New report ties lawmakers to financial perks
(CBS News)
http://www.cbsnews.com/8301-503544_162-57466931-503544/new-report-ties-lawmakers-to-financial-perks/
A report out Thursday issued by House Oversight and Government Reform Chairman Darrell Issa, R-Calif., shows the extent to which subprime mortgage lender Countrywide Financial used its VIP loan program to influence hundreds of people responsible for overseeing mortgage markets - including members of Congress, their staff members, cabinet secretaries and their employees and key executives at mortgage giant Fannie Mae.
The report showed at least six members of Congress from both parties benefited from VIP loans issued by Countrywide. The lawmakers names were previously reported, but the new report makes it clear that at least some recipients of the special loans must have known they were receiving VIP treatment since letters confirming the terms specifically said "From-Countrywide VIP Unit."
The report states that the benefits of getting a VIP loan included a half-point off the interest rate and the waiving of junk fees that ranged from $350 to $400. It also revealed that in the period leading up to the subprime mortgage meltdown, Countrywide launched 70 lobbyists on the House Financial Services Committee alone to fight off new subprime lending rules and new regulations governing Government Sponsored Enterprises like Fannie Mae. No legislation ever passed out of the committee. Countrywide, on the verge of collapse, was bought by Bank of America in 2008.
Fannie Mae was the number one buyer of Countrywide's bad subprime loans and eventually needed to be bailed out by U.S. taxpayers. Fannie Mae executives receiving loans included chairmen James 'Jim' Johnson, Franklin Raines, and Daniel Mudd.
Recipients of the special mortgage deals include then-Senate Banking Chairman Chris Dodd, D-Conn., and the current Senate Budget Chairman Kent Conrad, D-N.D.. Another recipient was Rep. Edolphus Towns, D-N.Y., who was chair of the House Oversight Committee when news of the special VIP program first broke. Towns insisted he had done nothing wrong and started the initial Countrywide probe and issued subpoenas to Bank of America for information, but did not specifically ask for names of members of Congress who'd received the favorable loans.
Rep. Howard "Buck" McKeon, R-Calif., was another recipient of a VIP Countrywide loan in 1998. The company CEO, Angelo Mozilo, personally demanded that the company waive fees and lowering of points. The report shows that a letter included in McKeon's loan documents specifically said "thank you for allowing Countrywide's VIP team to assist you with your financing needs..." The letter is also signed by "The VIP Team."
McKeon's communications director Alissa McCurley said in an emailed statement to CBS News that "Mr. McKeon has been completely upfront and transparent about his loan. He was never aware of any Friends of Angelo designation, and he has provided the media all his loan documentation from the 1998 loan. Mr. McKeon shares Chairman Issa's interest in determining if there was any wrongdoing by Countrywide."
Rep. Pete Sessions, R-Tex., who took out a loan with Countrywide, has always maintained that he specifically stated he did not want special treatment. Today's report confirms that he did not receive a VIP discount on his loan.
At least two cabinet members received VIP loans as well, Alphonso Jackson and Henry Cisneros. Both are former secretaries of the Housing and Urban Development Agency which is the executive arm responsible for overseeing the Housing market.
The Oversight and Government Reform Committee has referred all recipients of the VIP loans to the House and Senate ethics committees for further investigation. Aides say they doubt the Justice Department will take any action against loan recipients despite the possibility that the loans could be considered bribes. Oversight committee Republicans do not go so far as to call the special loans bribes nor do they characterize any of the behavior as illegal though they suggest Countrywide lobbyists may have gotten around bribery laws by keeping details of the VIP program internal to the company.
OF COURSE, Darrel Issa is among the wealthiest members of Congress. I am re-posting an earlier post here:
By Brian T. Lynch
I know a place you can work where, on average, employees can accumulates personal wealth at a rate of over 15% per year! The catch? You have to get elected to Congress.
This is just one bit of information parsed from data on the average wealth of members of Congress. The database is available at OpenSecrets.Org [http://bit.ly/vRBruV], courtesy of The Center for Responsive Politics. It comes with some serious caveats. According to OpenSecrets:
“By law, members of Congress are only required to report their wealth and liabilities in broad ranges. It's therefore impossible to precisely determine how much value their assets are worth, or have gained or lost. from year to year. The Center for Responsive Politics determines the minimum and maximum possible asset values for each member of Congress to calculate a member's average estimated wealth.”
