WASHINGTON — One day in 2002, at a time when the sub-prime loan debacle and the collapse of the housing market were not even clouds on the economic horizon, Angelo Mozilo, head of Countrywide Financial Corp., unexpectedly ended up on the telephone with a member of the Senate Finance Committee, Kent Conrad of North Dakota.
The senator had called a friend for advice on lining up $1.16 million to buy a place on the Atlantic coast. Mozilo happened at the time to be with Conrad's friend, who put the senator on the phone with Mozilo, Conrad recalled.
The Finance Committee deals with tax policy and other matters affecting the financial services industry. And Mozilo was in a perfect position to help the senator: Countrywide, the nation's largest mortgage company, whose lending practices are the subject of a government investigation, had a VIP program whose beneficiaries included politicians whose goodwill the firm wanted to court.
Conrad, now chairman of the Senate Budget Committee, says he knew nothing about the program, which reportedly was known inside the Calabasas-based company as "Friends of Angelo."
But campaign finance reports, lobbying records and other evidence show that Countrywide avidly played the Washington-insider game. The company employed a small army of lobbyists to represent its interests in Congress and elsewhere in the government at a cost of nearly $4 million over the last three years. It also contributed tens of thousands of dollars to the campaigns of senators and representatives.
And it wrote mortgages for "VIPs," sometimes shaving a loan's interest rate or reducing fees, a former high-ranking Countrywide executive said.
Conrad got a Countrywide loan on his beach house after talking to Mozilo. Sen. Chris Dodd of Connecticut got two loans. California Sen. Barbara Boxer also borrowed from Countrywide on two occasions. All said they believed they received no special treatment. But business magazine Conde Nast Portfolio, which reported the Dodd and Conrad transactions this week, said both senators benefited from special terms. The magazine cited company documents.
Congressional financial disclosure records, which do not require disclosure of all loans, show at least 10 other members of the House and Senate reported getting mortgages from Countrywide over the years.
