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Investors Lose Billions, Thousands Lose Homes- While McHenry Pads his Warchest

On Thursday, March 6th, Rep. Patrick McHenry and the other members of the Congressional Oversight Committee questioned Countrywide Financial Corp. CEO Angelo Mozilo (and other CEOs) concerning his multi-million dollar salary package as well as the over $120 million he made by selling his personal holdings of the company's stock just prior to the company's financial collapse. Under Mr. Mozilo's management, Countrywide's stock value has plummeted, stockholders have lost billions, over ten thousand employees have lost their jobs, the stock market has tumbled, and tens of thousands of families have lost their homes.

On the following Saturday, the Wall Street Journal reported that the FBI is now investigating Countrywide Financial for securities fraud, checking into whether the company misrepresented its financial state and the condition of its mortgages in its financial filings. This investigation may also involve as many as 15 other subprime mortgage lenders.

While other congressman grilled Mr. Mozilo about his excessive compensation, McHenry's treatment of him during this hearing could only be described as sympathetic and supportive. This should come as no surprise, however, since between 2005 and 2007 McHenry accepted $5000 in campaign contributions from Countrywide Financial and over $160,000 from other Real Estate PACs. In addition, McHenry has received almost $23,000 from Bank of America—which is in the process of acquiring Countrywide.

Even though this subcommittee was investigating the possibility of wrongdoing by subprime lenders, McHenry, who has profited from their successes, refused to remove himself from this hearing. (See video transcript on CSPAN.org, "House Oversight and Gov't Reform Cmte. Hearing on CEO Compensations – Panel 2")

This is yet another example of a "Washington insider" and career politician protecting campaign contributors at the expense of thousands of investors and home owners who now find themselves "out in the cold."

This is also another example why a change is needed in Washington, and why I am challenging Mr. McHenry in the May 6 Republican primary.

Lance Sigmon
Republican Candidate for Congress
Newton, NC