Congress has set rules for itself so that we can only guess at how much each member is worth. Their net worth can only be expressed as an average within a broad margin of error. But it is still possible to learn some things about Congress as a whole if you aggregate the numbers and analyze how they change over time.
The analysis which follows is based on average Congressional wealth data for two points in time, in 2004 and in 2010. It appear that the data only includes members who were in the House or Senate during this six year period. Keep in mind that during this period of time the United States economy nearly collapsed.
Keep in mind that of the 383 members of the House or Senate included in this analysis, the fortunes of 140 member declined while in office. The figures below on combined wealth adds up all the gains and subtract all the losses to arrive at the average wealth increases. Also, to make the graphics more comprehendible and directly comparable, the dollar amounts are divided by the number of representative in each category and expressed as averages per legislator.
The other point to remember is that there are five members in the legislature, three in the House and two in the Senate, who are very wealthy. There combined wealth is estimated at over $1.5 trillions dollars. This skews the averages and makes the average member of Congress appear to be more wealthy than the are. Nevertheless, this analysis is primarily about how Congressional wealth grows over time.
The Wealthiest
| |
Issa, Darrell (R-Calf) House
|
$448,125,017
|
McCaul, Michael (R-Tex) House
|
$380,411,527
|
Harman, Jane (D-Calf) House
|
$326,844,751
|
Kerry, John (D-Mass) Senate
|
$231,722,794
|
Kohl, Herb (D-Wis) Senate
|
$173,538,010
|
Combined Wealth
|
$1,560,642,099
|
So did the personal wealth of our legislators grow over the six year period between 2004 and 2010?
Yes. The combined person wealth of our legislators rose from around $2.2 trillion in 2004 to $3.1 trillion in 2010. That is a 40.4 % growth in net worth, or around a 6.7% annual growth rate.
Was there a difference in the growth rate between the political parties?
Yes. Republican’s as a group faired better than Democrats. Republican’s had a 12.9% annual growth rate in personal wealth while Democrats gained at a 2.7% rate. The combined gains of the three independents in the Senate was high also, but as you can see their combined income per member was much smaller that that of their colleagues.
Was there a difference between the House and the Senate in the growth rate of personal income?
Yes again. The Senate is a much wealthier body than the House and it actually lost a little net worth over this six year period. The House gained 75.1% in personal wealth for a 12.5% annual rate of growth.
When the data is further broken down by both political party and Congressional chamber it appears that Senate Democrats are collectively the wealthiest group, and the only group that lost a little personal wealth over six years. The House is the wealthiest chamber for Republican’s, and it is also the chamber with the highest rate of growth in personal wealth. House Republican’s as a group gained 92.8% in net worth while House Democrats gained 51% over six years.
Average Wealth Increase per Legislator by Party and Chamber - 2004 and 2010
| |||||
Wealth /Member in 2004
|
Wealth /Member in 2010
|
Six Year Dif /Member
|
Total % Change
|
Annual % Change
| |
House Democrats (n=176)
|
$2,918,824
|
$4,408,237
|
$1,489,414
|
51.0%
|
8.50%
|
House Republicans (n=133)
|
$5,243,557
|
$10,111,971
|
$4,868,414
|
92.8%
|
15.47%
|
Senate Democrats (n=40)
|
$20,516,818
|
$19,323,256
|
-$1,193,561
|
-5.8%
|
-0.97%
|
Senate Republicans (n=41)
|
$4,394,130
|
$5,128,482
|
$734,352
|
16.7%
|
2.79%
|
Senate Independents (n=3)
|
$577,182
|
$1,359,855
|
$782,673
|
135.6%
|
22.6%
|
Did everyone in Congress fair well over this six year period?
No. As mentioned earlier, 140 legislators lost wealth during this time. The graph below breaks down the numbers of those who gained and lost personal wealth while in Congress. House Democrats had the highest percentage of gainers at 67% while Senate Democrats has the lowest ratio of gainers at 59%. The percent of those gaining personal wealth among House and Senate Republican’s was 62% and 65% respectively. Overall, almost two-thirds (64%) of Congress gained personal wealth during their time in office.
What about those who gained the most? Just how well did they do?
There are at least two different ways to identify who gained the most. You can look at in terms of dollar amounts gained or as a percentage of growth in net worth. In come cases percentages can be misleading. A person with $10.00 who gains a buck has a 10% rate of growth, but you wouldn’t say they got rich. So both measures were used here and the results are in the following two graphs below.
