A new report laying out how the nation’s then-largest issuer of subprime mortgages bought improper influence with hundreds of Capitol Hill VIPs landed yesterday — demonstrating in depressing detail how the skids to America’s 2008 housing-market collapse were greased.
But don’t count on seeing anyone marched off in handcuffs: No laws were broken, according to the 130-page document — issued by Rep. Darryl Issa’s House Oversight Committee after years of Democratic stonewalling.
Well, of course no laws were broken: Washington writes them, after all.
This scheme proceeded hand-in-glove with the mortgage giant Fannie Mae — to both sides’ benefit. Here’s how it worked.
Countrywide was at one time the nation’s largest issuer of subprime mortgages; its collapse helped touch off the 2008 economic crisis.
And fully 90 percent of those loans were bought and/or backed by Fannie Mae.
Which means that the two outfits — one private, one public — were dependent on each other for continued financial success.
Issa’s committee found that Countrywide gave low-cost loans to strategically placed members of Congress, congressional staffers, Cabinet secretaries and — especially — Fannie Mae execs.
Many were personally arranged by Countrywide CEO Angelo Mozilo under a “Friends of Angelo” program to people like successive Senate Banking Committee Chairmen Chris Dodd (D-Conn.) and Kent Conrad (D-ND).
Another “Friend” was former House Oversight Committee Chairman Ed Towns (D-Brooklyn) — who got a cut-rate mortgage from Countrywide for a Florida home.
The loan program, Issa found, “was a tool used by Countrywide to build goodwill with lawmakers and other individuals positioned to benefit the company.”
So why isn’t anyone likely to wind up inside a prison cell? Because there weren’t any explicit quid pro quos in return for the loans — and because “conversations about discounts and other forms of preferential treatment [were kept] internal.”
So they only “skirted the federal bribery statutes” to “cast a wide net of influence.”
Indeed, both the Senate and House Ethics Committees investigated — and found no grounds for as much as a reprimand.
Well, why would they? Again, they were investigating their own.
Washington has long done business this way — and still, in large measure, does.
What a disgrace.