U.S. Representative Howard P. “Buck” McKeon (R-Santa Clarita) is among four congressmen under investigation by a House committee probing whether the lawmakers received preferential treatment in home loans approved by Countrywide Financial Corp. in exchange for political favor.
The House Oversight and Government committee, headed by Rep. Darrell Issa (R-Calif.), has been looking into Countrywide's VIP loan program, which provided interest rate discounts and other services to preferred customers who were referred to as "Friends of Angelo," the mortgage giant's longtime CEO. Countrywide and public documents show McKeon was a VIP customer in 1998 for a loan of $315,000.
Issa has forwarded information found by congressional investigators to the House Ethics Committee for further review. A discounted loan could be considered a gift, which is not allowed under House ethics rules.
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McKeon, also chairman of the House Armed Services Committee, has not been accused of any wrongdoing. Through his spokeswoman, Alissa McCurley, McKeon has denied he knew his loan got any preferential treatment, and denied granting any special favors in return. He no longer owns the property in question.
"Chairman Issa approached Mr. McKeon and informed him that Mr. McKeon's loan had come up in his investigation into the Friends of Angelo program," McCurley said in a statement. "Mr. McKeon was shocked and angry to hear this as he had no knowledge of the Friends of Angelo designation. Mr. McKeon has never met or spoken to Angelo Mozilo. Mr. McKeon is going back trying to figure out what Countrywide did to his loan 13 years ago. Mr. McKeon is committed to transparency on this — he believes that the actions of Countrywide should be looked into and wants to get to the bottom of what Countrywide did."
Countrywide Financial Corp.’s subprime lending activities put it at the center of the mortgage meltdown during the Great Recession. Bank of America bought the troubled corporation in 2008, ended the VIP program, and has been cooperating with congressional investigators looking into Countrywide’s lending practices under its former CEO, Angelo Mozilo.
Without admitting any wrongdoing, Mozilo paid $67.5 million in penalties in a settlement with the Securities and Exchange Commission in 2010.
The Wall Street Journal reports that two of the other three congressmen identified in the House Ethics probe are California Republican Elton Gallegly and New York Democrat Edolphus Towns. The fourth congressman’s name has not yet been made public.