The controversy surrounding collapsed mortgage lender Countrywide took another turn Wednesday when the ranking Republican on a key House committee openly confronted the panel's chairman demanding he subpoena Bank of America for information about a murky program that involved public officials.
The challenge from Rep. Darrell Issa, R-Calif., comes in the wake of the recent revelation that Countrywide recorded phone calls with borrowers as part of the program and then those recordings were destroyed. The program, Issa has said, was used by the lender to provide sweetheart deals to federal government officials and members of Congress who worked on housing policy in an attempt to gain their support.
In a heated exchange at a hearing Wednesday morning, Issa told House Oversight and Government Reform committee chairman Edolphus Towns, D-Md., that Bank of America, which bought Countrywide last year, should be subpoenaed for all information related to the program.
"Mr. Chairman, I call on you today to issue that subpoena," Issa said to Towns. "It is that important that I bring it up at this hearing and I call for you if you cannot do it to step aside and allow this committee to have a vote."
Issa has requested before that Towns issue a subpoena, but elected to make his protests public at the televised Congressional hearing.
"What we do know is that there is a level of intended corruption by Countrywide that clearly had an effect on government's decisions for years and we are ignoring it," the California lawmaker said in his opening statement. "We cannot really understand the failure of government if we do not understand the failure of government officials led by, in fact, an attempt to bribe them."
Countrywide collapsed in 2008 in the midst of the subprime mortgage meltdown. In June, the company's former CEO Angelo Mozilo was charged by the Securities & Exchange Commission with civil fraud and insider trading. Mozilo, the highest-profile official to date faced with federal charges stemming from the financial crisis, has become the poster boy for predatory lending.
Along with his request for a subpoena, Issa has written to Bank of America chief Ken Lewis seeking an explanation about what happened to the recordings connected to the program.
Borrowers from the VIP program include Senate Banking committee chairman Chris Dodd, D-Conn., and Senate Budget committee chairman Kent Conrad, D-N.D., who have both denied wrongdoing, as well as the Bush administration's Housing & Urban Development Secretary Alphonso Jackson, who told Conde Nast Portfolio magazine at one point that he never asked Countrywide for favorable loans.