chris dodd full of crap

REVIEW & OUTLOOK (Editorial)
Dodd of Indignation
635 words
30 January 2009
The Wall Street Journal
A12
English
(Copyright (c) 2009, Dow Jones & Company, Inc.)

Senate Banking Chairman Chris Dodd has been in typically indignant form this week, opining on the financial crisis. Before his Tuesday hearing on Bernard Madoff, he demanded that regulators get to the bottom of any crime: "American investors deserve an explanation and the responsible parties must be held accountable!" And yesterday the Connecticut Senator denounced Wall Street bonuses and said, "I am urging -- in fact, not urging, demanding -- that the Treasury Department figures out some way to get the money back."

Pardon us, Senator, but how about taking your own advice?

We refer to his promise to release mortgage documents for the two properties that he and his wife refinanced with Countrywide Financial in 2003. In June a former Countrywide loan officer charged that Mr. Dodd received preferential rates and had fees waived on those loans as part of a VIP program the company had for "friends" of the company's then-CEO Angelo Mozilo. Mr. Dodd first issued a denial and then, days later, acknowledged that he was a "VIP" with Countrywide but said he thought it was "more of a courtesy." In late June he pledged to make all pertinent documents public "at some point." We're still waiting.

Increasing accountability is critical to rebuilding public trust in the financial system, as the Senator keeps telling us. Countrywide was one of the most irresponsible lenders in the subprime frenzy but it did not act alone. One reason it could pump out so much bad paper is because Fannie Mae and Freddie Mac were around to buy it and then resell it with a taxpayer guarantee. Messrs. Dodd and Mozilo were two of Fan and Fred's biggest supporters, with Mr. Dodd playing a role in pushing the companies to take on "affordable housing" loans from outfits like Countrywide.

Perhaps Connecticut's longest serving Senator was bamboozled by Mr. Mozilo and used bad judgment in backing the reckless lender. But loan officer Robert Feinberg, who oversaw Countrywide's VIP program, says Mr. Dodd knew he was getting favors from Mr. Mozilo. Mr. Feinberg says his job was to remind beneficiaries at every step of the process that they were getting a special deal because they were "Friends of Angelo." If true, it would mean that the Senator had a clear conflict of interest as a legislator promoting the business of a company doing him personal favors. Recall the Ted Stevens precedent.

The way to clear this up is to see all the documents and get Mr. Dodd to explain what happened, preferably under oath. But Mr. Dodd has been stonewalling. In July he said he would release the documents after President Bush signed the first housing bailout bill. Nothing. Then in October he said he wanted to wait until the Senate Ethics Committee completed its investigation.

That could take a while. On July 28 Ethics Chairman Barbara Boxer (D., Calif.) and Vice Chairman John Cornyn (R. Texas) issued a press release that explained "it has been the long-standing policy of the committee to defer investigation into matters where there is an active and ongoing criminal investigation and proceeding so as not to interfere in that process."

Earlier this month, Mr. Dodd's office confirmed that the law firm Perkins Coie has provided "ethics advice" to him, and we can't help but wonder what that entailed. The delay at the Ethics Committee in no way impedes Mr. Dodd from honoring his disclosure pledge. It's in his political interest to do so, assuming he has nothing to hide. A recent Quinnipiac poll showed his approval rating down to an all-time low of 47%. Rare is the politician who could clear his name overnight and chooses not to.