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Wall Street Journal Reporter Conceals Facts About The Real Countrywide Mortgage Scandal

By       Message David Fiderer     Permalink
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opednews.com Headlined to H2 9/29/09

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If actions speak louder than words, then Edolphus Towns never felt like a VIP at Countrywide Financial. In 2003 the Brooklyn congressman got two five-year adjustable rate mortgages, for his New York and Florida residences, from the nation's largest mortgage lender. But Towns never waited for the interest reset date. He dropped Countrywide and took all of his business somewhere else in 2005. Towns unwittingly undercut the story of Robert Feinberg, the so-called Countrywide VIP whistleblower who said that he and others did "whatever it takes" to keep the business of a "VIP."

To impugn Towns, John Emshwiller of The Wall Street Journal falsified some details in, "Key Lawmaker Received Countrywide Loans." Emshwiller claimed that Countrywide's VIP program "provided loans to public figures and other favored borrowers often at lower interest rates or with lower origination fees than were available to the general public." In fact, no one had ever alleged that VIPs customers got lower interest rates, only reduced fees. And no one had ever shown any evidence that those fees were lower than what was available elsewhere on the open market.

The entire premise of Emshwiller's story was discredited a few hours after it was published, when a unanimous Senate Ethics Committee announced the results of its exhaustive review of the Countrywide VIP program. In order "to ascertain how the VIP program worked" the Committee "took every possible step during the course of its year-long inquiry to obtain information from multiple sources, including issuing subpoenas for detailed contemporaneous documents and testimony," and "carefully reviewed more than 18,000 pages of documents from Countrywide and its former employees""

The Committee found that the VIP program was exactly what the senators under investigation, Christopher Dodd and Kent Conrad, said it was - a program that offered expedited service, and nothing else out of the ordinary:

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During the mortgage boom that occurred from late 2002 through 2004, the VIP loan unit handled thousands of loans worth billions of dollars for a very broad spectrum of individuals, large numbers of whom had never met, let alone befriended, [Countrywide CEO Angelo] Mozilo.

Overall it appears that the VIPs were often offered quicker, or more efficient loan processing and some discounts. However, it also appears that all VIP loans, including all [Friends of Angelo] loans, were required to meet the same underwriting standards and conditions for resale on the secondary market and non-VIP loans. Furthermore, there is evidence on the record that the discounts offered to VIPs and FOAs were not the best deals availble at Countrywide or in the marketplace at large. In sum, participation in the VIP or FOA programs did not necessarily mean that borrowers received the best financial deal available either from Countrywide or from other lenders. [Emphasis added.]

Once the Committee, comprised of equal numbers of Republicans and Democrats, had exonerated the senators, right wing smear artists selectively drew upon Emshwiller's reporting to fabricate a new false narrative. Those most shameless of those smear artists was John Emshwiller.

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They all took their cue from Rep. Darrell Issa of California, who had been working to do an end-run around the Senate investigation in order to impugn Dodd and other Democrats. As a minority member of the House Oversight Committee, Issa had no subpoena power. Towns, the Democrat who chaired the committee, knew it was inappropriate for the House to investigate members of the Senate, so he had refused Issa's request to issue subpoenas for a separate Countrywide investigation.

These smear artists echoed Issa's talking points by concealing:

(1) that the Senate Committee had fully investigated the VIP program,

(2) that the committee had found that the VIP program did not necessarily offer better terms to its customers,

(3) that Towns had unilaterally stopped doing business with Countrywide four years ago, and

(4) that in March 2009 Issa had issued his own Countrywide VIP Report, which was riddled with partisan falsehoods.

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By concealing those four facts, the right wing shills could falsely portray Towns as ethically conflicted and obstructing of a legitimate investigation of corruption. They included Bret Baier of Fox News, and Sharyl Attkisson, who masquerades as an investigative reporter on CBS.

But in yesterday's Journal, Emshwiller went further. He also concealed the facts that the Senate Ethics Committee had investigated Dodd and Conrad, and that it found "no credible evidence" to support the allegations made against them. Using the flimsiest pretext to shill on behalf of Issa, Emshwiller wrote:

The discovery that Countrywide Financial Corp. recorded phone conversations with borrowers in a controversial mortgage program that included public officials -- and that those recordings have been destroyed -- has prompted new congressional calls for more information about the program...Republican staff investigators have spent months looking into the VIP program, and learned of the call-recording system from a former Countrywide employee in June, according to a spokesman for Mr. Issa.

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For over 20 years, David has been a banker covering the energy industry for several global banks in New York. Currently, he is working on several journalism projects dealing with corporate and political corruption that, so far, have escaped serious (more...)

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