Chris Dodd

Sweetheart Mortgages: Ethics Panel Clears Dodd, Conrad

Rachel Slajda | August 7, 2009, 5:18PM

A Senate ethics panel today told Sens. Chris Dodd (D-CT) and Kent Conrad (D-ND) it found "no substantial credible evidence" they broke Senate rules with their Countrywide mortgages.

In letters to each senator, the Select Committee on Ethics said the two should have been more "vigilant" to avoid the appearance of receiving preferential treatment and rates.

After reviewing 18,000 pages of documents, the committee found that Countrywide's VIP program for friends of ex-CEO Angelo Mozilo offered expedited service and some discounts. But, since the discounted rates still weren't the best at Countrywide or in the industry, the program doesn't violate Senate rules, the committee found.

AIG

Who Asked Senator Dodd To Defang Anti-Bonus Provision?

Justin Elliott | March 18, 2009, 7:23PM

Who in the Obama Administration pushed to weaken a key anti-bonus provision in the stimulus bill last month? Sen. Chris Dodd, who wrote the provision -- and ultimately agreed to defang it -- isn't saying.

Ever since the AIG story broke, we've heard about the company's binding contracts as a key barrier to the government blocking bonuses to AIG executives.

It turns out that a provision in the stimulus, which passed in February, prohibits the government from blocking any bonuses that were part of contracts agreed to before February 11. That provision has taken on new relevance this week because it would complicate any government effort to claw back the AIG bonuses.

Read more »

Chris Dodd

Cuomo's Office Looking At Several Fixes For Merrill Bonuses

Zachary Roth | January 30, 2009, 2:06PM

As we told you earlier today, Bloomberg reported last night:

New York Attorney General Andrew Cuomo may demand the return of $4 billion in bonuses paid by Merrill Lynch & Co. just before it was acquired by Bank of America Corp.

But it turns out that may overstate the case a bit. A person familiar with the matter told TPMmuckraker that the investigation is considering several other possible remedies, including imposing fines and alleging violations of securities law -- as the Wall Street Journal reported yesterday.

The probe of Merill is still at an early stage. Depositions haven't yet been taken from former Merrill CEO John Thain, and Bank of America chief administrative officer J. Steele Alphin, both of whom have been subpoenaed to give investigators details on just when Bank of America learned about the bonuses, and about Merrill's massive fourth quarter losses.

If Cuomo doesn't try to get the money back, Congress might. Chris Dodd, who chairs the Senate Banking committee, declared at a press conference yesterday:

I'm going to be urging -- in fact not urging, demanding -- that the Treasury Department figures out some way to get the money back.

Barack Obama

Obama's SEC Nominee Headed For Bumpy Confirmation Hearing?

Zachary Roth | January 12, 2009, 11:43AM

When Mary Schapiro was announced as Obama's pick for SEC chair, she was warmly received, in general, as someone likely to restore the agency's regulatory teeth after the free-market ideologues who ran the place under Bush.

But it looks Schapiro's confirmation hearings, set to begin this week, may not go perfectly smoothly all the same.

Schapiro heads the Financial Industry Regulatory Authority, the non-governmental body that supervises oversees U.S. brokerages. And as we noted last week, Finra, under Schapiro, failed to catch Bernard Madoff's alleged "$50 billion ponzi scheme". Indeed, it conducted an inquiry into Madoff's operation that concluded, in 2007, that he had violated certain technical rules and had failed to promptly report some transactions, but identified no more serious wrong-doing -- a very similar story to the SEC's.

Still, it's also worth pointing out that Finra's investigation into Madoff was focused on his brokerage operation, which, according to a Finra spokeswoman, is all that it is legal empowered to look into. Madoff's business was split into brokerage and investment-advisory arms -- but the alleged fraud, investigators believe, was centered on the investment-advisory arm. So Finra would appear to bear less responsibility than SEC for missing Madoff.

But that's not the only potential confirmation headache for Schapiro. She was accused in two recent lawsuits of making misleading statements in an effort to build support for the creation of Finra, which was created two years ago by merging the regulatory units of the NYSE and the Nasdaq. Schapiro headed the Nasdaq regulator at the time, and became the head of Finra, seeing her yearly salary rise from $2 million to $3.1 million.

The New York Times explains the details:

Among the misstatements that she is accused of making is that the Internal Revenue Service had prohibited the NASD from paying each member more than $35,000 as part of the merger deal. Although an NASD proxy statement issued while the deal was pending said that the I.R.S. would not permit the organization to give more compensation to members, the I.R.S. did not actually issue a ruling on the matter until March 2007, long after the deal closed and three months after the members voted to approve it.

The first lawsuit was rejected by a Federal judge but is on appeal. The second suit, which is similar and was brought by a former SEC lawyer, appears to have been filed soon after Schapiro was nominated to head the SEC, though lawyers for the plaintiffs say it was in the works before then.

Looks like those hearings could be more lively than we thought. We'll be watching closely later this week...

Bailout

Source: Senators Assume Bunning Placed Hold On Barofsky Nomination

Zachary Roth | December 4, 2008, 3:54PM

A Senate staffer has confirmed to TPMmuckraker that the hold placed on the nomination of Neil Barofsky to be inspector general for the bailout has now been removed.

Politico had reported the removal of the hold earlier today, as we noted.

