Dodd and Conrad Linked to Countrywide Lending Scandal
Last week, former Fanny Mae Chairman James Johnson was forced to resign
from Barack Obama's vice presidential vetting committee after it was revealed he
received preferential treatment from Countrywide Financial, a frequent target of
criticism by Obama on the campaign trail. Well it appears Johnson was just the
tip of the iceberg in the Countrywide scandal.
Since 06-21-08
June 20, 2008
From the Desk of Judicial Watch President Tom Fitton:
Dodd, Conrad Linked to Countrywide Lending Scandal
Last week, former Fanny Mae Chairman James Johnson was forced to resign from Barack Obama's vice presidential vetting committee after it was revealed he received preferential treatment from Countrywide Financial, a frequent target of criticism by Obama on the campaign trail. Well it appears Johnson was just the tip of the iceberg in the Countrywide scandal.
This according to Portfolio, which broke the story:"Two U.S. senators, two former Cabinet members, and a former ambassador to the United Nations received loans from Countrywide Financial through a little-known program that waived points, lender fees, and company borrowing rules for prominent people.Dodd admitted Wednesday that he was told in 2003 when he refinanced two properties that he was being placed in Countrywide's "VIP Program," but said he believed this was simply a courtesy that had nothing to do with his position in the U.S. Senate. This is either a blatant lie or horribly naïve for a man who has served in the Senate for more than 25 years and currently chairs the Senate Banking Committee that regulates the mortgage industry.
Senators Christopher Dodd, Democrat from Connecticut and chairman of the Banking Committee, and Kent Conrad, Democrat from North Dakota, chairman of the Budget Committee and a member of the Finance Committee, refinanced properties through Countrywide's 'V.I.P.' program in 2003 and 2004, according to company documents and emails and a former employee familiar with the loans."
It is important to note that Dodd received other "courtesies" from Countrywide. He is the Senate's leading recipient of campaign contributions from the mortgage lender, and received $15,000 for his 2008 presidential campaign from the company.
Conrad, meanwhile, says that he "unknowingly" received preferential treatment from Countrywide, but that he did nothing "untoward." (Hard to believe, given that the North Dakota Senator received his loan terms following a conversation with Countrywide Chief Executive Angelo Mozilo set up by none other than James Johnson.)
If these charges prove to be true, the preferential loan rates received by Dodd and Conrad may represent illegal and unethical gifts. "The Senate ethics committee has begun looking into the matter," according to Bloomberg. Rest assured we'll be monitoring these proceedings (which I'm sure will be sham) and will seek criminal investigations as appropriate.
Judicial Watch Files Amicus Brief in Support of Open Government
An important lawsuit is working its way through the courts that could have a dramatic impact on the Freedom of Information Act and the public's ability to force the release of government documents. Judicial Watch recently filed an amicus curiae brief in the lawsuit. (Check it out here.)
Consumers' Checkbook filed the lawsuit against the Department of Health and Human Services (HHS) after the agency stonewalled a request seeking information from physician claims paid by Medicare in four states and the District of Columbia. Consumers' Checkbook intends to provide the information to the public free of charge so consumers can make better healthcare decisions. The data could also help uncover fraud in the Medicare system, a persistent problem in that Big Government program. A District Court ruled that HHS must provide the unredacted data, prompting HHS to appeal.
Here's the issue in a nutshell. (Bear with me, as this gets a bit technical.)
When crafting FOIA, Congress created an exemption (Exemption 6), which allows the government to withhold personnel and medical files if their disclosure would represent a "clearly unwarranted invasion of personal privacy." So, how do the courts determine whether or not Exemption 6 is applicable? They carefully balance the potential harm to privacy if the records are released against the public interest in disclosure. If the public interest outweighs privacy concerns, then the documents are released, and vice versa.
HHS is seeking to tip the balance in favor of privacy by eliminating a key factor in assessing the public interest in disclosure, known as "derivative use."
By considering the "derivative use" of the documents, the courts analyze not only the public interest in the specific records, but also how the records may be used to benefit the public interest. (In the case of Consumers' Checkbook, for example, the organization intends to pool the Medicare data they obtain from HHS with data from insurance providers to provide a comprehensive assessment tool for healthcare consumers.)
Obviously, Judicial Watch argued against HHS' misuse of Exemption 6 and in favor of disclosure. Here's an excerpt from our brief:"Considering 'derivate uses' of information is entirely consistent with FOIA's basic purpose of informing the public 'what the government is up to.' Although information disclosed under FOIA may, on its face, reveal 'what the government is up to,' more often than not the information is a missing piece of a larger puzzle that, when combined with other sources of information, exposes governmental inefficiency or impropriety...If the information is not released, the true nature of the government's activities may never be known."Keeping the government open is an ongoing battle.. We began our fight 14 years ago against the terribly corrupt Clinton administration. Our legal battles continued through 8 years of a Bush administration that is outright hostile to open government. And it is certain that we will have to fight either an Obama or McCain administration on the important issue of allowing the people access to information about their government.
I'll keep you posted as this lawsuit moves forward.
Until next week...
Tom Fitton
President
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