Countrywide's Former CEO Beats the Rap

Federal prosecutors are reportedly terminating their criminal investigation into Countrywide's former CEO Angelo Mozilo. (He's the tanned, smiling figure in the photo.) The Feds apparently believe they don't have a case strong enough to convict a key figure in the financial pillaging of the savings of millions of Americans. There is some thought the various civil proceedings Mozilo faces may provide statements or other evidence to re-open a federal probe into Mozilo's activities at Countrywide.

To date, Mozilo has had to personally pay a $22 million fine levied by the SEC; the other $40-plus million was paid by the bailed-out Bank of America, which had acquired Countrywide. Mozilo thus remains unindicted for any criminal activity, and at liberty to enjoy the millions he retained from the Countrywide fraud. How much? From 2005-2007, Mozilo made nearly $300 million in Countrywide stock he sold.

Intriguingly, congressman Darrell Issa intends to have Mozilo testify before the House committee the conservative Republican chairs. (Issa, by the way, is the wealthiest member of the House of Representatives.) Issa's goal in his probe of Countrywide is to dig up dirt on Countrywide's VIP list of sweetheart mortgages. Among those known to have received them are two high-profile Democrats: former U.S. senator Chris Dodd and current U.S. senator Kent Conrad. Expect other Democrats, such as fund raisers and other party insiders, to be named during Mozila's testimony. One big prize Issa may be targeting might be Jim Johnson, who doubled as Fannie Mae chief and a prominent Democratic Party fund raiser and power broker. Johnson was originally the lead dog for Obama's VP selection process; that evaporated when allegations that Johnson received a sweetheart deal from Countrywide became public. Another prize might be Franklin Raines, Freddie Mac's CEO who also allegedly received a Countrywide mortgage with a "noncompeting" interest rate.

Issa and many Republicans would like nothing more than to expose corruption at Fannie and Freddie. That development would give them the hammer to shut Fannie and Freddie down once and for all.