Countrywide had a program in place to give politicians special treatment on their home loans to influence them. The scandal has damaged the reputations of prominent Democrats including former Senator Chris Dodd.
The Ventura County Star reports:
The Countrywide VIP program in question was known as "Friends of Angelo," a reference to Angelo Mozilo, the lender's chief executive, whom federal regulators say personally approved mortgages for favored borrowers in violation of lending standards. Mozilo agreed in 2010 to pay more than $67 million in penalties in a settlement with the Securities and Exchange Commission.
Wikipedia links to more resources on the Friends of Angelo program.
Recently the Republican controlled House Government Reform Committee added two local new names to the list of legislators that were a part of the program. Elton Gallegly and Buck McKeon received special treatment according to records from Countrywide.
For McKeon it allegedly included:
McKeon is known to have received a Countrywide mortgage for $315,000, and Mozilo instructed the individual handling his loan to "take off 1 point, no garbage fees, approve the loan and make it a no doc," according to documents reviewed by Cummings.
For Gallegly I haven't seen what supposed benefit he received. The released documents don't mention if it was a reduction in fees, a lower interest rate, or a no document loan.
Both Gallegly and McKeon deny knowing they were given any special treatment. From the latest article:
Gallegly and McKeon, whose newly redrawn congressional district takes in part of Simi Valley, said they had no idea their loans were processed under the VIP program but that they are cooperating with the investigation.
What I find interesting is that a program that has been documented to influence legislators was allegedly unknown to those same legislators. To be blunt: how effective can a payoff be if the target doesn't know they are getting the money?
I am looking forward to learning more about what happened and which legislators from both parties were involved.
Neither Gallegly or McKeon have been proven to have done anything wrong. The House Ethics Committee will be investigating this case.
Both of them should return all donations from Angelo Mozilo and any PAC money connected directly to this issue.
Also, Democrats would be better off if Rep. Laura Richardson was no longer in Congress.