Housing on the Hill

The revelation that two senators, Chris Dodd (D-Conn.) and Kent Conrad (D-N.D.), received favorable deals from Countrywide, the mortgage lender, is the kind of scandal that spreads.

Dodd and Conrad were identified by Portfolio magazine as the beneficiaries of a program called “Friends of Angelo,” named after Countrywide’s chief executive, Angelo Mozilo.

Both senators say they would welcome an ethics investigation, for it would exonerate them. They say that they neither sought special treatment nor were told that they were receiving it.

Dodd paid an interest rate a fraction of a point lower than was available to other customers, and Conrad had one point knocked off his arrangement fees. Conrad actually spoke to Mozilo, but says this happened only by coincidence; a friend he called for mortgage advice happened to be sitting with Mozilo at the time of the call.

There is no evidence yet that contradicts either of the politicians’ claims to innocence. Only if such evidence is produced should either man be treated other than as honest and upstanding.

But in politics, perception is a large part of reality, and it clearly raises eyebrows that men in power get special treatment denied to others. It particularly raises eyebrows that Dodd, head of the Banking Committee, which supervises mortgage lenders, should have arrived at an ask-no-questions deal unavailable to the wider public.

Behind the scenes, there was some grumbling about double standards. A Republican aide told The Hill that ethics watchdogs would have been up in arms if a GOP banking panel chairman had been discovered in Dodd’s position.

Be that as it may, the bigger point is that the public now holds Congress in profoundly low regard. That Republicans are markedly less popular than Democrats suggests that some of the dislike of Congress is left by corruption scandals that germinated and spread during the GOP’s 12 years in control of the House.

The public hates evidence that Washington’s powerful people enrich themselves, or are able to secure financial and other advantages because of their official positions. There will be many Americans who do not believe protestations of innocence, no matter how genuine they are.

And if there were two senators who unwittingly received cheaper mortgages than others could get, the chances are that more special deals may emerge. With homes being foreclosed all over the country, a scandal involving special cut-price mortgages for the powerful is one that could have resonance. Another Democratic lawmaker, Rep. Laura Richardson (Calif.), is also likely to have her mortgage arrangements scrutinized for improprieties.

The mortgage crisis is rippling through the economy. It is also rippling through the Capitol. If more lawmakers or staff are discovered to have benefited while John Doe paid a higher rate, or if those in influential positions are found to have taken short cuts, the flames of anger flickering around the Capitol could be fanned into a blaze.