Countrywide VIP Scandal: In the Media, Unlike the Courtroom, Rules of Evidence Don't Apply

10/23/2009 11:29 am ET | Updated May 25, 2011

There are a couple of factual defects with this Associated Press lede:

Despite their denials, influential Democratic Sens. Kent Conrad and Chris Dodd were told from the start they were getting VIP mortgage discounts from one of the nation's largest lenders, the official who handled their loans has told Congress in secret testimony.

That's not exactly what the witness, Robert Feinberg, testified. In fact he never recounted what he said to the senators. "Does he remember the exact words he spoke with Conrad and Dodd? No," said Feinberg's handler, attorney Alana Goldstein. "But he always made it clear," that Countrywide's VIP program was a big deal.
Read the disclosed excerpts of Feinberg's testimony. Not once does he ever repeat or paraphrase any statement he made to either senator.
It's perfectly understandable that Feinberg wouldn't remember his specific conversations with Conrad or Dodd, since the loan processor was constantly closing deals. As Feinberg testified, "I wasn't real chatty with people. I was like moving on to the next one, because it's like I said: You have to multi-task like crazy and you're very busy. So I was more just trying to get through each call and get it finished, and get the loan on the books." Dodd's two mortgages represented about 1/500th of Feinberg's 2004 loan volume.
Feinberg's story seems to be, "This is what I must have said to the senators, because this was my standard telephone marketing spiel used with everyone." Consequently, Feinberg told CNBC's Michelle Carbruso-Cabrera that "there is no doubt in my mind" that the senators understood the true meaning of the marketing spiel, which was code for a concealed bribe.
Here's how Feinberg played it during his repeat testimony for Rep. Darrell Issa's staffers:

GOP Staffer: And do you know if during the course of your communications with Senator Dodd were his wife that you ever had an opportunity to share with them if they were getting special VIP treatment? 

Feinberg: Yes, yes. 

GOP Staffer: You did communicate that to him? 

Feinberg: Yes, yes. I mean, they'd already been there to begin with, so they knew. You know, once you're basically in the VIP department you're in. You know, you're done. You don't even have to really talk to Angelo if you don't want to, because as I keep stating, you go back and you see somebody at 850, if you're not sure who they are then you'll talk to somebody. I may talk to Maritza. I may say do you know who this person? Oh, yeah, we did their loan such and such a time, this many years ago, or whatever. Yeah, that's a friend of Angelo's. Okay, we'll go with it. You might ask Doug or you might ask Stephen or somebody.

So even though Feinberg can't recall what he said, the senator must have understood that Countrywide's VIP program was something different from the VIP programs at Verizon, Expedia, the El San Juan Hotel, HIP or Pizza Hut.
While Feinberg's testimony never directly contradicts the senators, it does refute the Associated Press, which reported that the senators were told about mortgage discounts. "We were not allowed to tell anybody what the points were being waived," testified Feinberg. The only "discount" Conrad received was a waiver of a one-point fee on the mortgage for his vacation home, according to Portfolio, which reviewed Conrad's documents.
"The simple fact that Angelo Mozilo and other high-ranking executives at Countrywide were personally making sure Mr. Feinberg handled their loans right, is proof in itself that the senators knew they were getting sweetheart deals," said Feinberg's other lawyer, Anthony Salerno. [Emphasis added.]
Any lawyer would see through Salerno's stunt, which makes a travesty of the rules of evidence. In a courtroom, you need to show personal knowledge -- not just a febrile imagination -- to demonstrate proof of a person's state of mind. Salerno, who straddles the worlds of law and media, knows how the different rules apply. The Los Angeles criminal defense attorney "is a sought-after media commentator, having appeared on CNN, Fox News Channel, and Court TV, as well as on many other television and radio outlets, and in newspapers." When Salerno claimed there was "proof in itself that the senators knew," he wasn't speaking as a lawyer, but as a partisan operative in a media campaign.
Which raises some questions. Why isn't any reporter asking inquiring about Feinberg's contacts with, and possible compensation from, GOP operatives? And why isn't any reporter asking questions about who is paying Feinberg's legal bills?
Once again, for an explanation why Dodd never received a "sweetheart deal," go here and here. For the proof that Feinberg has been lying from the start, go here.
Finally, unlike the AP, I have not been given access to Feinberg's entire testimony before Issa's staffers. But given the consistent pattern of dissembling and lying about Feinberg's story for the past year, it's time for Dodd's accusers to put up or shut up.