Prosecutors Look at Countrywide VIP Loans

10 Nov 2008 // BISMARCK — A federal criminal investigation into possible wrongdoing by mortgage giant Countrywide Home Loans now includes scrutiny of Countrywide’s VIP program that 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 the VIP program for Countrywide.

But Conrad said Friday 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 any more 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 American agreed to buy in January while rumors of a Countrywide 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 a $10,700 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 of the VIPs who received special treatment knew they were getting the 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 development that prosecutors may now be looking into 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.