After coming under fire last year for receiving "V.I.P." rate mortgages from Countrywide Financial on his two homes, Sen. Chris Dodd released a much-anticipated report reviewing the terms of the 2003 mortgages. The report aims to dispell notions that Dodd received preferential treatment from Countrywide CEO Angelo Mozilo, who ran a V.I.P mortgage program for important political figures.

The two documents released today include a professional review of the terms of the mortgage by the independent company CrossCheck Compliance LLC and a summary highlighting information showing that the rates Dodd received were no different than the commonly offered rates at the time. The key finding in these documents is that mortgage companies were offering rates at or better than the rates that Dodd received for similarly qualified mortgage candidates.

Which begs the question: Was Angelo Mozilo trying to scam political movers and shakers into thinking they were getting special treatment? Or is there more than meets the eye here.

The documents released by the senator are attached below.

Dodd Final Report

Dodd Document Summary

Now that it is official that the Feds are investigating Countrywide's "VIP" home loan program, it's time to revisit one of the key problems in disclosure that abetted the hiding of these loans. Since every member of Congress is required to file an annual personal financial disclosure report it would seem as though the public would have the ability to know which lawmakers received loans from which mortgage company and at what rate. Unfortunately, personal financial disclosures do not require lawmakers to list private residences or any home that does not generate income (ie: rent).

This is a problem with an easy solution. Earlier this year, numerous lawmakers, including Rep. Mark Souder and members of the Senate Ethics Committee, introduced bills to require limited, but adequate, disclosure of personal residences. Now that this issue is back in the headlines Congress should move quickly to address future concerns and tackle the myriad other problems with the personal financial disclosure forms.

The Sunlight Foundation's Executive Director Ellen Miller had an op-ed in Roll Call (sub. req'd) earlier this year that addressed the failings of the personal financial disclosure:

...Congress must make personal financial disclosures more transparent and accurate. All of the manners in which lawmakers obscure their finances must be eliminated. Exact dollar figures must replace ranges. Loopholes for residences that do not generate income should be closed. Lawmakers must reveal how much stock they own, show who they are doing business with when engaged in a partnership, and list property in a more transparent manner. Personal financial disclosure reports must live up to the desire of Congressional leaders to operate in an open and honest manner.

An investigation begins into the Friends of Angelo. Stevens' conviction prompts reform group push. Some people don't like transparency. That and more in today's news:

"Friends of Angelo" beware! The FBI is investigating the "VIP" home loan program for public officials operated by Countrywide. Countrywide chief Angelo Mozilo made sure that public officials who could be influential in matters relating to his business received "VIP" rates on interest rates and loan fees. Sen. Chris Dodd and Sen. Kent Conrad both received "VIP" loans from Mozilo's Countrywide. They are currently both cooperating with a Senate Ethics Committee investigation. The operator of the "VIP" program Robert Feinberg spoke to federal investigators noting, "he's not aware of any discounts linked to favors, but he did see e-mails noting the potential value of the relationships to Countrywide's political and business interests." Both Conrad and Dodd stated that they did not know that a "VIP" program would provide them with special perks and savings. Feinberg, however, responds, "nine times out of ten, once you mention 'V.I.P' the person's gonna ask you 'what am i getting for being in this V.I.P department?' Or 'what am I getting because I know Angelo?' Or 'I talked to Angelo and he said I'm getting this.'"

Sen. Ted Stevens faced a welcome reception among fellow Republicans in Alaska as he denounced the "corrupt prosecutors" who successfully won seven convictions against the seven-term senator. Back in Washington, reform groups are organizing to pressure the Senate to create an independent body, working in conjunction with the Senate Ethics Committee, to oversee ethics complaints. The House approved an independent oversight board this year. The ethics committees in both chambers have taken flack for failing to properly police their members. While the ethics process has, since the eighties, primarily been used as a partisan tool, the system completely shut down after former Majority Leader Tom DeLay was reprimanded multiple times for various abuses of House rules.

Some dare call it transparency. The Aspen Times reports on local political donors who are uneasy about the availability of campaign contribution information online. Most of these individuals did not know that their contributions would be part of the public record and are upset that Google searches for their name turn up their political contributions. Involvement in the activities of public figures, particularly the financing of them, requires disclosure to ensure an open and honest system of governance. There is no reason to fear Big Transparency.

If you're paying attention to the presidential campaign and checking polls every half-hour you may want to check a decent predictor of the outcome, lobbyist shuffling on K Street. Comcast recently fired their Republican lobbyist Kerry Knott, a former Dick Armey aide, and replaced him with Melissa Maxfield, a former aide to former Sen. Tom Daschle. Daschle is, of course, a top aide to Sen. Barack Obama and noted as a potential White House Chief of Staff or cabinet secretary, in the case that Obama wins the Nov. 4 election. Companies are already girding up for future battles by taking on lobbyists who would have influence in a potential Obama administration.

