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Mortgage Probe Ensnares GOP

Tom Williams/CQ Roll Call File Photo
House Oversight and Government Reform Chairman Darrell Issa is treading on politically perilous ground as he vows to continue a probe that has now identified three House Republicans.

Issa has aggressively probed the Countrywide program, which allegedly offered Members discounts on mortgages as a way to curry favor, since his time as ranking member of the panel in the last Congress.

Previously, Towns, Senate Budget Chairman Kent Conrad (D-N.D.) and former Senate Banking Chairman Chris Dodd (D-Conn.) insisted they did not receive preferential treatment or were not aware of such treatment if they did. The Senate Ethics Committee in August 2009 concluded that there was "no credible evidence" that Conrad and Dodd had knowingly participated in a loan program not available to the public.

Still, Issa has blasted the Countrywide program as "influence buying" and "public corruption."

On Jan. 4, 2011, Issa said, "Countrywide has basically bribed, through their VIP program, they bribed huge amounts of people" in an interview on Fox News, according to a timeline of his statements on the issue provided by Democrats.

At a September 2009 hearing, Issa said the matter was important enough to require investigation by the Oversight Committee beyond any reviews by the House and Senate ethics panels.

Before Issa vowed Tuesday to keep investigating, Cummings sent a letter to the chairman asking how he planned to proceed, given the reports about McKeon and Gallegly. In the letter, Cummings asked whether Issa planned to publicly identify the lawmakers in question and how he intended to proceed with scheduled interviews of Countrywide officials because he also asked the House Ethics Committee to open its own inquiry in December.

Cummings opposed a subpoena issued by Issa that revealed the four Members received VIP loans, questioning in a Feb. 24, 2011, letter whether the committee was "targeting Members of Congress" in its investigation.

Though McKeon and Gallegly have denied any knowledge of being in the program, Cummings referenced subpoenaed documents that contain correspondence between McKeon and Countrywide employees that directly mention the VIP program.

"A follow-up letter sent to Chairman McKeon provided forms for him to sign and stated: 'Thank you for allowing COUNTRYWIDE's VIP TEAM to assist you with your financing needs on the above referenced property,'" Cummings wrote.

Other documents indicated McKeon was referred to the mortgage discount program by Michael J. Ferrell, who was then the head lobbyist at the Mortgage Bankers Association of America and had orchestrated the group's effort to block higher fees on mortgage lenders.

McKeon appears to have received a Countrywide mortgage for $315,000, and Mozilo instructed the individual handling his loan to "take off 1 point, no garbage fees, approve the loan and make it a no doc," according to documents reviewed by Cummings.

Issa has two interviews scheduled this week with the Countrywide employees who processed McKeon's loan.

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