Public records show that Sen. Barbara Boxer, chairman of the Senate Select Committee on Ethics, needs a training class on conflicts-of-interest.
Deeds of trust compiled by Leslie Merritt and Frank Perry of the Foundation for Ethics in Public Service show that the California Democrat and her husband, Stewart, held seven mortgages with Countrywide, the company which gave VIP mortgage discounts to influential customers, including Sen. Christopher Dodd, D-CT, and Sen. Kent Conrad, D-ND.
Senate rules prohibit members from accepting deals not available to other borrowers. The loans and properties associated with them are not listed on her personal financial disclosure forms because she deemed them non-income generating, the type exempted from public airing.
Countrywide was once one of the biggest home lenders before the housing collapse, so it is not surprising for the couple to have financed home purchases through the company. But it should raise red flags that she investigated two colleagues for receiving preferential treatment from Countrywide without first disclosing the full terms of her loans, which greatly outnumbered those of the people whose conduct was scrutinized.
Boxer has said she received no preferential treatment and that she paid off the loans prior to the investigation. But even if she did not receive preferential treatment, she should have recused herself from proceedings to avoid the appearance of self-dealing.
Instead, according to AP, she asked “the bulk of the questions” during 2009 secret testimony of Robert Feinberg, who worked with Countrywide’s VIP section and said both Dodd and Conrad were aware of the discounts they received.
According to the July 2009 AP story, “Boxer asked whether Dodd and Conrad received VIP treatment because they were senators. Feinberg said that was not the case; they received breaks as other influential people in Countrywide’s ‘friends’ of Angelo VIP program.”
Her committee absolved Dodd and Conrad of violating Senate rules. It criticized them for not vigilantly enough questioning the company about how they became VIPs, but held the Senate at fault for not offering “specific guidance to senators, officers and employees on the matters they should consider when negotiating mortgages and other financial transactions.”
If Boxer received preferential treatment, it would be like President Bill Clinton ruling on the definition of “is.” And given that her committee sanctioned no member in 2008 and 2009, issuing only three letters of admonition during that time period in spite of receiving notice of nearly 200 potential violations of Senate rules, the culture of non-inquiry makes it seem as if she specifically chose to address this issue to absolve herself and fellow colleagues of any wrongdoing.
Even if she didn’t, it makes a mockery of the self-policing capacity of the Senate for the person in charge of investigating ethics violations not to fully disclose her connections to the company being scrutinized.
And if fellow senators knew she had a connection and said nothing, it makes the Senate look like a good ole’ boys club intent on protecting its own.
Second, her failure to disclose connections to Countrywide reveals the inadequacy of current transparency laws. Records show Boxer and her husband refinanced the loan attached to 286 N. Almenar Drive in Greenbrae, Calif., three times with Countrywide – in 2000, 2001 and 2003.
The couple sold the home in 2006 for $1.875 million, according to Zillow.com. She did not list the property on financial disclosure records because she didn’t have to. Technically it did not generate income. But shouldn’t the extra cash generated by refinancing be considered income – especially if they used it to buy another property?
The money could have been used for many purposes, but records show the couple has purchased multiple properties since the multiple refinancing. In total, the Foundation for Ethics in Public Service found eight assets and seven liabilities not listed on her disclosure forms from 1995 to 2009.
If all assets and liabilities had to be listed on disclosure forms, not just those deemed non-income generating like primary residences, she would not have been able to hide the extent of her Countrywide connections.
Neither would she be able to hide a property she and her husband own with their son and daughter-in-law, which at face value does not pass the no-income test. Even if she and her husband do not earn money from it now, they surely hope it appreciates in order to make a profit from a future sale.
The Hill newspaper reported that Rep. Darrell Issa (R-Calif.), the ranking member of the House Oversight and Government reform Committee, sent a letter to Boxer in July requesting she expand her investigation of VIP lending at Countrywide because of new evidence linking more staffers and senators to the loans.
Until she discloses the complete terms of her loans, fellow members and the public should have no faith in her ability to be an impartial adjudicator. And until ethics laws require members to disclose all of their assets and liabilities, transparency laws are toothless.
Marta H. Mossburg is a fellow at the Franklin Institute for Government and Public Integrity and a columnist for The Baltimore Sun.
