Countrywide has recently been taking fire for CEO Angelo Mozilo’s Friend’s of Angelo program where the CEO would give special deals to his friends. Given that Countrywide is the poster child for the subprime meltdown, this program has been getting extra attention.

The Washington Post today showed this morning how it worked. Sen. Kent Conrad, D-N.D. upon advice from an old friend, called up Countrywide CEO Angelo Mozilo to obtain a $1.07 million loan for his Bethany Beach, Del. vacation home. Apparently they hit it off and Mozilo took up the cause of getting Sen. Conrad a good deal.

“[T]ake off 1 point,” Mozilo instructed a subordinate in a March 17, 2004, e-mail obtained by Condé Nast Portfolio magazine. In another e-mail that April about a Conrad loan, Mozilo wrote: “Make an exception due to the fact that the borrower is a senator.” Countrywide Gave Special Attention To Lawmakers - washingtonpost.com

I don’t see any ethical issues for Mozilo with the above activities — so long as  Mozilo was not being deceptive about this practice. In fact, it sounds like he was quite open with his special favors. “It was something he handed out like party favors. He was fairly forthcoming with it,” said Guy Cecala, publisher of Inside Mortgage Finance Publications. “As long as I can remember, he was offering that.”Countrywide Gave Special Attention To Lawmakers - washingtonpost.com. Mozilo wasn’t being deceptive, he wasn’t stealing (company’s give discounts to customers for all kinds of reasons), and he wasn’t hurting anyone.

Except for now being in the negative spotlight, this practice could easily have been a prudential (smart business) practice as well. Who wouldn’t want a US Senator as a happy customer telling their friends what a great experience they had buying your product.

The ethics of the Sen. Conrad is potentially a different story. The Senate ethics committee has a gift rule that frowns on Senators getting benefits of this magnitude. Sen. Conrad claims “I was never told I was given preferential treatment. I didn’t ask for it, didn’t seek it, and as far as I know, I didn’t get it,”

Give me a break. Sen. Conrad apparently thinks it is common practice for the CEO of the world’s largest mortgage lender to personally handle a mortgage transaction. Either Sen. Conrad is lying or he is completely out of touch with how the world works.

Tags: countrywide, ethics, ethics for the real world, clint korver, Sen. Kent Conrad

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