Countrywide, Friends of Mozilo, and Obama

It seems the smarminess of Countrywide Financial’s CEO, Angelo Mozilo, is now so far reaching as to smear the reputation of Democratic nominee, Barack Obama. According to the Wall Street Journal, many politicos got special treatment with loan approvals done by Mozilo himself. This group came to be known inside the company as “Friends of Mozilo”.

One friend, James Johnson, is now an advisor the the Obama campaign after recieving $7 Million in Mozilo approved loans at below par rates. Johnson is part of the committee to advise Obama on potential VP candidates. He has performed this task for other Democratic nominees like Walter Mondale and John Kerry in the past.

Mr. Johnson’s job for most of the 1990’s was running the GSE, Fannie Mae. Johnson ended his tenure at Fannie Mae in 1998 which means he missed getting caught up in the accounting scandal. But many charged him with setting up a myopic obsession with hitting Wall Street’s targeted stock projections so executives could collect big bonuses which eventually lead to the scandal.

As the chart shows below, they never missed.

Strange, eh?
FNMA

SOURCE: OFHEO Report of the Special Examination of Fannie Mae | The Washington Post - May 24, 2006

So now there are calls for Obama to separate himself from Johnson and he should if he’s smart. Since Johnson, Mozilo, and a handful of Wall Street Traders known as the “gang of five” are the home mortgage cabal that caused the mortgage meltdown tossing this country into the worst home price declines since the Depression, Obama should do more than just fire Johnson.

He should call for an investigation of the whole lot of them ala Enron. Only then could we know how deep down the rabbit hole this mess goes.

Good Luck!

UPDATE: Portfolio.com broke a story on more prominent politicos also caught up in this scandal as Countrywide Home Loans CEO’s “friends of Mozilo” casts a wider net. It appears that two Senators, some former Cabinet Members, and an Ambassador to the UN…are lucky enough to be counted as friends too. Senator Dodd a long-running mouthpiece for the GSE’s who Johnson worked for…is among them and so far…completely mum five days later on his involvement.

Big surprise, right?

Here’s a video on the scandal too…enjoy!