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Witness: Senators knew of VIP status

THE ASSOCIATED PRESS

Published: July 28, 2009

WASHINGTON

Despite their denials, influential Democratic Sens. Kent Conrad and Chris Dodd were told from the start they were getting VIP mortgage discounts from one of the nation's largest lenders, the official who handled their loans has told Congress in secret testimony.

Both senators have said that at the time the mortgages were being written they didn't know they were getting special deals from Countrywide Financial Corp., the company that went on to lose billions of dollars on home loans to credit-strapped borrowers. Dodd maintains that he got no preferential treatment.

Dodd got two Countrywide mortgages in 2003, refinancing his home in Connecticut and another residence in Washington. Conrad's two Countrywide mortgages in 2004 were for a beach house in Delaware and an eight-unit apartment building in Bismarck in his home state of North Dakota.

Robert Feinberg, who worked in the Countrywide's VIP section, told congressional investigators last month that the two senators were made aware that "who you know is basically how you're coming in here."

"You don't say ‘no' to the VIP," Feinberg told Republican investigators for the House Oversight and Government Reform Committee, according to a transcript obtained by The Associated Press.

The next day, Feinberg testified before the Senate Ethics Committee, an indication that the panel is actively investigating two of the chamber's more powerful members:

Dodd leads the Banking Committee and is a major player in two big areas: solving the housing foreclosure and financial crises and putting together an overhaul of the U.S. health-care system. Conrad is chairman of the Budget Committee. He, too, shares an important role in the health-care debate, as well as on legislation to curb global warming.

Asked by a House investigator if Conrad "was aware that he was getting preferential treatment?" Feinberg answered: "Yes, he was aware."

Referring to Dodd, the investigator asked:

"And do you know if during the course of your communications" with the senator or his wife "that you ever had an opportunity to share with them if they were getting special VIP treatment?"

"Yes, yes," Feinberg replied.

Bryan DeAngelis, Dodd's spokesman, said that Feinberg has repeatedly made allegations of special treatment that were not true.

Conrad's spokesman, Chris Gaddie, said yesterday that the senator "never asked for, expected or was aware of loans on any preferential terms" and has "worked overtime to set the record straight."