So, the indictment is in and the charges against Sen. Ted Stevens include seven counts of making false statements on his personal financial disclosure forms from 1999-2006. Many of these false statement counts revolve around work done on Stevens' Girdwood, AK home courtesy of the VECO oil company. Sunlight's Bill Allison makes the case at Real Time Investigations that if the money spent on equipment, parts, and labor did not constitute a gift, but rather a loan, then Stevens would be allowed to omit them from his disclosure forms, thereby acquitting him of several false statement charges:

[F]rom my quick read of the indictment, it appears that the government is suggesting that when Stevens says he has no liabilities of more than $10,000, that means the hundreds of thousands of dollars Stevens is alleged to have received as benefits from VECO couldn’t possibly have been loans. But if (and for the record, I doubt this is likely), if Stevens was borrowing money, labor and materials to renovate a residence from VECO rather than accepting it as a gift, I’m not sure Stevens would have to report it under current personal financial disclosure rules, which say,

property which is held or maintained solely for recreational or personal purposes does not have to be reported…. (p. 131)

and

Mortgages secured by a personal residence (including secondary residences) that are not used for rental purposes do not have to be disclosed. (p. 136)

Suppose there was some understanding Stevens would repay Veco or its CEO, Bill Allen, for the home repairs, the car swap, the furniture and so on — shouldn’t the public know of those potential conflicts of interest? The indictment reminds us,

The primary purpose of the yearly Financial Disclosure Forms is to disclose, monitor and deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members. Because the yearly Financial Disclosure Forms require public disclosure of financial information by each Member of the United States Senate, such as income, assets, gifts, financial interests, and liabilities, the Forms provide the public at large, including the voters of a particular state, with the information necessary to allow the public to evaluate and consider official conduct by a Member of the United States Senate in light of that Member’s private finances.

Do the current disclosure requirements adequately “deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members,” if they exempt personal residences, mortgages, car loans and so on from public view?

As Bill says, it is highly unlikely that these were loans and not gifts. One would have to assume that the cooperating witness identified in the indictment, VECO CEO Bill Allen, provided enough information to prove that there was no intention of repayment. Also, as I previously noted in the previous blog post, paragraph 17 of the indictment suggests (although the DOJ insistently declared that it does not allege) a possibility of quid pro quo:

17. It was a part of the scheme that STEVENS, while during that same time period that he was concealing his continuing receipt of things of value from ALLEN and VECO from 1999 to 2006, received and accepted solicitations for multiple official actions from ALLEN and other VECO employees, and knowing that STEVENS could and did use his official position and his office on behalf of VECO during that same time period. These solicitations for official action, some of which were made directly to STEVENS, included the following topics: (a) funding requests and other assistance with certain international VECO projects and partnerships, including those in Pakistan and Russia; (b) requests for multiple federal grants and contracts to benefit VECO, its subsidiaries, and its business partners, including grants from the National Science Foundation to a VECO subsidiary; and (c) assistance on both federal and state issues in connection with the effort to construct a natural gas pipeline from Alaska’s North Slope Region.

There is likely more information yet to be revealed, as the DOJ stated the investigation is ongoing, that would prove that these gifts and not loans.

Returning to Bill's chief point, there is a clear loop hole exposed in the system of conflict of interest disclosure. The personal financial disclosure documents are important in the revelation of conflicts of interest and ought to reveal all conflicts that lawmakers hold. In recent months and weeks, the number of stories highlighting conflicts that arise from the ownership of personal homes is putting a spotlight on the need for greater disclosure.

Sens. Chris Dodd and Kent Conrad received favorable mortgages on homes from Countrywide. Only Conrad disclosed his mortgage and home on his personal financial disclosure form. Rep. Laura Richardson defaulted on numerous mortgages which should have been disclosed but were not. And today it was reported that Rep. Joe Knollenberg undervalued his D.C. residence on more than one financial disclosure.

After considering these cases, most egregiously the case of Sen. Stevens, I'll let you comment on Bill's final question:

Do the current disclosure requirements adequately “deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members,” if they exempt personal residences, mortgages, car loans and so on from public view?

Last month, after Portfolio revealed that Sens. Chris Dodd and Kent Conrad received favorable loan deals from mortgage giant Countrywide, members of the Senate Ethics Committee attempted to attach an amendment to housing relief legislation that would require the disclosure of mortgages and their details for members of Congress in their annual personal financial disclosure reports. The amendment was ruled non-germane and was dropped from consideration.

In the House, Rep. Mark Souder is keeping the disclosure flame alive, introducing a bill to require mortgage disclosure on personal financial disclosure reports. Souder's bill would mandate the disclosure of home mortgages including the name of the creditor, the interest rate on payments, the number of years remaining, and the amount of the mortgage.

