NBC: Feds probe loan to ND Sen. Kent Conrad
BISMARCK - A federal criminal investigation into possible wrongdoing by mortgage giant Countrywide Home Loans now includes scrutiny of Countrywide's VIP program, which gave special mortgage deals to government officials, including Sens. Kent Conrad, D-N.D., and Chris Dodd, D-Conn.
That's according to a recent report by NBC News, which interviewed former Countrywide official Robert Feinberg shortly after Feinberg and his lawyer met last month with six people from the Justice Department, including prosecutors from Justice's Public Integrity section.
Feinberg handled Countrywide's VIP program.
Conrad said Friday that the Justice Department hasn't contacted him and the first he knew that the Countrywide VIP program had become part of prosecutors' look at the company was when he saw the Oct. 30 NBC report.
Conrad also reiterated that the Senate Ethics Committee is examining his deal with Countrywide and that he turned over all requested information to the committee in August. The committee's preliminary inquiry is still pending, and the panel hasn't asked Conrad for further information.
Conrad spokesman Sean Neary also noted Friday that the senator has maintained, since the Countrywide VIP loan program first made news last summer, that he "never asked for, or to his knowledge, received any special treatment from Countrywide."
The story broke in June when Portfolio magazine's Web site reported having seen Countrywide company e-mails - and quoted Countrywide employees - alleging there was a Countrywide VIP program for prominent people that the employee called "F.O.A's" or "Friends of Angelo." Angelo Mozilo was CEO of the company, which Bank of America agreed to buy in January while rumors of a bankruptcy were swirling.
The Countrywide documents and employees alleged that when Conrad refinanced a vacation home in Bethany Beach, Del., in 2004, the company waived 1 point on the loan, a deal worth $10,700 in savings to the senator. When Portfolio magazine told Conrad of the alleged special treatment in June, he donated $10,700 to the Habitat for Humanity chapter in Bismarck-Mandan.
In NBC's Oct. 30 report, Feinberg said all the VIPs who received special treatment knew they were getting elite deals, but Conrad said that's not the case.
NBC did not call Conrad for comment before it ran the story last week.
North Dakota Republicans used the NBC report to launch a fresh assault on Conrad, issuing a news release in which state party Chairman Gary Emineth "calls on Conrad to come clean on Countrywide investigations."
Emineth said Conrad should "answer questions regarding his sweetheart mortgage deal," alleged that Conrad "continues trying to dodge the bullets" and said it's "long past time for Conrad to answer the questions about his dealings with Countrywide, and feigning ignorance is no answer."
But, other than the fact that prosecutors may now be investigating the VIP loans, and Feinberg's saying on camera that all the VIPs knew of their special deals, the NBC report contained no information about the VIP program that had not been extensively written about and broadcast in June.
In interviews and op-ed columns for North Dakota newspapers in June, Conrad detailed the chronology of two loans he had had with Countrywide and released supporting documents. He also told how, more than two years before Countrywide allegedly gave him preferential treatment, he had had a brief, accidental phone conversation with Mozilo after phoning his longtime friend and former Fannie Mae executive Jim Johnson for advice on shopping for a mortgage. Johnson was with Mozilo at the time and handed the phone to Mozilo to talk to Conrad. All Mozilo did was give Conrad the name of a junior loan officer whom Conrad dealt with in getting the loan, he said. That was in 2002. The alleged VIP treatment happened in 2004.
Told on Friday that the Justice Department hasn't talked to Conrad, Emineth said, "I guess time will tell if that's the truth or if he's going to be charged with anything."
Emineth said the VIP loans are freshly pertinent given that the subprime mortgage crisis that festered and grew most of the year had culminated in a federal bailout of the financial industry, for which Conrad voted in favor.
"People need to be told there's a Justice Department investigation," Emineth said.
Cole works for Forum Communications Co., which owns The Forum. She can be reached at (701) 224-0830 or email@example.com