Angelo's friends in high places

As reported in The Wall Street Journal last week, former Countrywide Financial Corporation Chairman Angelo Mozilo had more friends in high places than previously known. Those who made the new "Friends of Angelo" list included Jamie Gorelick, who served in the Clinton administration as deputy attorney general, the No. 2 post in the Department of Justice.

In 1997, even though Ms. Gorelick had no previous experience in finance, she was appointed vice chairman of Federal National Mortgage Association (Fannie Mae). She served in that capacity until her resignation in 2003, the year when federal regulators accused Fannie Mae of "improper accounting to the tune of $9 billion in unrecorded losses." The improper accounting cited led to senior Fannie Mae executives being awarded multi-million dollar bonuses. Ms. Gorelick's cut was a relatively modest $779,625.

No matter how you slice and dice it, the long-term relationship between Countrywide and Fannie Mae smells to high heaven. (Countrywide has since been bought out by Bank of America, and as everyone now knows, Fannie Mae was bailed out to the tune of many billions of taxpayer dollars by the U.S. Government.) Two former Fannie chairmen, Franklin Raines and James Johnson, walked away from their sinking financial ship with staggering "golden parachutes," in the former's case, a reported $90 million.

Why then, do you think, senior Fannie executives made the Friends of Angelo list, the list of those given very large, below market interest rate loans from Countrywide? Could it be because of favors given or expected from Fannie in return?

This seems like a ripe subject for investigation by Sen. Chris Dodd's Banking Committee.

Oops. He made Angelo's list, too.