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How McKeon’s Two-Bit Bribe Resulted in a $1 Billion Lawsuit

By Defeat Buck • On October 25, 2012
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Buck McKeon's Mug Shot

Further Consequences of McKeon's Discounted Countrywide Loan


The federal government today announced a $1-billion civil lawsuit against Bank of America for fraudulent lending practices of its Countrywide unit, which was acquired in 2008 at the height of the financial crisis.

The government alleges that Countrywide engaged in an well-coordinated scheme to fraudulently deceive mortgage finance giants Fannie Mae and Freddie Mac into believing the company’s risky loans were safe and sound.

The suit charges Bank of America, via Countrywide, engaged in a “scheme to defraud the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) (collectively, “government sponsored enterprises” or “GSEs”) in connection with Countrywide’s residential mortgage loan business.”

Countrywide handed out loans to consumers like candy to kindergarteners, falsifying incomes and failing to verify employments, flagrantly disregarding the recipients’ ability to pay it back — and then covered up the crimes in their reports to Fannie and Freddie, giving the impression that sound underwriting standards were employed.

By deceiving the GSEs about the quality of the loans, Countrywide inflated the mortgage balloon, which directly led to the housing crisis and ensuing recession.

These illegal lending practices and the subsequent lawsuit are direct consequences of the bribes Buck McKeon and other lawmakers accepted from Countrywide as part of the “Friends of Angelo” VIP loan program,  where members of congress were given personal discounted loans in exchange for votes favorable to the lender.

In July 2012, the House Oversight and Government Reform Committee, following a three-year investigation, released a report that confirmed existing allegations that McKeon received preferential treatment from Countrywide when obtaining a $315,000 mortgage loan in October 1998.

Through the lender’s “VIP Program,” Countrywide reduced the interest on McKeon’s loan by 1 percent, waived all processing fees and did not require any income documentation.

Many watchdog groups and private citizens, including Dr. Lee Rogers, McKeon’s challenger in the contest for California’s 25th District, contend the VIP loan influenced McKeon’s vote to raise Federal Housing Administration loan limits in 1998. Higher loan limits was “one of the policies that helped lead us to the housing market crash of 2008,” Rogers wrote in a July 9 op-ed in the Santa Clarita Valley Signal.

The following timeframe certainly aligns with that assertion:

On Oct. 6, Congress passed HR 4194, which increased the FHA loan maximums as an amendment to a Veterans Affairs authorization bill. McKeon voted “yes” on that measure.

On Oct. 7, McKeon’s loan was approved and he was sent the “opening package” of loan documents indicating the VIP team had processed the loan.

The McKeon-Countrywide scandal has had far-reaching and devastating effects that will still be felt years from now.

“Countrywide was the poster child for the problems that precipitated the financial crisis,” said Kevin Stein, associate director of the San Francisco-based California Reinvestment Coalition.

“We’re still seeing the effects in terms of people going into foreclosure as a result of the Countrywide practices,” Stein said. “People are still suffering.”

Taxpayers have spent $170 billion to keep Fannie and Freddie afloat, as part of the TARP bank bailout program [Buck McKeon voted to support], and it could cost $260 billion more to support the companies through 2014 after subtracting dividend payments to taxpayers, according to the government.

– LA Times

If Countrywide was the ”Poster Child” for the financial crises,  then McKeon certainly qualifies as the “Poster Bastard Child.”  In addition to the sweetheart deal on the mortgage, McKeon received thousands in campaign contributions from Countrywide. A recent analysis by the Center for Responsive Politics showed that McKeon was “among the top ten all-time recipients” of Countrywide cash.

Buck McKeon’s corruption led directly to the financial meltown and ensuing recession. Let’s clean up Washington by doing a little housecleaning here at home.

Replace Buck McKeon with Dr. Lee Rogers on November 6th.

Further Reading:

US suit cites ‘brazen’ mortgage fraud at Countrywide, even after Bank of America purchase

Buck McKeon Under Fire For Loan From Countrywide

U.S. sues BofA, calling loan fraud ‘brazen’

The Buck Stops Now
Defeat Buck McKeon

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Buck McKeon Has Never Earned a Private Sector Paycheck

By Defeat Buck • On May 8, 2012
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buckgrin

McKeon Went Straight From Bilking the Family Business to Bilking the Government


Representative Howard P. “Buck” McKeon likes to tout his anti-government, pro-private sector positions:

“…it’s time for policies that empower small businesses, restore consumer confidence, and create private-sector jobs.”

– Buck McKeon, website

The irony is that McKeon, himself, has never earned a private sector paycheck in his entire life.

As a young man, McKeon inherited a 20 percent share of a multi-million dollar business from his parents. Many of you may remember Howard & Phil’s Western Wear as THEE place to go for cowboy boots, ten-gallon hats and fancy, long-sleeve shirts with pearly buttons. I remember my parents were into square dancing for a brief period of time, and they would buy all their gear at Howard & Phil’s. The company was founded by McKeon’s parents in 1962, and grew into an empire by the 1980s thanks to films like “Urban Cowboy.”

At its height, Howard & Phil’s Western Wear had 52 stores throughout the western United States, annual sales of $38 million and and employed 500 people.

