Brooklyn Rep. Ed Towns insists he got no favorable treatment from Countrywide Financial when the subprime lender gave him two loans in 2003 to buy homes.
And yet, according to a blockbuster news report yesterday, Towns made sure that the files for those loans — and for Countrywide loans to other congressmen and staffers — were excluded from a congressional subpoena three years ago.
We’d say the congressman’s credibility is looking . . . subprime.
Recall that Countrywide’s shaky mortgages, and the lender’s subsequent collapse, were key factors in triggering the financial meltdown of 2008.
But Congress played a role, too — by failing to stop mortgage-backer Fannie Mae from undergirding Countrywide loans. Instead, Fannie’s cash kept coming Countrywide’s way.
In the end, Washington had to come up with $116 billion (of taxpayer funds) to bail out the “government-sponsored” mortgage-buying giant. (And Americans suffered their worst recession since the 1930s.)
Last month, Rep. Darrell Issa’s House Oversight Committee shed some light on why officials refused to act.
Through its VIP program, the report said, Countrywide offered cut-rate loans meant “to build goodwill with lawmakers and other individuals positioned to benefit the company.” Among those cited: Ex-Senate Banking Chairman Chris Dodd, Towns and others.
No doubt, Towns — who chaired the House Oversight Committee until last year — hoped to keep his loans and those of his colleagues out of the public eye. And he was well-situated to do so.
Indeed, Towns initially refused to issue any subpoena for the loan documents — until it leaked out that he himself had benefited from Countrywide’s VIP program.
Even when he acted, AP reports, Towns sent explicit instructions that files not be turned over if a borrower’s employer was listed as “the House” or “Congress.”
That, obviously, would have kept his loans and those of his colleagues secret.
It was only thanks to a second subpoena by Issa’s committee that VIP loans to Towns & Co. officially became public.
Towns is retiring in January. Given his sordid role here, that’s not a moment too soon.