EDITORIAL: Ethics probe needed of Dodd's loans: Senator charged with oversight of banking got break on mortgages.

Jun 17, 2008 (New Haven Register - McClatchy-Tribune Information Services via COMTEX) -- CFC | Quote | Chart | News | PowerRating -- U.S. Sen. Christopher J. Dodd, DConn., got breaks on two mortgages from Countrywide Financial in 2003 that weren't available to the ordinary applicant. In addition to a discount on mortgage points charged, he got lower interest rates on the mortgages for his homes in East Haddam and Washington, D.C., that may save him as much as $75,000 over their 30-year terms.

Dodd got the breaks through a program at Countrywide for the powerful and influential, known within the company as Friends of Angelo, because it was overseen by Angelo Mozilo, Countrywide's chairman and chief executive officer.

Dodd got far better treatment than another Countrywide customer whose request for refinancing Mozilo described as "disgusting" in a May e-mail that accidentally became public.

Countrywide, one of the country's main issuers of mortgages, is among the companies that critics, including Dodd, have charged with issuing loans that it knew its customers could not afford.

Another recipient of the Friends of Angelo program, a campaign adviser to U.S. Sen. Barack Obama, D-Ill., has resigned to avoid embarrassment to Obama's presidential campaign.

The loans are an ethical problem for Dodd, who is chairman of the Senate Banking Committee. The claims by Dodd's office that he had not sought special treatment appear to be contradicted by the favorable terms of the loans.

A former employee said people who received the loans were told they were receiving a discount and that the rates were personally set by Mozilo.

Senate rules prohibit gifts of $100 or more from companies that lobby Congress. Federal law bars workers from accepting gifts offered because of their position. Countrywide's ethics code prohibits gifts intended to influence decisions of government officials.

The Senate should conduct an ethics investigation of Dodd's acceptance of the Countrywide loans.

Dodd's office contends the senator was unaware that his loans received special treatment. As a member of the Senate committee charged with overseeing mortgage companies such as Countrywide, Dodd should have taken extra care.

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