Dan is Mother Jones' deputy DC bureau chief. He is the New York Times best-selling author of Sons of Wichita(Grand Central Publishing), a biography of the Koch brothers that is now out in paperback. Email him at dschulman (at) motherjones.com.
I wrote yesterday that Rep. Edolphus Towns had a big decision to make over whether he would join in on Darrell Issa's Countrywide investigation. Well, he's made his decision, opting to steer clear of this politically fraught inquiry. In addition to being busy investigating other financial crisis-related matters, Towns told the AP that VIP loans handed out to Senators Chris Dodd (D-Conn.) and Kent Conrad (D-N.D.) (and potentially other congressional lawmakers) are "the subject of current proceedings before the Justice Department and Senate Ethics Committee and it is not appropriate for the committee to interfere with those proceedings."
What's Issa's next move? Slamming Towns for protecting "his friends" for starters. He's also taken his Countrywide campaign to Twitter, asking followers, "What do YOU think Congress should do about this? (Sweetheart mortgages to members of Congress NOT being investigated?)" Towns may have declined his support, but don't expect Issa, who's been bird-dogging this for more than a year, to let this go anytime soon. Personally, I don't care who investigates Countrywide's favorable financing for lawmakers, but someone needs to—and it's unclear whether the notoriously meek Senate ethics committee, which is presently looking into loans made to Dodd and Conrad, is up to the task.
The over-budget and technically flawed Kinetic Energy Interceptor program may have been axed by the Pentagon this spring, but it lives on in the earmark-laden defense appropriations bill currently under consideration by the House. You know, the bill that Obama threatened to veto because it contained billions in pet projects for lawmakers seeking to bring home the bacon to their districts. Much of the work for the KEI project, a missile defense system designed to "destroy enemy ballistic missiles during their boost and early midcourse phases of flight," happens to be taking place in Johnstown, Pennsylvania. That's the hometown of Jack Murtha, whose unrivaled and unapologetic pursuit of pork has earned him congressional infamy—and landed him uncomfortably close to an FBI probe targeting lobbyists and defense contractors with whom he's had dealings. TheWashington Post points to one reason why the terminated KEI program is nevertheless poised to reap an additional $80 million in the appropriations bill.
...Northrop Grumman, the principal contractor, is building a technology center in Murtha's district that would bring 150 related jobs, and Murtha's subcommittee sought its continuation as a way "to recoup the technology," according to an appropriations staff member, who was not authorized to speak on the record.
Is Rep. Darrell Issa (R-Calif.) out of line? Senators Chris Dodd (D-Conn.) and Kent Conrad (D-N.D.) are questioning the California Republican's motivations for investigating Countrywide Financial's VIP loan program, through which both of the Democrats received financing. "I find it very odd to be investigated and never given a chance to give my side of the story," Conrad tells Politico. "I think that’s unusual." Says Dodd, who's hanging on for dear life to his Senate seat: "This is just too coincidental."
Issa's a pretty committed ideologue, so trying to stir up trouble for his Democratic rivals certainly wouldn't be out of character. But even if his motivations are political, that doesn't mean Countrywide's lending practices and influence-peddling loan program shouldn't be thoroughly investigated. A different question is whether it's appropriate for Issa to be investigating fellow lawmakers in the first place. Former House general counsel Stanley Brand says Issa has stepped "way, way out of bounds" and that the House oversight committee in general lacks the authority to investigate the ethics of a Senator. That job belongs to the Senate ethics committee, a body not known for its hard-nosed investigative prowess but which is nevertheless moving forward with an inquiry into the Countrywide loans handed out to Dodd and Conrad.
Rep. Edolphus Towns (D-N.Y.), chairman of the House oversight committee, has some deep thinking to do. By week's end, he tellsThe Hill, he'll render a verdict on whether his committee will launch a full-scale investigation into failed subprime lender Countrywide Financial. It's an investigation the committee's minority staff, under Darrell Issa, has been pursuing for more than a year, with a particular focus on the company's "Friends of Angelo" VIP loan program. But in order to take his probe to the next level, Issa needs the backing of the full committee to subpoena records from Bank of America, which took over Countrywide following its epic collapse. And Issa has been pressing hard for Towns' cooperation. Towns, meanwhile, has been dragging his heels on this. Why? One potential reason is because this investigation could shed unflattering light on the favorable financing some congressional lawmakers received through Mozilo's VIP program.
These alleged sweetheart deals, first reported last summer, have bubbled back up in the news recently. On Monday, the AP reported that a former Countrywide employee has provided some damaging information to Republican oversight investigators and members of the Senate Ethics Committee relating to VIP loans granted to Senators Kent Conrad (D-N.D.) and Chris Dodd (D-Conn.). According to the AP, Robert Feinberg, who worked in the company's VIP loan section, has said that Conrad and Dodd were made fully aware that they were receiving favorable treatment, a claim both lawmakers strongly deny. This scrutiny comes at a particularly inconvenient time for Dodd, who's already in serious jeopardy of losing his senate seat in the upcoming election.
This puts Towns in a tight spot. If he goes forward with an investigation, he risks tainting fellow Democrats, as well as other lawmakers who may have received Friends of Angelo financing. If he doesn't, he leaves himself open to charges that he is playing politics, forsaking his oversight role to provide cover for congressional colleagues. Issa surely isn't going to let this go quietly.
Meet Del and Barbara Spier. The Texas grandparents were bankrupt as of March 2002, but they bounced back big thanks to Afghanistan's contracting free-for-all. The ink had barely dried on their bankruptcy filing [PDF], when the Spiers' company, US Protection and Investigations, was handed a multi-million security contract [PDF] by the Louis Berger Group; USAID had selected the construction and engineering conglomerate for the massive task of reconstructing Afghanistan's decimated infrastructure. USPI went on to land work with the United Nations, the World Bank, and others, growing almost overnight from a mom-and-pop firm into a security behemoth, employing thousands of guards on loan to the company from Afghanistan's Ministry of Interior and other local powerbrokers (read: warlords). All the while, according to federal investigators, USPI was quietly defrauding the government of millions in connection with its USAID subcontracts—double-billing for personnel, fuel, and vehicles.
I have a long piece out today on USPI's operations and the fraud allegations facing the Spiers, whose case goes to trial in late September.