Countrywide Financial political loan scandal
| Industry | Financial services |
|---|---|
| Founder | Angelo Mozilo |
Key people | Angelo Mozilo (CEO) |
| Products | Mortgages, loans |
The Countrywide Financial political loan controversy during 2008-2009 centered on U.S. lawmakers obtaining preferential mortgage terms from Countrywide Financial through a special initiative known as "FOA's" ("Friends of Angelo"), named after CEO Angelo Mozilo. Prominent recipients included Senate Banking Committee Chair Christopher Dodd (D-CT) and Senate Budget Committee Chair Kent Conrad (D-ND). Additionally, Countrywide's political action committee contributed significantly to Dodd's electoral campaigns. The highest campaign donation went to Rep. Ed Royce (R-CA), who received $37,500 since 1989. Dodd supported federal efforts, particularly through the Federal Housing Administration, to guarantee up to $300 billion in refinanced loans aimed at aiding homeowners in financial distress.
The Wall Street Journal disclosed that former Fannie Mae CEOs Franklin Raines and James A. Johnson—who served as an advisor to then-Democratic presidential hopeful Barack Obama—were also recipients of loans from Countrywide. While Raines was approached by Obama's team for guidance on housing policy, both individuals have denied holding any advisory positions.
On June 18, 2008, a Congressional ethics committee initiated an inquiry into claims that Senators Dodd and Conrad benefited from favorable loan arrangements provided by the struggling lender Countrywide Financial Corp. Dodd encountered criticism from Connecticut-based media outlets and political rivals due to his involvement. The organization Citizens Against Government Waste designated him as the June 2008 "Porker of the Month" for accepting advantageous mortgage terms while advocating legislation that benefited Countrywide.
On January 6, 2010, Dodd announced he would not pursue re-election. Subsequently, on January 18, 2011, Conrad revealed his decision to retire instead of running in the 2012 elections.
See also
- Friends of Angelo program