The U.S. House of Representatives just released (obviously without alacrity) its findings on Countrywide's bribing of its members and staff.
"Documents and testimony obtained by the committee show the VIP loan program was a tool used by Countrywide to build goodwill with lawmakers and other individuals positioned to benefit the company," the report said. "In the years that led up to the 2007 housing market decline, Countrywide VIPs were positioned to affect dozens of pieces of legislation that would have reformed Fannie" and its rival Freddie Mac, the committee said.
Some of the discounts were ordered personally by former Countrywide chief executive AngeloMozilo. Those recipients were known as "Friends of Angelo."
Well, yes, but there are still many other culprits in this mess. It's not just Countrywide that brought down the global financial system. Even still, it's good to see some effort to hold people accountable for their transgressions.
The Securities and Exchange Commission in October 2010 slapped Mozilo with a $22.5 million penalty to settle charges that he and two other former Countrywide executives misled investors as the subprime mortgage crisis began. Mozilo also was banned from ever again serving as an officer or director of a publicly traded company.
He also agreed to pay another $45 million to settle other violations for a total settlement of $67.5 million that was to be returned to investors who were harmed.
Not a bad investment. He made billions with his fraud and rent-seeking activity and had to repay only millions. It's punishment less severe than what these guys got. But no one has yet been punished for the bribing of lawmakers, including and especially the lawmakers.
But here's the puzzling part for me.
The standard discount was .5 waived points. Countrywide also waived junk fees that usually ranged from $350 to $400.
Fifty basis point discount!?! Waived fees totaling around $350 to $400?!? That's it? Wow, this just demonstrates that our members of Congress and their staff aren't high end call girls, they're just low rent prostitutes.
And people complain that there's too much money in politics. No, this proves that there's not enough money in politics, there's too much politics in money (i.e., our markets).
Comments