Looking at both the percentage increase and actual dollars increase methods, the top ten House Republican’s, with the highest gains in personal wealth, clearly out paced the rest of their top ten Congressional colleagues in accruing wealth. As a percentage increase in personal wealth the top ten Republican Senators and top ten Democratic Senators did equally well. The wealth of House Democrats appears to barely rise on the graph above, but that’s because they start out with so little compared to their colleagues. The actual percentage increase for the top ten Democrats in the House was over 4000%.
So what does all of this mean?
Our legislative representatives are rich. I’m not an economist, or a researcher, but a few conclusions do seem apparent from this analysis. Congress, as a group, is quite wealthy. While it may be true that there are over 400 billionaires in the United States
While nearly a third of Congress are less well off after six years in service, the majority were better off and many were far better off in 2010 than in 2004. The actual growth in personal wealth seems to be more apparent among Republican’s, particularly House Republicans, but the percentage of growth in personal wealth among the top ten House Democrats extraordinarily high. Only 28 legislators have a net worth under $100,000.00 and only 15 are in debt. I will leave it to the reader to contrast this with the your own situations and the folks you know. What this analysis can’t do is tell us why the data is as it appears. I will leave that to others for now.
All of the tables for this analysis appear below. I encourage readers of this blog to review them for accuracy and use them to develop more information regarding the wealth patterns or our federal representatives . Please leave comments if you find any errors or omissions in the tables. I will make appropriate corrections on this blog post.
[1] In defining “the 1%” I prefer an approach based on wealth, not income. Wealth is power. Income is only an indirect measure of wealth and power. (Is the strength of a batter measured by the rate at which it is charged or by the energy has stored?). For my purposes here I am defining the 1% wealthiest legislators in Congress beginning with the assumption that one percent of American's own 35% of the wealth in the US America
Total Wealth Increase of All
| |||||
Average Wealth in 2004
|
Average Wealth in 2010
|
Difference in Six Years
|
Total % Change
|
Annual % Change
| |
All Members (n=393)
|
$2,213,699,631
|
$3,108,019,528
|
$894,319,897
|
40.4%
|
6.7%
|
All Democrats (n=216)
|
$1,334,385,659
|
$1,548,780,022
|
$214,394,363
|
16.1%
|
2.7%
|
All Republicans (n=174)
|
$877,552,427
|
$1,555,159,941
|
$677,607,514
|
77.2%
|
12.9%
|
Independents (n=3)
|
$1,731,545
|
$4,079,565
|
$2,348,020
|
135.6%
|
22.6%
|
Senators (n=84)
|
$1,002,563,604
|
$987,277,595
|
-$15,286,009
|
-1.5%
|
-0.3%
|
Congressmen (n=309)
|
$1,211,147,532
|
$2,120,971,945
|
$909,824,413
|
75.1%
|
12.5%
|
Average Wealth Increase Per US Legislator by Party and Chamber Between 2004 and 2010
| |||||
Wealth /Member in 2004
|
Wealth /Member in 2010
|
Six Year Dif /Member
|
Total % Change
|
Annual % Change
| |
All Members (n=393)
|
$5,632,823
|
$7,908,447
|
$2,275,623
|
40.4%
|
6.7%
|
All Democrats (n=216)
|
$6,177,711
|
$7,170,278
|
$992,566
|
16.1%
|
2.7%
|
All Republicans (n=174)
|
$5,043,405
|
$8,937,701
|
$3,894,296
|
77.2%
|
12.9%
|
Independents (n=3)
|
$577,182
|
$1,359,855
|
$782,673
|
135.6%
|
22.6%
|
Senators (n=84)
|
$11,935,281
|
$11,753,305
|
-$181,976
|
-1.5%
|
-0.3%
|
Congressmen (n-309)
|
$3,919,571
|
$6,863,987
|
$2,944,416
|
75.1%
