Dodd, Conrad cleared of Senate ethics violations

The Senate Ethics Committee on Friday cleared Democratic Sens. Christopher Dodd of Connecticut and Kent Conrad of North Dakota of wrongdoing for participating in a special program that secured them special low-interest home loans with defunct mortgage giant Countrywide Financial Corp.

The panel, after a yearlong investigation, said it found “no substantial credible evidence” that the mortgages violated Senate ethics rules.

Mr. Dodd, the chairman of the Senate Banking Committee, and Mr. Conrad, who chairs the Senate Budget Committee vehemently have denied any wrongdoing in the mortgage deals. Both said they knew they got low mortgage-rate deals in a lender’s VIP program, but thought the special treatment was a “courtesy” on par with “frequent flier” discounts.

“I’ve said all along that I welcomed a close examination of my mortgages, and I’ve also said all along that [Mr. Dodd’s wife] Jackie and I received the same mortgages that anyone else could have received,” Mr. Dodd said.

The questionable loans have contributed to a steep slide in Mr. Dodd’s poll numbers in Connecticut, where he faces a difficult race in 2010 in a bid for a sixth Senate term.

While finding no ethics violations, the Senate panel added that the two lawmakers should have “exercised more vigilance” in their dealings with Countryside in order to avoid the appearance of receiving preferential treatment based on their status as senators.

Mr. Conrad said that “while I should have shown more vigilance in the appearance of these transactions, the committee has concluded I did nothing unethical, and that is the truth.”

Robert Feinberg, who formerly worked in the mortgage giant’s lending department for favored clients, said in testimony to congressional investigators in June that the senators were made aware of their VIP status as “Friends of Angelo,” referring to Countrywide Chief Executive Officer Angelo Mozilo. The CEO played a central role in the subprime-mortgage meltdown, which included the downfall of Countrywide last year.

Mr. Mozilo, whose company lost billions of dollars on bad mortgages before it was bought by Bank of America Corp. in July 2008, has been charged with civil fraud and insider trading by the Securities and Exchange Commission. He had denied any wrongdoing.

Mr. Dodd refinanced two mortgages with Countrywide in 2003 — his home in Connecticut and a residence in Washington. Mr. Conrad acquired mortgages in 2004 for a vacation home in Delaware and an apartment building in Bismarck, N.D.