The Countrywide Files
A revolt forces Ed Towns to subpoena the 'Friends of Angelo' documents.
OCTOBER 25, 2009, 6:52 P.M. ET.
At last, there's some good news for taxpayers in the Countrywide Financial loan scandal. On Friday night, House oversight committee chairman Edolphus Towns (D., N.Y.) and ranking member Darrell Issa (R., Calif.) reached an agreement to subpoena documents from the "Friends of Angelo" program. Named for former Countrywide CEO Angelo Mozilo, the program provided VIP mortgages to "friends" including Senators Chris Dodd and Kent Conrad.
Said Mr. Towns, "In line with the commitment to an ethical and accountable Congress, the subpoena to Countrywide covers records that could show special treatment for Members of Congress." This is significant, because a compromise plan floated last week would have authorized a subpoena covering—don't laugh—all federal officials except members of Congress.
Kudos to Illinois Congressman Mike Quigley, who became the first committee Democrat to publicly back a subpoena when he told us, "Both parties must decide that they can't protect their members, no matter how powerful they are." Last week, New Hampshire Democrat Paul Hodes also made the principled decision to buck his party and join Mr. Quigley in calling for the subpoena of Bank of America, which bought Countrywide last year and has said it is ready to provide the documents if asked. These defections from his own party forced the reluctant hand of Mr. Towns, who was under pressure from other Democrats to keep all this under wraps.
Praise also goes to Mr. Issa, who has been pursuing the investigation since last year and kept the pressure on the majority party to face a vote, despite a near total lack of interest from the press corps. That subpoena will now cover all documents related to VIP borrowers since 1996, including emails and any telephone recordings that still exist, for all federal and state officials. The subpoena also covers employees at Fannie Mae and Freddie Mac, who may have received special treatment as an inducement to put taxpayers on the hook for Countrywide's toxic mortgages.
As the largest subprime lender and valued partner of Fannie Mae and Freddie Mac, Countrywide was at the core of the mortgage meltdown. The political class wants to blame the mania and panic on the bankers, but the bankers couldn't have made the subprime lending mess without plenty of political help from Congress. To ensure that this disaster is never repeated, it is critical that Congress uncovers the facts about the extraordinary efforts by Countrywide and Fannie and Freddie to influence federal housing policy.
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