A leading House Republican called Monday for hearings to determine which lawmakers received discount mortgage deals from Countrywide Financial Corp., but his colleagues in the House and the Senate don’t seem particularly eager to start turning over rocks.
In the wake of reports that Sens. Chris Dodd (D-Conn.) and Kent Conrad (D-N.D.) received special VIP discounts on Countrywide mortgages, Texas Republican Rep. Jeb Hensarling said Monday that he wants to know which members of Congress “might be knowingly or unknowingly receiving preferential treatment while millions of hardworking Americans struggle to repay their mortgage debts and cope with $4-a-gallon gasoline and soaring food prices.”
In what looks to be a rough election cycle for Republicans, a Democratic-focused mortgage scandal could be just the break the GOP needs. But no other Republican leader jumped on Hensarling’s bandwagon Monday, and aides said they were reluctant to push forward with a probe because they didn’t know what it might reveal.
“You have to be very careful about opening Pandora’s box,” said one House GOP aide. “We could use it [politically], but we’d have to do due diligence on our side.”
Added a Senate GOP aide: “You don’t see many people jumping on this, because you don’t know if anyone else is dirty.”
A spokesman for Senate Majority Leader Harry Reid (D-Nev.) declined to comment on Hensarling’s idea Monday, saying it was up to individual senators to respond.
Countrywide is the nation’s largest mortgage lender; as such, it’s likely that it provided the home financing for numerous members of the House and Senate.
On financial disclosure forms released Monday, House Republican Conference Chairman Adam Putnam (R-Fla.) revealed that Countrywide holds the mortgage on his Washington town house. An aide said Putnam got the mortgage just like any other consumer would: “by calling the 1-800 number and working with the operator for an hour and a half.”
Conrad, by contrast, has acknowledged calling Countrywide CEO Angelo Mozilo when he needed a loan for a Delaware beach house in 2002. But both Conrad and Dodd have said they did not request — and did not know that they’d received — lower than usual rates on the mortgages they received from Countrywide.
Conrad spokesman Sean Neary said Monday the senator welcomes an ethics investigation because he did nothing wrong.
For Dodd, however, the situation is somewhat more complicated.
As chairman of the Senate Banking, Housing and Urban Affairs Committee, he’s the Democrats’ sometimes reluctant point man on the subprime mortgage and housing crises.
Dodd convened a summit on the emerging mortgage crisis in April 2007 but announced that he wasn’t “overly anxious to legislate. … We think there may be enough laws on the books.”
While his House counterpart, Rep. Barney Frank (D-Mass.), plunged ahead with ambitious legislative remedies, Dodd turned his attention toward his ultimately unsuccessful run for the Democratic presidential nomination. As a candidate, he further irked housing advocates by collecting millions of dollars in political contributions from subprime lenders, investors and the real estate sector.
Now Dodd is trying to negotiate a major housing bill while his own mortgage is under scrutiny. Senate Democratic leadership could decide that debating the bill — which faces a veto threat from the president — isn’t worth the additional attention it will bring to the Countrywide imbroglio, but Democratic aides say they still expect the bill to make it to the floor later this week.
In the House, Democratic leaders have made no commitments on Hensarling’s request for hearings. A spokesman for Frank said the Financial Services Committee chairman is “not inclined to jump on this — he&rsqo;s focused on legislation and will leave issues like this to other oversight committees.”
The House has no oversight of senators’ ethics, but Hensarling — the chairman of the conservative Republican Study Committee — says a committee could look more generally into whether members of Congress have been receiving any special treatment from mortgage lenders.
National Republican Congressional Committee spokesman Ken Spain said he would be interested to see whether “House Democrats decide to ask some tough questions of their own members, or if they will just look the other way and provide those in their own party with the equivalent of a political bailout.”
“When it comes to addressing the mortgage crisis, it is safe to say that Democrats have defaulted on their credibility,” Spain said.
In keeping with their usual practice, staffers for the Senate Ethics Committee declined Monday to discuss any potential investigation.
Frustrated government watchdog groups say they don’t expect the ethics committee to act — and that it probably wouldn’t do more than admonish senators if it does.
“If it turns out there were any other members involved, this could become a very big issue,” said Melanie Sloan, executive director for Citizens for Responsibility and Ethics in Washington. “There is a responsibility of the Ethics Committee to look into this. … They should say, ‘We’re going to get to the bottom of this.’”
Victoria McGrane contributed to this story.