This is a good step in providing more detailed and accurate information on personal financial disclosure reports, and certainly a proper response to the Countrywide revelations. Congress should take this issue seriously and aim to adopt the transparency reforms in Souder's bill.

For further steps on clarifying and furthering disclosure in personal financial disclosures, you can see Ellen Miller's Op-Ed in Roll Call (no subscription needed this time) from a few weeks ago.

The Pfizer-General Motors-Northwest Airlines-United-Coors Democratic and Republican conventions are looking for more sponsors; Dodd doesn't understand acronyms; sometimes it's not really disclosure; bad campaign donations; ethics complaints; angry foreigners; and our favorite frozen food fan, William Jefferson. Only the Sunlight Foundation sponsors this news:

The next big moment in the 2008 Presidential election will be the late-summer nominating conventions where a carefully staged and scripted performance will be fueled by large corporate donations despite the reformer images presented by the two nominees. Participants can expect discounted plane tickets, free cars, hot parties, and lobbyists, lobbyists, lobbyists. The inverse of AA, sponsors don't help you with your problem, they make it worse. Both convention organizing committees have released documents to leading corporate fundraisers informing them that certain levels of contributions will lead to access to elected officials. The Republican convention packet explains to donors that they will be able to "connect with influential government officials (cabinet, president, next president)." The Democratic convention produced a "corporate sponsorship package" that gets you into events with Colorado Gov. Bill Ritter, Sen. Ken Salazar, among others. To his credit, Democratic nominee Barack Obama wants to change the corporate funding model for conventions.

Sen. Chris Dodd claims that he did nothing wrong when he received a preferential mortgage from Countrywide Financial because he did not know that the VIP program meant he would be treated with preference. I can't decide if this makes Sen. Chris Dodd totally out of touch or totally in touch with the average American. Sen. Kent Conrad continues to defend his name, stating that he received preferential treatment unknowingly. Conrad has donated the estimated amount of money he saved from the treatment to charity.

Speaking of congressional mortgages and homes, you won't always find them on the personal financial disclosures that lawmakers are required to file. Why? Because lawmakers don't have to list personal residences that don't create rental income. The Politico writes, "They don’t have to disclose loan amounts. They don’t have to disclose loan rates. And they don’t have to disclose mortgage lenders." Sen. John Cornyn, ranking Ethics Committee member, states that he would like to see changes in personal financial disclosure forms.

Rep. Mary Bono Mack is being asked about campaign contributions from Inland Empire businessmen currently under investigation for contributions to state-level California politicians.

CREW files an ethics complaint against "dead-beat congresswoman" Laura Richardson.

Foreign companies that own U.S.-based subsidiaries are fighting back against proposed transparency reforms by Sen. Chuck Schumer to close loopholes in the Foreign Agents Registration Act.

The federal grant at the center of the indictment of family members of Rep. William Jefferson began as an earmark inserted at the last minute into an appropriations bill. In an unsurprising turn of events, no lawmaker has taken credit for the earmark.

Congressional Quarterly reports that the Senate Ethics Committee is looking into the preferential loan treatment that Sens. Chris Dodd and Kent Conrad received from Countrywide Financial.

Senate Budget Committee Chairman Kent Conrad said Tuesday that the Ethics Committee is examining mortgages he received in 2004 from Countrywide Financial.

“I’m talking to the Ethics Committee,” said Conrad, D-N.D., who, along with Banking Chairman Christopher J. Dodd of Connecticut, has been identified in published reports as being among a group of six current and former officials given unusually favorable mortgage deals from Countrywide.

The committee investigation looks to be spurred by both a complaint filed by CREW - yes, the Senate actually accepts outside complaints - and the doggedness of Sen. Conrad to clear his name. It is clear from the article that Conrad is the one making sure the media knows that the tight-lipped Ethics Committee is investigating his loan.

Wealth disparity in Congress as lawmakers disclosure their finances; KBR can't decide if it's "Support the Troops" or "All for the Ca$h;" McCain's soft-money cash cow is called what again; and William Jefferson starts to pay back a loan to businessman who is currently a government witness against him. If you work for the Army, don't do your job, it could get you fired. This is today's news:

Yesterday, lawmakers on Capitol Hill disclosed their personal finances to the public highlighting recent news stories and controversies. At least a dozen lawmakers report loans from Countrywide on their personal financial disclosure forms. Last year, nine lawmakers reported loans from the mortgage giant currently embroiled in a Justice Department probe and a congressional influence scandal. There is no implication of wrongdoing on their part. Tardiness consistently plagues the financial disclosure process. This year, sixty-six lawmakers in the House failed to disclose on time. Meanwhile, the economic downturn hit some lawmaker finances hard. Both Nancy Pelosi and Rahm Emanuel lost millions of dollars as the market dropped. Harry Reid and Mitch McConnell, however, both grew their personal fortunes. (Check out previous personal finance data at Fortune 535 or Open Secrets.)

