Media bias and the 'subprime six'

The editorial page at Investor's Business Daily today joins with the Wall Street Journal in asking for a full investigation of the "sub-prime six" -- the six named movers and shakers, among them two Senate Democrats, who received special attention from Countrywide Financial because of their VIP status.

For the record, those named in media reports as "Friends of Angelo" -- Countrywide Chairman Angelo Mozilo -- are Democratic insider James Johnson, formerly an advisor to the Obama campaign; Democratic Sens. Chris Dodd of Connecticut and Kent Conrad of North Dakota (pictured); former Health and Human Services Secretary Donna Shalala;  former U.N. Ambassador Richard Holbrooke; and former Secretary of Housing and Urban Development Alphonso Jackson. If you are keeping track, five of the six are Democrats.

IBD: "The Democrats' initial response has been to stall. They hope the problem will disappear until after the election. Given the media's lack of curiosity so far — a small handful of news organizations, including our competitor, the Wall Street Journal, have pushed this story ahead — it looks like the Democrats might get their wish.... These revelations suggest that, at the very least, the Democratic Party is afflicted with a kind of corruption that taints all recent decisions on the sub-prime crisis. They need to investigate it fully, immediately and without prejudice — or risk having it blow up in their faces."

Bloviation: Why the lack of media curiosity? My gut tells me the mainstream news media would have much more enthusiasm for the story if it had been broken by The New York Times and had begun with a sweetheart deal for a top campaign advisor to John McCain and had then spread to two Republican U.S. senators. That's just my two cents.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Associated Press
Hat tip: Pseudo 100, via e-mail

Wall Street Journal calls for investigation of 'friends of Angelo' loans

The Wall Street Journal -- correctly, it says here -- today is pushing Congress to investigate the "friends of Angelo" loan program, under which members of Congress including Sen. Chris Dodd (D-Conn.), at right, received special treatment and special loans from Countrywide Financial.

This is the same issue that brought down Obama campaign adviser Jim Johnson, another recipient of personal attention from Angelo Mozilo and Countrywide.

The Journal's editorial page this morning: "What did Countrywide CEO Angelo Mozilo receive –- or think he would receive –- in return for the friendly loans to politicians? And what did Mr. Mozilo get –- or think he would get –- in return for sweetheart loans to Fannie Mae CEOs Jim Johnson and Franklin Raines?" (Link credit: LA Biz Observed)

The Journal brushes off the so-called "ostrich defense" employed by another Countrywide borrower in the Senate, Kent Conrad (D-N.D.), who oddly told reporters he had never met Mozilo -- even though he had talked to Mozilo on the phone about a loan. "For what other reason, besides preferential treatment, would one call the CEO of the mortgage company? Does Mr. Conrad call August Busch IV when he wants to buy a six-pack?"

Also offended by Conrad's awkward dance of denial is one of my favorite real estate bloggers, Diana Olick of CNBC: "So am I to believe that these high-ranking senators and a former Fannie CEO didn’t read their loan documents to figure out that they were getting a special deal?? Did they not know enough about how mortgages work to figure it out? And why would Mozilo give these folks a special deal if he didn’t expect them to at least know about it??

"The senators are claiming they had no idea. Come on. I realize I’m supposed to accept that all those subprime borrowers didn’t understand their loans, but to accept that these well-educated leaders of our government didn’t -- well that insults my intelligence, and every borrower’s out there."

Your thoughts? Comments? E-mail story tips to peterviles@latimes.com.
Photo: AFP/Getty Images

Also a "friend of Angelo": Sen. Chris Dodd

To quote my favorite comment of recent days, "You cannot stop Angelo Mozilo, you can only hope to contain him."*

From Portfolio.com today: "Two U.S. senators, two former Cabinet members and a former ambassador to the United Nations received loans from Countrywide Financial through a little-known program that waived points, lender fees and company borrowing rules for prominent people."

Backstory: This appears to be the same "friends of Angelo" program in which former Obama campaign adviser Jim Johnson participated. Angelo being, of course, Countrywide Financial co-founder Angelo Mozilo.

More from Portfolio: "Senators Christopher Dodd (pictured), Democrat from Connecticut and chairman of the Banking Committee, and Kent Conrad, Democrat from North Dakota, chairman of the Budget Committee and a member of the Finance Committee, refinanced properties through Countrywide’s 'V.I.P.' program in 2003 and 2004, according to company documents and emails and a former employee familiar with the loans.

"Other participants in the V.I.P. program included former Secretary of Housing and Urban Development Alphonso Jackson, former Secretary of Health and Human Services Donna Shalala, and former U.N. ambassador and assistant Secretary of State Richard Holbrooke. Jackson was deputy H.U.D. secretary in the Bush administration when he received the loans in 2003. Shalala, who received two loans in 2002, had by then left the Clinton administration for her current position as president of the University of Miami. She is scheduled to receive a Presidential Medal of Freedom on June 19."

Crazy, huh? Say this for Angelo Mozilo, the butcher's son: He learned how the game is played in Washington, and he played it well.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: AFP/Getty Images
*For those who don't know, that line from ESPN's Sportscenter, for reasons to juvenile to go into, is considered by many American males to be the wittiest line of the past generation.

Update: Obama severs his Countrywide connection

Breaking news from the Associated Press: The Obama campaign has just announced that Jim Johnson, who received special loans from Countrywide under a "friends of Angelo" (Mozilo) program, has quit the campaign. From the A.P.: "A leader of Democrat Barack Obama's vice presidential research team has resigned amid criticism over his personal loan deals.  Obama announced in a statement Wednesday that Jim Johnson was stepping aside to avoid distracting from the vetting process."

My colleague Andy Malcolm is all over the story at Top of the Ticket.

Obama had defended his selection of Johnson yesterday, pointing out that Johnson was an unpaid volunteer. But his defense, according to the influential Dan Balz of the Washington Post, raised more questions about Johnson's role. Balz wrote "for Obama to suggest that Johnson is floating in some outer orbit of his campaign raises questions about the candidate's willingness to deal forthrightly with controversy."

The Wall Street Journal broke this story over the weekend and I linked to it because I thought it was important. For that I received all manner of negative feedback from supporters of Obama.  So I'm hereby inviting my good friends in the Obama camp to weigh in again. Come on back, folks.

Mike wrote, "The author of this should be fired. What horrible journalism." Mike?

Paul Hiller wrote, "This is a cheap shot ... show me some proof before you make allegations that this is a sweetheart deal" Paul?

Zooey wrote,  "Do your homework Mr. Viles, lest you further erode the Los Angeles Times journalistic reputation..." Zooey?

Ruri wrote, "The only news sources pushing this smear have been Murdoch mouthpieces: The Sun, the WSJ, and Fox news." Ruri?

Ben wrote, "...  this is a pathetic story. Friend of a friend took some big real estate loans at low rates? Boo, author." Ben?

Christopher Robin wrote, "This blog is typical vapor news from the mouthpieces of the repugs. Please dig deeper and make a more convincing case next time. A second grader could have done this well! (Sorry to insult the second grader, but what passes as journalism these days is a very low bar.)" Chris?

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Associated Press