Goodbye, Chris Dodd
The retiring senator leaves a legacy blackened by cozy ties to the financial industries he was supposed to oversee.
Dodd begins his final year in Congress not with great fanfare or adulation -- his popularity rating has plummeted -- but as a symbol of power gone bad, of back-scratching of the worst order, and of a political establishment that enabled the downfall of our economy.
To be sure, Dodd isn't the only one to blame for the too-cozy relationship between Wall Street and Washington. But he nestled himself comfortably under the wing of a corrupt system, and allowed the corruption to flourish.
Perhaps the biggest stain on Dodd's career was his connection to Countrywide Financial. Dodd has incredible power as chairman of the Senate Banking Committee, and took extraordinary steps to help Countrywide (and other lenders) by proposing that lenders push $300 billion in bad loans to taxpayers through the Federal Housing Administration.
Was is just a coincidence, then, that a few years earlier the Democratic senator from Connecticut became a special customer of Countrywide, one known affectionately at the company as a "friend of Angelo"? (Angelo Mozilo was Countrywide's chief executive).
Countrywide helped Dodd refinance mortgages in 2003 worth $778,000 on homes in Connecticut and Washington, Politico reported. Countrywide reportedly waived the points on the mortgages and gave special interest rates that experts said likely saved Dodd about $75,000. (Dodd's office says the savings were much lower.)
Dodd admitted that he had received special treatment, but told reporters that he regretted ever having done business with the company. Or is it that he regretted getting caught?
Oh, and how about Fannie Mae (FNM) and Freddie Mac (FRE)? In July of 2008, Dodd described these institutions as "fundamentally strong" and dismissed any concerns about their financial structure. Two months later, the government had to take over the mortgage companies because they were failing so completely.
Who was the top recipient of Fannie Mae and Freddie Mac campaign contributions from 1989 to 2008? I'll give you one guess.
The New York Times reports that more recently, Dodd helped engineer legislation that allowed American International Group (AIG) to dole out huge bonuses after the firm received a taxpayer bailout. Dodd has been one of the biggest recipients of campaign donations by Wall Street, the Times reports.
And so now, Dodd has a year left as a lame-duck senator. The cynic in me sees a quiet farewell, followed by a lucrative career as a top honcho on Wall Street.
But hey, there's always the chance that Dodd could make the most of his final year and use his position to push major reforms on the banking and securities industries. The Times suggests he could help enact historic consumer protection legislation that other politicians are trying to defang.
Why don't you surprise us, Sen. Dodd. Turn your blemished legacy around and go out not with a whimper, but a bang.
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