Testimony: Sens. Conrad, Dodd Told Of VIP Loans
STEVE INSKEEP, host:
Two Democratic senators have been caught up in the mortgage crisis. It's not that they're unable to pay. It's that they got these mortgages in the first place. A former loan officer says he told Senators Christopher Dodd and Kent Conrad that they were getting special VIP deals. NPR's David Welna reports on the differing accounts of the loan officer and the lawmakers.
DAVID WELNA: Bob Feinberg worked in the VIP section of the now sold-off mortgage lender Countrywide. He dealt with clients known by the company as FOAs, or Friends of Angelo, as in Angelo Mozilo, Countrywide's former high-rolling chief executive.
According to a transcript published this week by the Associated Press, Feinberg told House Republican investigators last month that Senators Dodd and Conrad were both FOAs. And he said he told them they were getting preferential treatment when they sought mortgages from Countrywide some six years ago. He repeated that charge the following day under oath to the Senate ethics committee.
Mr. ANTHONY SALERNO (Attorney): He told everybody in the program they were getting special deals.
WELNA: That's Anthony Salerno, the Los Angeles lawyer who represents Feinberg.
Mr. SALERNO: Bob's marching orders as doing what he was doing were to make absolutely certain that these people were being treated - not only were they given the, you know, the white glove treatment, but also that they were made very aware that they were getting special treatment.
He would be instructed to say things like this is special pricing from -whether it be Angelo or whoever it would be. The point of it was not only to give them special treatment but to let them know that they were getting special treatment. It was sort of a, you know, it was a way to curry favor with them.
Senator CHRISTOPHER DODD (Democrat, Connecticut): The notion somehow that this was a sweetheart deal is totally false.
WELNA: That's the chairman of the Senate Banking Committee, Christopher Dodd. Dodd did take out mortgages from Countrywide on his house in Washington, D.C. and on another in his home state of Connecticut. But he insists that despite Feinberg's allegations, he got no special treatment.
Senator DODD: Never offered, never accepted. Rates were standard market rates. No change in that. And this is just untrue. I've said it all the way along. He just keeps on repeating it.
WELNA: Dodd does concede that he and his wife were told the Countrywide loans they sought were coming from the firm's VIP section.
Senator DODD: Well, that we did, but they - we asked what it was. We were told it was nothing more than the courtesy stuff. It had nothing to do with anything.
WELNA: And Dodd dismisses Feinberg's recollections of the two of them talking.
Senator DODD: Incomprehensible in some ways. You know, I never talked to the guy. (Laughing)
WELNA: Feinberg's attorney, Anthony Salerno, says his client has a very different memory.
Mr. SALERNO: He definitely said he spoke to Senator Dodd. And he particularly remembers it because he said he couldn't finish the conversation because he had to go off and give a speech on the floor.
WELNA: Salerno, who's a criminal defense attorney, says the question of who spoke with whom may eventually get cleared up by recordings Countrywide made of every phone conversation. Meanwhile, Kent Conrad, who chairs the Senate Budget Committee, says it's already clear that the four loans he took out from Countrywide were simply good business deals.
Senator KENT CONRAD (Democrat, North Dakota): I've done nothing unethical, nothing. And I look forward to my chance to make my case before the ethics committee.
WELNA: Conrad only began dealing with Feinberg on the third loan he took out from Countrywide five years ago. He noticed something odd when that deal was closed.
Senator CONRAD: I got a packet back and it had VIP card stapled to it, which was a surprise to me. I had no idea I was in such a program. And I thought, well, this is like a frequent flyer program or, you know, I thought nothing of it.
WELNA: Countrywide had also waved a point from that loan. But Conrad says he was not told about it at the time. He's since refinanced with another company and donated what he saved on that Countrywide loan to charity.
David Welna, NPR News, the Capitol.