I am a Democrat. I am an enthusiastic supporter of Barack Obama, and was a major fan of and supporter of Chris Dodd's efforts to derail FISA phone-company protection legislation. I have over 2500 comments on DKos going back several years. I am certainly not a recent "McCainiac" troll or community agitator. I do not believe my credentials should be in doubt here.
I am in doubt as to whether Chris Dodd should keep his Banking Committee chairmanship in the light of his involvement in the recent Countrywide influence-peddling scandal and alleged violations of Senate Ethics rules. I could be convinced either way.
I love Chris Dodd and I know this community has a lot of support for him, and for good reason. But this issue needs to be investigated.
Two U.S. senators, two former Cabinet members, and a former ambassador to the United Nations received loans from Countrywide Financial through a little-known program that waived points, lender fees, and company borrowing rules for prominent people.
Senators Christopher Dodd, Democrat from Connecticut and chairman of the Banking Committee, and Kent Conrad, Democrat from North Dakota, chairman of the Budget Committee and a member of the Finance Committee, refinanced properties through Countrywide’s "V.I.P." program in 2003 and 2004, according to company documents and emails and a former employee familiar with the loans.
Other participants in the V.I.P. program included former Secretary of Housing and Urban Development Alphonso Jackson, former Secretary of Health and Human Services Donna Shalala, and former U.N. ambassador and assistant Secretary of State Richard Holbrooke. Jackson was deputy H.U.D. secretary in the Bush administration when he received the loans in 2003. Shalala, who received two loans in 2002, had by then left the Clinton administration for her current position as president of the University of Miami. She is scheduled to receive a Presidential Medal of Freedom on June 19.
As Democrats, I believe we need to hold our own to as high (or perhaps higher) standards than Republicans, from whom we expect this sort of thing.
According to company documents and emails, the V.I.P.'s received better deals than those available to ordinary borrowers. Home-loan customers can reduce their interest rates by paying "points"—one point equals 1 percent of the loan’s value. For V.I.P.'s, Countrywide often waived at least half a point and eliminated fees amounting to hundreds of dollars for underwriting, processing and document preparation. If interest rates fell while a V.I.P. loan was pending, Countrywide provided a free "float-down" to the lower rate, eschewing its usual charge of half a point. Some V.I.P.'s who bought or refinanced investment properties were often given the lower interest rate associated with primary residences.
How can we expect Chris Dodd, who is currently pushing billions of dollars of banking legislation through the Senate, to be impartial when he allegedly took money from Countrywide? Whose interest is he working for? Ours, or Countrywide's? Sorry to have to ask this, but if Dodd was a Republican we would be rightfully up in arms.
Karl Denninger reminds us about Senate Ethics rules.
Does this constitute bribery on a massive scale?
You be the judge.
Here's something to help you make up your mind (Senate Ethics Rules):
1. (a)(1) No Member, officer, or employee of the Senate shall knowingly accept a gift except as provided in this rule.
(2)(A)A Member, officer, or employee may accept a gift (other than cash or cash equivalent) which the Member, officer, or employee reasonably and in good faith believes to have a value of less than $50, and a cumulative value from one source during a calendar year of less than $100. No gift with a value below $10 shall count toward the $100 annual limit. No formal recordkeeping is required by this paragraph, but a Member, officer, or employee shall make a good faith effort to comply with this paragraph.
(B) A Member, officer, or employee may not knowingly accept a gift from a registered lobbyist, an agent of a foreign principal, or a private entity that retains or employs a registered lobbyist or an agent of a foreign principal, except as provided in subparagraphs (c) and (d).
(b)(1) For the purpose of this rule, the term "gift" means any gratuity, favor, discount, entertainment, hospitality, loan, forbearance, or other item having monetary value. The term includes gifts of services, training, transportation, lodging, and meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred.
"I didn't ask" isn't a defense; you can't accept anything worth more than $100. Oh, and Countrywide spent plenty of money on lobbying, so the "private entity" appears to apply here.
I am willing to listen to Chris Dodd's explanation for these series of events, but very carefully. We cannot allow even the appearance of impropriety in our operation of the government. If voters get the idea that we are corrupt, we will lose our majorities.
Karl continues:
Now Mr. Dodd, would you please explain your "special" loan terms, and further, explain why we the people should put up with you filing bills to spend $300 billion in public funds that we do not have, along with exactly what sorts of conflicts of interest you and those around you in the House and Senate have in this regard?
Perhaps you can tell us how you, as the Banking Committee Chairman and presumably highly-knowledgeable in matters of finance, could have possibly gotten this "deal" on your mortgages without realizing that they were in fact "special" terms that were not available to ordinary people - and further, how you could possibly not know that these "special terms" added up to a net benefit of more than $100, and were therefore not allowed under the Senate's Ethics Rules?
For the record, I do not take a position on Dodd's guilt or innocence in this matter, and am generally inclined to think he is innocent. I like Dodd, and he has taken principled stands in the past on items I support. But the questions Denninger is asking are the same questions many of the American people are going to be asking.
Dodd owes all of us an explanation, I think. Unfortunately, this situation puts us all at risk. Dodd has a responsibility to progressives, his supporters, and his ideals to set things right.