Senators’ Frequent Flyer Mortgages

A pair of U.S. Senators under investigation for getting heavily discounted mortgages from a bank that folded last year claim the unethical perk—which saved them tens of thousands of dollars—was merely a courtesy similar to frequent flyer miles offered by airlines. 

The secret low-mortgage rate deals were part of a VIP program available only to powerful friends of the defunct bank’s crooked Chief Executive Officer (Angelo Mozilo), a key player in the nation’s subprime-mortgage meltdown who has been charged with fraud and insider trading. 

When the bank (Countrywide Financial Corp) inevitably folded the undercover deals were exposed and triggered investigations by two congressional committees (Senate Select Committee on Ethics and the House Oversight and Government Reform Committee) because so many lawmakers were involved. 

Two of the high-profile Democrats who benefitted from the so-called VIP deals, which waived tens of thousands of dollars in fees and points, insist they did nothing wrong. Christopher Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee, said his VIP status was “nothing more than…courtesy stuff,” and North Dakota’s Kent Conrad, chairman of the Senate Budget Committee, says he “thought nothing of it” because it was like a “frequent-flyer program.”

A Countrywide official who handled the loans assures that both lawmakers knew they got preferential treatment that saved them tens of thousands of dollars. Dodd, a senator for more than 25 years, has a documented history of being corrupt and in fact made Judicial Watch’s 2008 most corrupt politicians list. Earlier this year Judicial Watch filed a complaint against the Connecticut legislator with U.S. Senate Select Committee on Ethics for helping a criminally convicted friend get a presidential pardon in exchange for valuable gifts that were not disclosed on Senate Financial Disclosure Forms.  

Dodd and Conrad are hardly the only high-profile politicians to benefit from questionable secret mortgages that many—including President Obama—blame for infecting the economy and creating a home foreclosure crisis. A top Obama advisor and longtime Democratic Party power player (James Johnson) received millions in shady loans under Mozilo’s VIP program and so did George W. Bush’s Secretary of Housing and Urban Development (Alphonso Jackson), Bill Clinton’s Secretary of Health and Human Services (Donna Shalala) and Jimmy Carter’s assistant Secretary of State (Richard Holbrooke).