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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Dec 19, 2011

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In a letter to the House ethics panel, four House representatives have been accused of “possible wrongdoing” due to their participation in a controversial loan program.

 

The letter was written by Rep. Darrell Issa (R. Calif.), chairman of the House Oversight and Government Reform Committee, and asserts the four representatives in question participated in a controversial loan program by Countrywide Financial called the VIP program.

 

The VIP program granted loans to favored borrowers at lower interest rates and with lower fees than the general public received. It also awarded loans to borrowers who otherwise would not have qualified for such financing. The VIP program was created by Countrywide’s CEO, Angelo Mozilo, which led Countrywide staff to call the VIP program by its unofficial name: the “Friends of Angelo” program.

 

The letter did not identify the names of the four suspected representatives, and the House ethics panel’s chief counsel, Dan Schwager, said that the committee “does not comment on specific allegations or referrals,” the Wall Street Journal reports.

 

Issa asserts that the VIP program was used in an attempt “to build relationships with government officials and others positioned to advance Countrywide’s business interests,” according to The Associated Press.

 

Only one current House member has been publicly tied to the VIP program so far. In 2009, New York Democrat Edolphus Towns, who headed the House oversight committee with Issa, opposed an attempt by Issa to subpoena VIP program loan records. Later that year, it was revealed that Towns used VIP loans to purchase properties in New York and Florida, as was reported by the AP.

 

A spokesperson for Towns claimed that his opposition to the subpoena was unrelated to his possession of VIP loans.

 

Two Democratic senators, Christopher Dodd and Kent Conrad, also have been identified as VIP loan recipients. The fact that Dodd has a part in this VIP program causes deep hypocritical vibrations, as Dodd is one of the senators behind the infamous financial reform bill, the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

In 2010, Issa wrote a letter to the Senate ethics investigators identifying 30 VIP loans that had been given to Senate employees, but those names have yet to be made public.

 

Bank of America, who acquired Countrywide in 2008, ended the VIP program when it obtained Countrywide. Bank of America has been cooperating with inquiries about the VIP program, and told the AP that they “look forward to putting this Countrywide matter behind us.”