The former Countrywide Financial Corp., which is now owned by Bank of America (NYSE:BAC), has its VIP program under increasing scrutiny as the House Oversight and Government Reform Committee has issued subpoenas for the bank to provide information in regard to possible conflicts of interest for people in positions of power, especially politicians, who may have received special treatment in exchange for public policy decisions which would benefit Countrywide.
According to Rep. Edolphus Towns (D-N.Y.), chairman of the House Oversight and Government Reform Committee, the subpoenas were issued on Friday. Although the Countrywide probe is of major significance because of the possible buying of political favors, it is only a part of a much large investigation into the possible use of “deceptive and predatory lending practices, or improper tactics to thwart regulation,” said Towns.
Other financial institutions being queried in the overall, general probe are GMAC’s Residential Capital, JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc. (NYSE:C), U.S Bancorp (NYSE:USB) and Wells Fargo (NYSE:WFC).
Other problems are Towns himself has taken out a loan from Countrywide, although it isn’t known at this time whether it was under the VIP program or not.
The leading Republican on the House Oversight and Government Reform Committee, Rep. Darrell Issa (R-Vista), has been pressing the issue the hardest concerning investigating the VIP program, saying they “orchestrated a deliberate and calculated effort to buy powerful friends for the purpose of using these relationships to manipulate public policy and further their bottom line.”
Some of this has taken a somewhat humorous tone, as the Democrats were charged by the Republicans with locking them out of the panel’s hearing room this week over the issue, which unfortunately has taken on a partisan tension because the primary recipients of the Countrywide VIP program as it relates to politicians has been Democrats. But that’s not the fault of anyone involved in the proceedings, and really shouldn’t have ever been a factor in investigating the potential ethics violations.
Republicans have charged Towns with dragging his feet on this investigation for no other reason than the Democrats who had participated in the program; a reasonable conclusion.
If the investigation shows there were special benefits offered to Congressional members under the Countrywide VIP program, Towns said they would be referred to the House Ethics Committee.