FRONT PAGE CONTRIBUTOR
Congressional Hispanic Caucus sold advocacy for donations
This story in the Wall Street Journal has not been given enough attention. Basically, the Congressional Hispanic Caucus created an entity to advocate for subprime loans to their constituents in exchange for donations to members of the Caucus.
[...] The caucus launched a housing initiative called Hogar — Spanish for home — to work with industry and community groups to increase mortgage lending to Latinos. Mortgage companies provided funding to that group, and to the National Association of Hispanic Real Estate Professionals, which fielded an army to make the loans.
And the donations:
But a close look at the network of organizations pushing for increased mortgage lending reveals a more complicated picture. Subprime-industry executives were advisers to the Hogar housing initiative, and bankrolled more than $2 million of its research. Lawmakers and advocacy groups pushed hard for the easy credit that fueled the subprime phenomenon among Latinos. Members of the Congressional Hispanic Caucus, who received donations from the lending industry and saw their constituents moving into new homes, pushed for eased lending standards, which led to problems.
Now what did groups get for their donations? According to their literature, the Caucus would send out news releases promoting commercial products.
Hogar’s ties to the subprime industry were substantial. A Washington Mutual vice president served as chairman of its advisory committee. Companies that donated $150,000 a year got the right to place a research fellow who would conduct Hogar’s studies, which were used by industry lobbyists. For donations of $100,000 a year, Hogar offered to provide news releases from the Hispanic Caucus promoting a lender’s commercial products for the Latino market, according to the group’s literature.
For whom? A bunch of companies that didn’t make it:
Hogar’s backers included many companies that ran into trouble in mortgage markets: Fannie Mae and Freddie Mac, both now under federal control; Countrywide Financial Corp., sold last year to Bank of America Corp.; Washington Mutual Inc., taken over by the government and sold to J.P. Morgan Chase & Co.; and New Century Financial Corp. and Ameriquest Mortgage Corp., both now defunct.
I don’t imagine that Barack Obama’s Department of Justice will be interested in investigating them. One wonders if this will be an issue in the nomination hearings of Representative Hilda Solis, Obama’s appointment to the Secretary of Labor and a member of the Caucus from Los Angeles. How many corrupt people can she be close to before it becomes a problem?