on members to move the investigation forward.

A spokesperson for McKeon said in a statement that McKeon was “shocked and angry to hear this” and denied ever meeting or speaking to former Countrywide CEO Angelo Mozilo.

In a letter to Issa Tuesday, Rep. Elijah Cummings, D-Md., reversed his earlier stances on the matter and called for more public disclosures from the investigation, even revealing some details from the subpoena. Documents gathered from the investigation show communications between Countrywide executives Stephen Brandt and Maritza Cruz as they prepared McKeon’s documents. Both Cruz’s and McKeon’s signatures are on the documents, according to Cummings.

Cummings also revealed an internal email at Countrywide from Brandt that alleges Mozilo’s role in approving McKeon’s loan.

“Per Angelo — ‘take off 1 point, no garbage fees, approve the loan and make it a no doc,'” Brandt wrote to staff, according to Cummings’ letter.

In the letter, the Maryland representative also said evidence from the subpoenas show Mike Farrell, a former lobbyist for the Mortgage Bankers Association, directed McKeon to the Countrywide VIP program.

A spokesperson for McKeon issued the following statement in response to Cummings’ letter: “Mr. McKeon is committed to transparency on this — he believes that the actions of Countrywide should be looked into and wants to get to the bottom of what Countrywide did to his loan

Write to Jon Prior.

Follow him on Twitter @JonAPrior.

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