The Senate ethics committee ruled Friday to drop its investigation into whether Democratic Sens. Christopher Dodd and Kent Conrad violated the rules by receiving favorable interest rates from Countrywide Mortgage.
In letters sent to both Senators, the committee, chaired by Sen. Barbara Boxer, D-Calif., said it conducted an extensive, year-long probe and reviewed thousands of pages of documents to reach the conclusion that neither lawmaker broke an official rule of the Senate.
But the panel chastised both men, writing to each that, “the committee does believe that you should have exercised more vigilance in your dealings with Countrywide in order to avoid the appearance that you were receiving preferential treatment based on your status as a senator.” Dodd, of Connecticut, is chairman of the Senate Banking Committee while Conrad holds the gavel on the Senate budget panel.
Conrad and Dodd were among several Washington D.C. power players who received special interest rates on loans from Countrywide, though both denied knowing they were getting special treatment.
The ethics letters provided an inside look into how two of the most powerful lawmakers in Washington went about refinancing their homes.
Conrad, for instance, went about refinancing his beach property in 2002 with Countrywide CEO Angelo Mozilo after first talking with “long-time mutual friend Jim Johnson, the former CEO of Fannie Mae.”
Dodd, on the other hand, said he never talked personally with Mozilo and was told the V.I.P program Countrywide placed him “offered heightened attention to service quality.”
Shortly after the V.I.P loans were disclosed, Citizens for Responsibility and Ethics in Washington formally asked the Senate ethics panel to investigate whether they violated the Senate ban on gifts. The ethics committee said Friday that there is an exception to the rule “for opportunities and benefits in the form of loans from banks and other financial institutions on terms generally available to the public.”
Overall, the committee concluded, there was no evidence that the deals Conrad and Dodd received were not also the best rates generally available in the marketplace.
CREW Executive Director Melanie Sloan was skeptical of the panel’s decision to dismiss the case.
“As is its practice, the Senate Ethics Committee has cleared the senators of any wrongdoing despite the fact that the senators participated in a program the committee found, offered quicker, more efficient loan processing and some discounts,” Sloan said.
It will be interesting to see whether the committee’s decision will help Dodd politically. He is up for reelection in November and has been struggling in the Connecticut polls, in part because of the revelation of his sweetheart interest rate from Countrywide.
