One Senate staffer was told by a lobbyist, "the bailout section is exactly what Bank of America and Countrywide wanted." The Senate staffer added "its obvious they got what they asked for."
Countrywide's VIP loan to Dodd, which saves the Banking Committee chairman $75,000 over 30 years, smells like a potential quid-pro-quo now that Dodd has pushed a bill that will save the company from itself, but what about Bank of America's behavior?
Bank of America's political action committee (PAC) has donated $20,000 to Dodd since he became chairman of the banking panel 17 months ago. From January 2007 to March 2008, Bank of America employees have donated at least $50,400 to Dodd's campaigns, according to the Center for Responsive Politics. So, while Dodd's sweetheart loan from Countrywide saves him personally $200 per month, his chairmanship earns him politically more than $1,000 per week.
Bank of America stands to profit most from a bailout. It will take on Countrywide's bad loans, and under Dodd-Shelby, it could shift the worst ones onto the shoulders of taxpayers, via the Federal Housing Authority. Basically, Uncle Sam will buy Countrywide's stinky loans off of Bank of America.
The jist of the article is this. Besides the sweetheart loan from Countrywide, Senator Chris Dodd is also the recepient of a great deal of PAC money from Bank of America. Bank of America recently agreed to buy out Countrywide in what may wind up being a very lucrative deal for B of A. Furthermore, ANONYMOUS lobbyists claim that the bill serves the interest of B of A so much that it is almost as though the bank wrote the bill.
Here is basically what we have. We have a bill presented to the public as a helping hand for struggling borrowers. In reality, it is also a bailout of irresponsible banks. It allows banks to remove bad loans from their portfolio and be injected with government cash. Furthermore, the key legislator on the bill, Chris Dodd, not only received a sweetheart deal from the most significant troubled lender, Countrywide, but he received a significant amount of money from another lender, Bank of America, that is simultaneously buying out Countrywide.
Bank of America stands to potentially receive a boondoggle from its merger with Countrywide. They bought it at a depressed share price because they agreed to also take on its troubled debt. Now, not even six months later, the government is stepping in to buy up nearly all that troubled debt. As such, Bank of America stands to make like bandits in this merger.
My colleagues at Red State are demanding action. Senator Jim DeMint and Senator Jim Bunning are each calling for an investigation into the behavior of Countrywide, Bank of America, and Chris Dodd. Furthermore, they are calling for a halt to the movement of Dodd/Frank until the investigation is over. Please call your Senator, 202-224-3121.