|
12.5%
|
Average Wealth Increase of All
| |||||
Average Wealth in 2004
|
Average Wealth in 2010
|
Difference in Six Years
|
Total % Change
|
Annual % Change
| |
House Democrats (n=176)
|
$513,712,948
|
$775,849,769
|
$262,136,821
|
51.0%
|
8.50%
|
House Republicans (n=133)
|
$697,393,079
|
$1,344,892,164
|
$647,499,085
|
92.8%
|
15.47%
|
Senate Democrats (n=40)
|
$820,672,711
|
$772,930,253
|
-$47,742,458
|
-5.8%
|
-0.97%
|
Senate Republicans (n=41)
|
$180,159,348
|
$210,267,777
|
$30,108,429
|
16.7%
|
2.79%
|
Senate Independents (n=3)
|
$1,731,545
|
$4,079,565
|
$2,348,020
|
135.6%
|
22.6%
|
Average Wealth Increase per Legislator by Party and Chamber - 2004 and 2010
| |||||
Wealth /Member in 2004
|
Wealth /Member in 2010
|
Six Year Dif /Member
|
Total % Change
|
Annual % Change
| |
House Democrats (n=176)
|
$2,918,824
|
$4,408,237
|
$1,489,414
|
51.0%
|
8.50%
|
House Republicans (n=133)
|
$5,243,557
|
$10,111,971
|
$4,868,414
|
92.8%
|
15.47%
|
Senate Democrats (n=40)
|
$20,516,818
|
$19,323,256
|
-$1,193,561
|
-5.8%
|
-0.97%
|
Senate Republicans (n=41)
|
$4,394,130
|
$5,128,482
|
$734,352
|
16.7%
|
2.79%
|
Senate Independents (n=3)
|
$577,182
|
$1,359,855
|
$782,673
|
135.6%
|
22.6%
|
Top Ten Legislators /w Biggest Jump in Wealth ($ increase) by Party and Chamber - 2004 and 2010
| |||||
Aggregated Totals
|
Average Wealth in 2004
|
Average Wealth in 2010
|
Difference in Six Years
|
Total % Change
|
Annual % Change
|
House Democrats (n=176)
|
$327,705,235
|
$568,142,204
|
$240,436,969
|
73.4%
|
12.2%
|
House Republicans (n=133)
|
$331,746,289
|
$1,005,864,579
|
$674,118,290
|
203.2%
|
33.9%
|
Senate Democrats (n=40)
|
$137,206,389
|
$216,341,049
|
$79,134,660
|
57.7%
|
9.6%
|
Senate Republicans (n=41)
|
$21,576,271
|
$81,888,741
|
$60,312,470
|
279.5%
|
46.6%
|
Top Ten Legislators /w Biggest Jump in Wealth ($ increase) by Party and Chamber - 2004 and 2010
| |||||
Average per Legislator
|
Wealth /Member in 2004
|
Wealth /Member in 2010
|
Six Year Dif /Member
|
Total % Change
|
Annual % Change
|
House Democrats (n=176)
|
1,861,962
|
3,228,081
|
1,366,119
|
73.4%
|
12.2%
|
House Republicans (n=133)
|
2,494,333
|
7,562,892
|
5,068,559
|
203.2%
|
33.9%
|
Senate Democrats (n=40)
|
3,430,160
|
5,408,526
|
1,978,367
|
57.7%
|
9.6%
|
Senate Republicans (n=41)
|
526,251
|
1,997,286
|
1,471,036
|
279.5%
|
46.6%
|
Top TenLegislators /w Biggest Jump in Wealth (% increase) by Chamber & Party - 2004 and 2010
| |||||
Aggregated Totals
|
Average Wealth in 2004
|
Average Wealth in 2010
|
Difference in Six Years
|
Total % Change
|
Annual % Change
|
House Democrats*
|
$779,531
|
$31,996,557
|
$31,217,026
|
4004.6%
|
667.4%
|
House Republicans
|
$35,430,212
|
$392,877,862
|
$357,447,650
|
1008.9%
|
168.1%
|
Senate Democrats
|
$19,415,702
|
$56,516,827
|
$37,101,125
|
191.1%
|
31.8%
|
Senate Republicans
|
$11,871,405
|
$67,686,976
|
$55,815,571
|
470.2%
|
78.4%
|
Top TenLegislators /w Biggest Jump in Wealth (% increase) by Chamber & Party - 2004 and 2010
| |||||
Average per Legislator
|
Wealth /Member in 2004
|
Wealth /Member in 2010
|
Six Year Dif /Member
|
Total % Change
|
Annual % Change
|
House Democrats*
|
$4,429
|
$181,799
|
$177,369
|
4004.6%
|
667.4%
|
House Republicans
|
$266,393
|
$2,953,969
|
$2,687,576
|
470.2%
|
78.4%
|
Senate Democrats
|
$485,393
|
$1,412,921
|
$927,528
|
191.1%
|
31.8%
|
Senate Republicans
|
$289,546
|
$1,650,902
|
$1,361,355
|
470.2%
|
78.4%
|
* One member, P. Kennedy, accounted for most of the increase. Excluding him for the in rank on the list yeilds an increase of 1,602.6% or 267.1% annual increase.
| |||||
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