So now the focus is squarely on the identity of the GOP senator who placed the hold. And it now seems pretty clear, as we suspected from the start, that it was Jim Bunning of Kentucky.

According to the Senate staffer we spoke to, senators are working on the assumption that Bunning was responsible. And the staffer described a highly semantic argument that a Bunning aide made when asked about the issue, which would appear to only add to the evidence that Bunning was responsible.

The staffer said that a Bunning aide, speaking to an aide to another senator, tried to make the argument that technically, no hold had been placed, because there had been no request for unanimous consent on the floor of the Senate. A "UC request" would need to be made before calling for a voice vote on the issue, and it's at that point that the hold would officially go into effect. But in this case, Chris Dodd, the chair of the banking committee, had already been informed by the GOP cloakroom that one GOP senator wanted a hold put on -- which was what prompted Dodd to issue the statement that first revealed the existence of the hold.

The culprit is under no obligation, the Senate staffer said, to ever come clean. So we may never get official confirmation -- and the more important fact is that a vote on Barofsky's nomination is now set to proceed, probably by tomorrow, according to the staffer.

But at this point, the mystery seems all but cleared up.

Bailout

Unnamed GOP Senator Blocking Appointment Of Key Bailout Overseer

Zachary Roth | November 28, 2008, 12:52PM

Here's an interesting nugget in Congress's response to the financial crisis that hasn't received as much attention as it deserves.

Earlier this month, the Bush administration nominated Neil Barofsky, a federal prosecutor, to be the Treasury Department's special inspector general on the bailout program. That's a crucial post, given the astronomical sums at issue, the broad authority that Treasury has been given to distribute them, the concerns that have been raised about possible conflicts of interest, and the general urgency of our efforts to prevent an economic collapse.

So you'd think Congress would be doing everything it could to get Barofsky confirmed right away. You'd be wrong.

Last week, Sen. Chris Dodd, the Connecticut Democrat who chairs the banking committee, issued a little-noticed statement saying that although the nomination "was cleared by members of the Senate Banking Committee, the leadership of the Senate Committee on Homeland Security and Governmental Affairs, and all Democratic Senators," it was "blocked on the floor by at least one Republican member." (itals ours.)

Senate rules allow any senator to anonymously block a vote on confirmation to any federal post, for any reason.

The rationale for the move remains unclear. But a Washington Post story from a few days before Dodd's statement offers two suggestions. It notes that Barofsky supported Barack Obama, and describes an unresolved "battle between the Finance and Banking committees over which has jurisdiction over the confirmation process."

Blocking an urgent nomination because the nominee, like 52 percent of voters, supported Obama seems petty even by contemporary GOP standards. But a congressional turf war over jurisdiction seems only slightly less so. So either of these two explanations would be a pretty damning indictment of Congress's response to the crisis.

We'll keep you posted as we dig into this...

Countrywide

Dodd Thought "VIP" Status was "Just A Courtesy"

Andrew Tilghman | June 18, 2008, 12:39PM

Senators Chris Dodd (D-CT) and Kent Conrad (D-ND) are still fending off questions about special-rate loans they received from Countrywide Financial.

Countrywide's been at the center of the mortgage meltdown, and the GOP is cranking up the pressure on the two Democratic lawmakers.

Dodd told reporters yesterday that a loan officer specifically told him and his wife they were getting "VIP" consideration in 2003 when they took out two loans on their Connecticut home and Capitol Hill townhouse.

But Dodd said he didn't think to ask precisely what that meant. Even though he is chairman of the Senate Banking Committee, which oversees the mortgage industry, Dodd said he "assumed" that "it was more of a courtesy thing."

From the New York Times.

"Somebody told you you were in a V.I.P. program," a reporter said, "And you didn't think you were getting ... "

Mr. Dodd cut off the reporter and finished the question himself. "A special deal on a loan?" the senator asked. "No."

According to Portfolio, which broke the story last week, the lower rates Dodd received saved him "about $58,000 on his Washington residence over the life of the loan, and $17,000 on the Connecticut home."

Calculating the exact benefit is a challenge, and some suggest Dodd's perk was far less. The Washington Post reports:

Dodd borrowed $506,000 at 4.25 percent to refinance a Capitol Hill townhouse, originally purchased in 1999, and $275,042 at 4.5 percent to refinance a home in East Haddam, Conn.

Rather than requiring him to pay the full amount to obtain the reduced mortgage rates, as other customers must, Countrywide waived three-eighths of a point, or about $2,000, on the first loan and a quarter-point, or $700, on the second.

Meanwhile, Sen. Conrad has moved quickly to quell the criticism. Through the special program -- known as the "F-O-A program", or "Friends of Angelo, named for Countrywide CEO Angelo Mozilo -- Conrad got a good deal on loans for both a Delaware beach vacation home as well as an eight-unit investment property he owns in Bismarck with his brothers.

Conrad said he gave $10,700 to Habitat for Humanity to compensate for any benefit he may have received on the vacation home loan. And this week, he said, he paid off the final $32,000 on the investment property.

Conrad spoke to Mozilo about his mortgage in 2002, but the deals under scrutiny were not finalized until 2004. Yet like Dodd, Conrad also said he was unaware of any discount. "I had absolutely no clue they had done that," he said yesterday.

"My conscience is absolutely clear," he told the Times.