By Zachary A. Goldfarb and Ben Pershing
Washington Post Staff Writers
Saturday, August 8, 2009
The Senate Select Committee on Ethics on Friday dismissed complaints against Sens. Christopher J. Dodd (D-Conn.) and Kent Conrad (D-N.D.) that they used their positions of power to obtain special deals on home loans from lender Countrywide Financial.
After a year-long investigation, the committee told Dodd and Conrad that it found "no substantial credible evidence" that they had violated the Senate's ethics rules. The committee found that the senators' loans were processed through a special, controversial program, but that they did not appear to profit financially from it.
But the committee also criticized the senators, telling them they "should have exercised more vigilance in your dealings with Countrywide in order to avoid the appearance that you were receiving preferential treatment based on your status as Senator."
The allegations about Dodd and Conrad are part of a politically explosive controversy about whether high-profile politicians and businessmen received special deals on home loans from the exclusive Countrywide program created by former chief executive Angelo Mozilo.
The ethics committee investigation found that participants in the Countrywide program "were often offered quicker, more efficient loan processing and some discounts."
Since the news media reported last year that Dodd and Conrad received loans through the program, both senators have insisted that they did not seek special favors. Republicans on the House Oversight and Government Reform Committee have launched their own inquiry into the matter. The questions have been a headache for Dodd, who is facing a tough reelection battle in Connecticut.
The controversy became deeply entangled with the financial crisis, as Countrywide was the nation's leading provider of subprime loans. Mozilo is facing civil fraud charges linked to the company's lending practices. He has denied any wrongdoing.
Dodd said in a statement that he was gratified by the outcome of the Senate probe but that he had learned from the experience. "It's not enough to hold yourself to a high ethical standard, you have to be ready and willing to respond to attacks on your integrity," he said.
Conrad expressed similar sentiments. "While I should have shown more vigilance in the appearance of these transactions, the committee has concluded I did nothing unethical," he said in a statement.
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, which filed the complaints, criticized the Senate ethics committee for blaming itself, and not the senators, for their participation in the special program. The committee said it needed to provide better guidance about negotiations with financial companies.
"Like a battered woman who explains she brought the beating on herself, the committee faulted itself for failing to 'provide more guidance to the Senate community about issues surrounding mortgage negotiations,' " Sloan said.