Crony capitalism, Countrywide and Congress

According to Mr. Issa, there was a very simple motivation behind the program: To build “good will” with power brokers on Capitol Hill and cast a “wide net of influence” in order to gain favorable treatment in return from Congress. It worked.

“Crony capitalism” has become a popular buzz phrase when speaking of the bailouts as American taxpayers struggle to make sense of the corrupt relationships that led to the financial crisis.

If you want to know precisely what this phrase means and how it works, just read a blistering new report from Rep. Darrell E. Issa, California Republican, and his House Committee on Oversight and Government Reform, titled, “How Countrywide Used Its VIP Program to Influence Washington Policymakers.”

The report, released earlier this month, provides strong evidence that former Sen. Chris Dodd, Connecticut Democrat, who once was chairman of the powerful Senate Banking and Finance Committee, and current Sen. Kent Conrad, North Dakota Democrat, must have known they were receiving special treatment from Countrywide Financial in the form of sweetheart mortgage deals. The report also “outs” other members of Congress who received special treatment from the mortgage-lending giant in a scandal that emerged back in 2008.

“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,” Mr. Issa said in announcing the report, which documents 29 VIP loans to 12 members of Congress and congressional staff.


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