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Senate Submerged in Mortgage Scandal

Wednesday, June 18, 2008

This is a rush transcript from "Hannity & Colmes," June 17, 2008. This copy may not be in its final form and may be updated.


REP. CHRIS DODD (D), CONNECTICUT: At no point did anyone ever suggest to me that we were supposed to get some deal out of Countrywide. I never spoke to anybody except loan officers about this thing, never any higher ups or any senior people within Countrywide, and had anyone ever suggested to me that I was going to get some preferential treatment, that would have ended the relationship immediately.


SEAN HANNITY, CO-HOST: That was Connecticut Senator Chris Dodd, one of two Democratic senators implicated in the Countrywide financial mortgage scandal. Now Dodd and North Dakota Senator Kent Conrad were accused of accepting sweetheart deals from Countrywide.

In a Wall Street Journal editorial, while both men denied the allegations, Conrad did admit to asking the CEO of Countrywide for a loan.

Joining us now is the man who's looking into launching an investigation, Texas Republican Congressman Jeb Hensarling is with us.


Jeb, how are you? Welcome to the show.

REP. JEB HENSARLING (R), TEXAS: Thank you. Thanks for having me.

Video: Watch Sean and Alan's interview on the Senate's mortgage scandal

HANNITY: By the way, the whole friends of Angelo, this is where Jim Johnson got in trouble. But of course, Barack Obama's not going to vet the vetters. But he got a series of loans at a special rate, because he's friends of Angelo, the CEO of Countrywide, who was widely criticized by Senator Barack Obama.

Tell us about your investigation into Dodd and Conrad.

HENSARLING: Well, it's really quite simple, Sean. I mean, millions of Americans are struggling to pay their mortgages. They have a right to know whether members of Congress receive sweetheart deals in order to pay for theirs. I mean, it's really quite that simple.

And now, now, tomorrow, the Senate is going to vote on what could be a $300 billion bailout bill for the largest mortgage lenders in America. And you want to know what did the sweetheart deals have to do with that legislation that could cost people millions of dollars and increase their taxes?

HANNITY: All right. Now we know on occasion Jim Johnson — and this is the same Countrywide that Barack Obama criticized: "These are people responsible for infecting the economy and helping create a home foreclosure crisis." He personally took on the CEO, Angelo Mozilo.

And yet can you go into the specifics of Conrad and Dodd and the preferential treatment they had that resulted in Jim Johnson having to get off this VP vetting committee?

HENSARLING: Well, again, what we know is mainly from news reports, and it's one of the reasons that I've called for an investigation and congressional hearings.

But what we appear to know is that the chairman of the Senate Banking Committee knew he was on a VIP list. And I don't know if he doesn't know what the "I" in VIP means.

HANNITY: The friend of Angelo list.

ALAN COLMES, CO-HOST: Let me ask you, Senator — Congressman. I just promoted you there. Chris Dodd said he had two refi's at 4.25 percent, another one at 4.5 percent, and that was within the range of what was available at that time. Do we know that to be true?

HENSARLING: Well, again, he knew he was on a VIP list. He appears to have had some kind of savings. All I'm saying is, again, when people are struggling all over America to pay their mortgages, they're not on any kind of VIP list.

COLMES: I agree. But if he paid the same rate...

HENSARLING: They have a right to know whether or not members of Congress are getting unduly influenced by being on a VIP list.

COLMES: I absolutely agree with you on that. The question is whether or not the rates that Chris Dodd cited as the rates he paid were comparable with what other people paid at the time, which would mean he didn't get any special treatment?

HENSARLING: Well, that's another reason we should have a hearing and figure out what the facts are. I myself don't necessarily know exactly what interest rate he received, but he has admitted to saying, "Yes, I knew I was on a VIP list."

COLMES: Well, being on a list...

HENSARLING: The question is again — the question is, again, how widespread was this practice? We also know there's an e-mail from the CEO of the company, saying, "Give a sweetheart deal to this guy because he's a United States senator."

COLMES: Well, if this appears...


COLMES: ... claims, which should be looked into. And if it checks out, then he should be in the clear. But you're also going to look into people like Alphonso Jackson, who was a Bush HUD deputy secretary when he wound up with a special deal, as well.

Are you only going to look at Congress people in your investigation?

HENSARLING: Well, again, I've asked for the investigation to lead where it goes. And so it should — it should look at all people. I mean, listen, neither party has a virtue, has a monopoly on virtue.

But, again, what we have to do is get to the bottom of this. And Speaker Nancy Pelosi claimed — claimed that we would have the most open, honest Congress in the history of America. How can she not call for hearings? I mean, when you see this much smoke...


