The Joplin Globe, Joplin, MO

Opinion

July 12, 2012

Our View: Legalized bribery

If there’s a difference between bribery and what Countrywide did in the decade leading up to the housing crisis, we can’t see it.

Countrywide’s lending practices helped bring on the economic downturn, and all the while that the company was making these subprime (risky) loans, it offered other loans at discounted rates and waived fees to key people in Washington who were in a position to help Countrywide and its allies.

Former Senate Banking Committee Chairman Christopher Dodd, D-Conn., got a low-interest loan. So did Senate Budget Committee Chairman Kent Conrad, D-N.D., and former Housing and Urban Development secretaries Alphonso Jackson and Henry Cisneros; and former Health and Human Services Secretary Donna Shalala.

According to a new U.S. House of Representatives investigative report, the discounted VIP loans began in January 1996 and continued through June 2008, when the company was acquired by Bank of America. These sweetheart deals were not just aimed at gaining influence for the company itself, but were made also to benefit Fannie Mae. According to reports, Countrywide’s business depended largely on Fannie Mae, which was responsible for buying a large volume of Countrywide’s loans, including the subprime loans. At the time that Countrywide was buying its influence — legally — Fannie Mae was trying to fend off more government regulation.  

“Documents and testimony obtained by the committee show the VIP loan program was a tool used by Countrywide to build goodwill with lawmakers and other individuals positioned to benefit the company,” the report said. “In the years that led up to the 2007 housing market decline, Countrywide VIPs were positioned to affect dozens of pieces of legislation that would have reformed Fannie” and its rival Freddie Mac, the committee said.

Some of the discounts were ordered personally by former Countrywide Chief Executive Officer Angelo Mozilo.

“These relationships helped Mozilo increase his own company’s profits while dumping the risk of bad loans on taxpayers,” the report said.

In short, Countrywide used its influence to buy regulators, legislators and others at the expense of the American people.

Five years later, there have been no criminal prosecutions. Not one banker or official with this or other companies has gone to jail, although some have paid fines and been banned from working in the industry again. That was hardly a punishment, given that they escaped with millions. Some of these compliant members of Congress quietly retired, but others have been re-elected. That’s because all of this is legal. Therein lies the heart of the scandal.

Nothing has fundamentally changed between Washington and Wall Street, so expect more of the same in years to come.

“Countrywide’s effort to build goodwill on Capitol Hill worked,” the report concluded.

Yes, but for whom?

1
Text Only
Opinion
  • Our View.jpg Our View: Lone holdout

    Missouri continues to be the only state in the United States that won’t allow a prescription drug database to be established.

    July 22, 2014 1 Photo

  • Anson Burlingame, guest columnist: Much has changed in U.S. over 14 years

    Does anyone recall the major economic argument during the 2000 presidential campaign between George Bush and Al Gore?

    July 22, 2014

  • Our View: Vote no on Amendment 1

    Proponents of Amendment 1 — the Right to Farm Act — have not made their case. We’ve met with advocates of this amendment to the Missouri constitution and listened to their arguments, but we don’t believe they have adequately answered the central question: Who is it protecting, and from what?

    July 13, 2014

  • Your View: Amendment 5 is deception of the highest order

    Amendment 5, sponsored by Missouri Sen. Kurt Schaefer, R-Columbia, “relating to the right of Missouri citizens to keep and bear arms” provides that “any restriction on these rights shall be subject to strict scrutiny.”

    July 21, 2014

  • Other Views Other Views: No time to turn away

    With the shooting down of a commercial airliner over Ukraine and fighting that has now escalated to a ground war between Israel and Hamas in Gaza, it would be easy for most U.S. citizens to throw up their hands and turn their backs.

    July 21, 2014 1 Photo

  • Your View: Power to defend

    The Globe’s editorial ‘More guns not the answer’ (July 15) was saturated with classic progressive blather.

    July 21, 2014

  • Your View: Thanks for the generosity

    Generally, all we hear about is the bad news, and obviously, there is plenty available. Our church felt this event worthy of public knowledge.

    July 21, 2014

  • Your View: How to upgrade your business

    Let’s see now. When some folks wish to improve the exterior of their properties and have other taxpayers pay for the improvements, they create a community improvement district.

    July 21, 2014

  • Our View.jpg Our view: Street smarts

    If your daily commute has been shortened because you no longer have to wait at 26th Street and Connecticut Avenue for a train to pass, thank your own tax dollars.

    July 21, 2014 1 Photo

  • Other Views Other Views: Decision fails test

    With the announcement that the State Board of Education has decided not to release individual school test results because of cyberattacks and other problems this spring, educators are scratching their heads, as are taxpayers who footed the bill.

    July 21, 2014 1 Photo

Local News
Twitter Updates
Follow us on twitter
Poll

A state lawmaker who is one of two doctors in the Oklahoma Legislature is insisting that unaccompanied immigrant minors being housed at Fort Sill be quarantined. Do you think those kinds of measures should be taken?

A. Yes.
B. No.
     View Results
Facebook
NDN Video
Courts Conflicted Over Healthcare Law Holder Urges Bipartisanship on Immigration Raw: Truck, Train Crash Leads to Fireball US Airlines Cancel Israel Flights Obama Signs Workforce Training Law Crash Victims' Remains Reach Ukraine-held City Diplomatic Push Intensifies to End War in Gaza Obama Offers Condolences at Dutch Embassy Cat Fans Lap Up Feline Film Festival Raw: Lawmakers Scuffle in Ukraine's Parliament The Rock Finds His Inner 'Hercules' Michigan Plant's Goal: Flower and Die Raw: MH17 Passenger Remains in Kharkiv, Ukraine Raw: Israel Hits Gaza Targets, Destroys Mosques Veteran Creates Job During High Unemployment New Orleans Plans to Recycle Cigarette Butts
Sports