Armstrong Economics Blog/Politics Re-Posted Apr 6, 2023 by Martin Armstrong

QUESTION: I recall there was some scandal between a bank that failed and Senator Dodd of the Dodd-Frank bill that revised banking. Do you have anything on that?

Thank you for being the only reliable sources these days

RK

ANSWER: You must be referring to the 2008 Countrywide Financial Scandal. There was a political loan scandal in 2008-2009 that involved U.S. politicians who allegedly received favorable mortgage rates. In June 2008 Conde Nast Portfolio reported that numerous Washington, DC politicians over recent years had received mortgage financing at noncompetitive rates at Countrywide Financial because the corporation placed the officeholders in a program called “FOA’s”–“Friends of Angelo“, Countrywide’s Chief Executive Angelo Mozilo.

The politicians who obtained such favorable financing included the chairman of the Senate Banking Committee, Christopher Dodd (D-CT), and the chairman of the Senate Budget Committee, Kent Conrad (D-ND). Countrywide’s political action committee had also made large donations to Dodd’s campaign.