COLMES: You know, if — if everything Chris Dodd, for example, said today is accurate, I can't imagine there being a problem. He paid a comparable rate. He spoke with no higher ups. And there was no red flag to him that he was getting any special treatment. And he said if he knew that, he would not have gone for it. Doesn't the man have a right...

HENSARLING: Again, you're talking about one individual.

COLMES: Right.

HENSARLING: We've got another individual who admits calling the CEO of the largest mortgage lender in America to arrange a loan.

Now, if most Americans want to go out and buy a car, they don't say, you know, "I think I'll call the chairman of the board of Ford Motor Company and see what kind of deal we can make here."

COLMES: And I'm also talking about a Bush — at the time who apparently is implicated here, as well.

HENSARLING: Listen, I'm happy to have the investigation go where it goes. But the speaker, who said we'd have an open and honest Congress, why hasn't she called for this investigation?

COLMES: All right.

HENSARLING: Is it because nine of the ten people are Democrats?

COLMES: We thank you very much for being with us. Thank you for your time tonight.

HENSARLING: Thank you.

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Why is anyone surprised?

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Hope they ask DODD ABOUT THE 5 MILLION from the AMERICAN MORTGAGE BANKERS ASSOCIATION, (via Larry Litton, Director) and they should expand the investigation into the  DTC AND CEDE AND COMPANY!
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Let 'Em Eat Cake

The rich get richer, period.

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3 former top Fannie Mae execs agree to pay $31.4M settlement | | The Tennessean

3 former top Fannie Mae execs agree to pay $31.4M settlement

Civil suit accused them of manipulating earnings over six years

By MARCY GORDON • Associated Press • April 19, 2008

Raines, former Fannie Chief Financial Officer Timothy Howard and former controller Leanne Spencer were accused in a civil lawsuit in December 2006 with manipulating earnings over a six-year period at the company, the largest U.S. financer and guarantor of home mortgages.


Raines, a prominent Washington figure who was President Clinton's budget director, has agreed to pay $24.7 million, including a $2 million fine and relinquishing of company stock options valued at $15.6 million.

Howard is paying $6.4 million and Spencer $275,000.

The deal was announced by the Office of Federal Housing Enterprise Oversight, the agency that oversees Fannie Mae and Freddie Mac, the two big government-sponsored mortgage finance companies.

"OFHEO's mission is to ensure that (Fannie and Freddie) operate in a safe and sound manner," the agency's director, James B. Lockhart, said in a statement. "That cannot occur without corporate management providing prudent and responsible leadership and setting the appropriate ethical and overall 'tone at the top.' "

Fannie and Freddie both had multibillion-dollar accounting scandals that stunned Wall Street and brought record civil fines against them in settlements with the government.

The amounts that Raines, Howard and Spencer are paying under the settlement are far less than what the government was seeking when it sued them in December 2006. OFHEO sought fines of around $100 million against the three and restitution totaling more than $115 million in bonus money tied to an improper accounting scheme.

The regulators alleged an accounting fraud at Washington-based Fannie Mae that included manipulations to reach quarterly earnings targets so that Raines, Howard, Spencer and other company executives could pocket hundreds of millions in bonuses from 1998 to 2004.

Raines and Howard were swept out of office in December 2004 in the accounting fiasco at Fannie Mae.

Two years later, the company announced a restatement for 2001 through June 30, 2004, that erased $6.3 billion in previously reported profit.

Raines' total compensation from 1998 through 2004 was $91.1 million, including some $52.6 million in bonuses, according to OFHEO. Howard earned $30.8 million during the period, including $16.8 million in bonuses; Spencer received $7.3 million, of which some $3.5 million was bonus money.

Fannie Mae paid a record $400 million civil fine in a settlement with OFHEO and the Securities and Exchange Commission. It also agreed to make top-to-bottom changes in its corporate culture, accounting procedures and ways of managing risk.

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ham69 wrote:
Hold on. Raines made a total of 91.1 million over a six year period. He was fined a total of 24.7million. So by committing these crimes he made 65 million more or less? Is this right? Am I missing something? This is punishment? It's almost enough to make me turn into a liberal. Not! Seriously. He should be fined the whole 91.1 million and spend a couple years in JAIL. Real JAIL. The kind the rest of us would be sitting in. Punishment for these crimes should be so severe, they will be scared to death of committing them, and if they want to add the chopping off of a hand, I'll support that too.
4/20/2008 7:20:08 AM
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