CNN 2012-07-10

 We begin tonight’s "Keeping Them Honest" with allegations that a whole bunch of members of Congress and their staffers got sweetheart deals on personal home mortgages, deals that most Americans had no chance ever getting, that is, unless you knew the right people. A new report out today focuses on allegations that the failed mortgage lender Countrywide Financial gave special treatment to the very senators and congress members and their staffers who were supposed to be regulating them and the rest of the lending industry. Today's report is by the House Oversight 1 Committee, and it details how this guy, Countrywide CEO Angelo Mozilo, oversaw 2 the program giving a lot of people on Capitol Hill this preferential treatment. It was called, fittingly, the Friends of Angelo program. Now, the report today names a string of lawmakers and regulators from both parties, Democrats 5 and Republicans, who benefited from this VIP treatment, Senate Budget Committee Chairman, for instance, Democrat 4 Kent Conrad, former Democratic Senator Chris Dodd, Republican House Armed Services Committee Chairman Buck 6 McKeon. All three, by the way, deny any wrongdoing. The report also says the former CEO of home loan giant Fannie Mae, officials at Freddie Mac and a secretary of housing and urban development were also in this Friends of Angelo program. So were congressional staffers from both parties who played a role in legislation which affected 7 Countrywide. Now, these VIPs, as I said, got favorable mortgage rates and points. One, a Democrat, Edolphus Towns, was a former chairman of the House Oversight Committee, the very same committee investigating Countrywide. He also denies any wrongdoing. Now according to the House report, quote, "Documents and testimony 8 obtained by the committee show the VIP loan program was a tool used by Countrywide to build goodwill 9 with lawmakers and other individuals positioned to benefit the company." The report went on to say that the effort, well, it worked. There's a lot to talk about. Joining me tonight is Congressman 10 Jason Chaffetz, Republican of Utah. So, Congressman, I think a lot people will be very upset to realize that politicians and their staffs were getting these sweetheart deals from a company that was actually lobbying them. In your opinion, did anyone here commit a crime?

 
Well, there was no quid pro 3 quo. We could not directly tie that somebody's vote directly to getting this benefit as the report points out. But, boy, it skirts awfully 11 close. You're given a benefit to something that your friends and neighbors or somebody off the street wouldn't be able to get because they were members of Congress or because they were working for members of Congress.
 
And, what I found amazing in your report is that according to the report, these sweetheart deals basically came about because so many congressional staffers were actually complaining to the Countrywide lobbyists about their own personal loans, and so the lobbyists sort of spent the first 30 minutes of meetings dealing 12 with people's personal complaints. That just seems outrageous 13 to me.
 
It does, particularly when you're on the committees that are charged with maybe tightening 14 up the rules and regulations, because we were dealing with all these bad, you know, loans and whatnot. And these people, they were complaining about them, but then, so they took this program, internal program and they called it Friends of Angelo and decided 15 to go ahead and start helping 16 these people. And it's just wrong. It didn't smell right, didn't look right because it wasn't right.
 
It would be as if I went to interview the, you know, some, the head of Countrywide and I spent the first 30 minutes of the interview or before the cameras are rolling complaining about, you know, my personal mortgage to the guy and then get directed to some program. I would be fired for that.
 
Look, they were put at it - a little bait was put out in front of these people and unfortunately a number of them bit on both sides of the aisle 17. Key, important people, they bit at this stuff. Some claim that, well, they didn't really understand what they were doing, but that doesn't seem like much of a defense 18 to me.
 
Yeah, I mean a lot of the members of Congress claim they never knew they were part of any preferential program. Are they lying? Do you have any proof that they did in fact know they were?
 
Could not directly tie that. You know, this investigation 19 lasted some three years. Again, people on both sides of the aisle. But, you know, this was something you couldn't just pick up the phone or go down to, you know, your local Countrywide representative and get. You could only get it by dealing with the Friends of Angelo. And it seems obvious to me. But, … 
 
Yes, the Senate Budget Committee chairman, Kent Conrad, said to Politico that the Senate Ethics 20 Committee concluded unanimously he didn't receive any sweetheart deal on any transaction. Your report, though, alleges 21 that he did, that he saved something like $20,000 through two preferred loans. So did the Ethics Committee get it wrong in the Senate?
 
Well, the Ethics Committee in general is fairly impotent. Usually, it's … the voters have to deal with this and make these types of decisions. What we could not directly tie was, hey, you got this sweetheart deal in exchange directly for this particular vote or for changing a piece of legislation. We could never directly tie those two together, but you can see what the consequences were. I mean that the taxpayers 22 ended up footing all these bills. And at the same time, some of the key people on Finance and Banking 23 and the key staffers, one term that was used is this person has the pen in hand. That is, they were a staffer that was actually helping to write this piece of legislation. You can understand why when this lobbyist said to the committee this is why this person was targeted, you can see that there was there was an attempt here to influence.
 
The report now concludes that Congress should consider making it illegal for companies to offer discounts or other types of preferential treatment to members of Congress or their staff. I think most people would say that seems like common sense. Do you expect that is actually going to happen, though?
 
Well, it’s, as you said, it's very difficult to legislate 24 common sense. And, look, it is already inappropriate and illegal for a member of Congress to accept something that they wouldn't otherwise be able to get. So I don't understand why the Ethics Committee thinks that there's nothing. Here in the House, I think there's still some outstanding issues. But it was wrong. It doesn't look right, it doesn't smell right because it wasn't right, Anderson. And I'm glad that we did this report and hopefully it sheds more light on the issue.
 
Yeah, I'm glad you did it too. And again as you point out, these folks on both sides of the aisle here, Republicans and Democrats, involved in this. Congressman Chaffetz, I appreciate your time. Thank you.