An Army contracting officer reports that he was fired in 2004 for refusing to approve $1 billion in questionable charges from KBR, the defense contractor providing food and housing for Army troops in Iraq. The inspector general for Iraq reconstruction reported last year that KBR was using improper procedures and failed to keep appropriate records. When the officer told KBR that he would withhold payment the contractor replied that if they were not paid for the questionable charges they would "reduce payments to subcontractors, which in turn would cut back on services." It's nice to know that our contractors use our countries soldiers as a chit in a game to make more loot.

A non-profit headed by allies and former staffers of Sen. John McCain repeatedly accepted large soft money contributions from corporations with business before the Senate Commerce Committee, which McCain chaired at the time. The Reform Institute (that's the actual name) pushed issues like campaign finance reform and largely mirrored the efforts of McCain.

Rep. William Jefferson is finally paying back a loan to a businessman who is currently a government witness against the embattled New Orleans lawmaker. No word on the temperature of the money used to pay back the loan.

Sen. Kent Conrad's mea culpa; 2008 Beijing Olympics received a helping hand from the Hammer; and Rep. James Clyburn's family friendly earmarks.

Kent Conrad sought to assuage critics as more information was revealed about preferential loans he and Sen. Chris Dodd received from Countrywide Financial. The Washington Post reported on Saturday that Conrad, after receiving Countrywide CEO Angelo Mozilo's phone number from ex-Veep vetter Jim Johnson, called Mozilo to directly ask for a loan. How could you not expect preferential treatment when your loan officer is the CEO? In response to the continued criticism and coverage, Conrad declared that he would refinance his loan and donate the estimated amount he saved - $10,500 - to Habitat for Humanity. Conrad has also called on the Senate Ethics Committee to investigate both his and Sen. Dodd's mortgages.

In 2001, Tom DeLay was at the height of power in Republican politics, cutting deals with energy interests, Jack Abramoff, and countless others. DeLay also happened to work with a major Republican contributor in his dealings with the popular conservative bugaboo of 2001: China. During court proceedings into Republican contributor Sheldon Adelson's bid to build casinos in Macau, the billionaire casino mogul revealed that he personally called up then-Majority Leader Tom DeLay to ask him to kill a House measure opposing the awarding of the 2008 Olympics to Beijing as it would help him secure Chinese support for his business venture. DeLay, a cosponsor of the anti-Beijing resolution, consulted with other Republican leaders before telling Adelson he needn't worry about the measure. Days before the International Olympic Committee was to vote on the host city for the 2008 Olympics, the measure disappeared from the House agenda. Adelson subsequently won support from the Chinese government, which intervened to help his bid in Macau at least twice, and Beijing won the 2008 Olympics.

Rep. James Clyburn of South Carolina is found to be earmarking money to projects that employ at least four of his family members and to other projects run by or employing former staffers.

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Countrywide is on your side; OMG!, Congress is still earmarking; and the Waxman committee officially approves of the White House-Abramoff report. The power's out in D.C., but we still have news:

Sen. Barack Obama's VP vetter Jim Johnson resigned his post after it was revealed that he received favorable loans from Countrywide while he served as the head of home loan giant Fannie Mae. The Countrywide scandal spread to the United States Senate today as it was revealed that Sens. Chris Dodd, chairman of the Banking Committee, and Kent Conrad, chairman of the Budget Committee, received the same favorable loans from Countrywide. Dodd and Conrad were listed as "Friends of Angelo," after Countrywide's CEO Angelo Mozilo, and "received better deals than those available to ordinary borrowers." It is unclear whether Dodd and Conrad were aware of the special treatment as "Friends of Angelo," "weren’t told exactly how many points were waived on their loans," unless they asked. Both Senators deny knowledge of their special treatment. Also receiving favorable loans were former HHS Secretary Donna Shalala, former UN Ambassador Richard Holbrooke, and former HUD Secretary Alphonso Jackson.

One year after seriously cutting back on earmarking, Congress is indulging in an election year pork roast. My personal favorite earmark listed in the article: an indoor small-arms range in Connecticut. (When will they subsidize arms ranges like this one.) The biggest increase in earmarks appears to be in the Defense Appropriations. The House authorization bill alone increased earmarks by 29% from last year's bill.

By a voice vote, the House Committee on Oversight and Government Reform approved their report on the ties between the White House and Jack Abramoff. Chairman Henry Waxman said, "We haven’t always agreed on the significance of the facts we have learned, but we have agreed that we should report the facts fairly and accurately to Congress and the public."

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