Democrats balking in efforts to investigate Countrywide sweetheart loans

Republicans are trying to get to the bottom of  Countrywide Financial's sweetheart deals with Democratic politicians but the chairman of the House Oversight and Government Reform Committee, Edolphus Towns, is refusing to issue a subpoena.

This becomes even more important now that this Wall Street Journal article by John Emshwiller has revealed that Countrywide destroyed taped phone conversations with borrowers in their "VIP" program:

A Bank of America spokesman said in a written statement that the VIP recordings "were retained only for a limited time or until available recording space was utilized. Due to these limitations, we have no recordings from before July 2008 when Bank of America assumed management of Countrywide and terminated the VIP program."

Many companies routinely record phone conversations with customers, both for internal-training purposes and to help resolve disputes over what was said during a call.

On Thursday, Mr. Issa sent a letter to Bank of America Chief Executive Kenneth Lewis with a dozen questions seeking more information on what happened to the recordings. Arguing that those call records could have shed light on what public officials were being told by Countrywide personnel about the favorable treatment they were receiving, Mr. Issa wrote that Bank of America's "refusal to fully explain" what happened to the recordings "raises important questions."

Mr. Issa's letter noted that the VIP program began receiving widespread media attention in early June 2008, nearly a month before Bank of America's Countrywide takeover. Articles focused on prominent individuals who received loans through the program, which often gave lower fees and interest rates and faster service than could be obtained by the general public. Among the prominent VIP program borrowers were two Democratic senators, Chris Dodd of Connecticut and Kent Conrad of North Dakota. Both men have denied wrongdoing, and said they never asked for favorable loan terms from Countrywide.

No doubt those phone calls would have been very interesting. They would answer questions like was there any quid pro quo for those low interest loans or what Countrywide was looking for in developing this relationship with Democratic politicians.

Now, we will never be sure. In fact, about the only sure thing is that this investigation will not get at the truth of why prominent Democratic politicians were given such extraordinarily preferential treatment.

Hat Tip: Ed Lasky