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Brooks Wilson's Economics Blog: Conrad and Dodd: Ethics?

Sunday, October 18, 2009

Conrad and Dodd: Ethics?

Senator Kent Conrad (ND) and Christopher Dodd (CT) took sweetheart VIP loans offered by Countrywide through its "Friends of Angelo" loan program.  The senators were found innocent of wrongdoing by the Senate Ethics Committee.  I doubt that the senators were guilty of a crime.  They are both intelligent men with years of experience in Washington.  Any legislator with as much experience should be able to successfully navigate the shoals of illegality, but why are they sailing in dangerous waters?  Too often it is to claim legal but unethical privilege.  When Countrywide offered VIP loans, Conrad and Dodd should have behaved like Joseph who when when tempted by the seductress, left his robe and fled.  Instead, they took the loans.  Let me offer a rule of thumb for legislators and voters.  Anytime that a legislator feels that they deserve VIP treatment they have served too long. 

Mother Jone's Andy Kroll described the Senate Ethics Committee findings in "Countrywide VIP Loans, The Sequel."
On Friday came the less-than-shocking news that the Senate Ethics Committee had let...senators Kent Conrad and Chris Dodd off the hook for their controversial VIP loans from fallen mortgage giant Countrywide Financial's "Friends of Angelo" program. A few hours later, in a quintessentially Washington move, two of their colleagues introduced legislation to "increase transparency and strengthen mortgage disclosure for Members of Congress," as a press release put it on the site of Sen. Barbara Boxer (Calif.), who authored the bill along with Sen. Johnny Isakson (Ga.).

This wasn't a move by two disgruntled renegade senators outside the ethics committee, angry about its dubious decision to give Dodd and Conrad a pass. No, Boxer chairs the panel, and Isakson is its vice chairman. Their legislation is basically a symbolic move to whitewash the Ethics Committee's leniency.

The saga continues as the House picks up where the Senate left off.  A Wall Street Journal  "Review and Outlook" column titled, "The Countrywide Vote," describes the House Ethics Committee investigations and why they are likely to provide cover for the senators and others.
Senators Chris Dodd and Kent Conrad lawyered up when the Senate ethics committee asked about their VIP loans from Countrywide Financial. But the sweetheart Senators may not be able to stop another look at their dealings with the subprime mortgage factory. A ###### on the House oversight committee, Illinois freshman Mike Quigley, tells us that he supports a subpoena to obtain documents on the "Friends of Angelo" loan program.

Named for former Countrywide CEO Angelo Mozilo, the program was used to curry influence with government officials. Bank of America, which bought the failed lender last year, has said it's ready to turn over the files as soon as it receives a subpoena.

We're told that, at a closed Thursday meeting of ###### on the House oversight committee, several Members urged Chairman Edolphus Towns (N.Y.) to allow a vote on California ###### Darrell Issa's proposal to issue the subpoena. Mr. Towns received two mortgage loans from the Countrywide unit that processed VIP loans but claims he received no special favors.
I have deleted reference to political party. Power affects officials of both parties equally; it corrupts. One way to limit abuse of power is to increase oversight, the stated purpose of the Boxer-Isakson bill.  A second way to limit abuse is  to lessen legislator's ability to interact with economic agents through legislation.  This would give elected officials less to sell. 

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