“As someone who has run a small business, I know the challenges businesses face, especially in a tough economy. Just as a business must balance its books and watch the bottom line, our government must return to policies of fiscal discipline.”

– Buck McKeon, website

Yes, he ran a business -– he ran it into the ground. After years of mismanagement, Buck put hundreds of employees out of work and left creditors in the dust. The company went belly-up, as they say, but not before McKeon made off with millions for himself.

In 1992, as the family business continued to falter and he was no longer able to take his draw, Buck was elected to the House of Representatives. His personal wealth continued to dwindle, however, along with the business. In 1998, as Howard & Phil’s was going through a Chapter 11 bankruptcy, McKeon apparently struck paydirt — his finances were kept afloat by a special low-rate mortgage he received from Countrywide Financial to refinance his home – a rate unavailable to the rest of the public.

This seems to be the first taste Buck had of using his elected office for personal gain.

For the last twenty years, McKeon has been employed as a U.S. congressman, deriving his earnings from his government salary of $174,000 plus the corporate donor money he funnels to his wife, Patricia McKeon, about $150,000 per year.

Perhaps one can consider the cash the McKeons receive from Boeing, Lockheed, et al, as “private sector” paychecks, but they are technically made out to his wife, so the premise remains intact:

Buck McKeon has never received a private sector paycheck in his life.

We think it’s time he start experiencing work in the private sector for a change, and we know a way to help him along.

Vote Buck McKeon out of office, give him a chance to get a real job somewhere and the opportunity to see what real employment looks like.

 

The Buck Stops Now

Defeat Buck McKeon

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McKeon Paid $90k to Company Outside his own District to Print Campaign Materials

By DefeatBuck • On August 19, 2010
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McKeon paid $90,000 to this company in Chatsworth, rather than hire from within his own district.

McKeon's Expense Records Reveal Lack of Support for Small Business in the 25th District


McKeon paid $90,000 to this company in Chatsworth, rather than award the job to a firm within his own district.

According to Federal Election Commission records (Jan-Jun 2010), Buck McKeon paid a printing company located in Chatsworth California $90,000 to print his glossy campaign mailers, instead of bringing the job to one of the many qualified commercial printing facilities located in his own district.

Had McKeon possessed even the smallest amount of concern for his constituency, he could have gotten bids from local printers to show his commitment to improving our economy.  Instead, he engaged the services of a firm located in the adjacent 30th Congressional District, represented by Democrat Henry Waxman.

Of course, the Congressman is free to spend his campaign money anywhere he desires. But expending funds just outside the gerrymandered boundaries of his own district, when there are plenty of qualified vendors on the inside, is a hard smack across the face to the very businesses he pretends to care so much about.

$90,000 may not seem like much to McKeon and his golf course cronies, but that money could have made a real difference to a struggling company in the Antelope or Santa Clarita Valleys. 

The only enterprise McKeon cares about is getting re-elected and keeping his powerful position in Washington; he couldn’t give a Buck about the financial problems of some unidentified small business.

I guess the only thing McKeon pays to business owners in the 25th District is lip service.

Buck McKeon must go.

Defeat Buck McKeon

The Buck Stops Now

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Congressman Buck McKeon Spends and Spends and Spends

By DefeatBuck • On August 6, 2010
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Rep. Buck McKeon Sure Knows How to Spend Money, Especially When it's Not His Own


It’s nice to know that while Americans and businesses are hurting in this economy, Congressman Howard P. “Buck” McKeon was able to spend $2000 on getting logos printed on his golf balls.  But that’s nothing compared with the tens of thousands of dollars he spent actually playing golf, presumably with his logoed balls.

For a “fiscal conservative,” he sure spends a lot of his donors’ money on parties, golf and hotel lodging, most of it at companies outside of his own district.

Of note: Located next to Ruth’s Chris Steakhouse, at 2231 Crystal Drive in Arlington, Virginia —  where Buck spent over $2000 at a fundraiser — are defense contractors General Dynamics, IAP Worldwide Services, Lockheed Martin Management & Data Systems Services, and others. TCI Technologies is located in the building next door, with Boeing and KBR down the street.

The Hyatt Hotel in New York, where he spent $929.08,  is located kiddy-corner from the national headquarters of Northrop Grumman, Buck’s number one PAC contributor.

But don’t take our word for it. The Federal Election Commission public records reveal that during the first half of 2010, Rep. Howard “Buck” McKeon disbursed funds from his Buck McKeon for Congress PAC and his 21st Century PAC funds to these businesses:

Aaron, Thomas & Assoc. Inc., Chatsworth -- $90,000.00

Aaron, Thomas & Assoc. Inc., Chatsworth -- $90,000.00
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Picture 1 of 43

For "Printing Services" in Chatsworth, California -- that's in the 30th Congressional District, represented by Democrat Henry Waxman. I guess Buck didn't realize there were printing companies in his own neighborhood -- small businesses that would have welcomed a $90,000 job."

[source: U.S. Gov FEC records Jan-Jun 2010]

Buck also expended 19 payments of varying amounts totaling $5,955.90 to United Airlines for travel or campaign travel during the first six month of 2010 from his BMfC PAC.

His BMfC PAC also paid $166.24 to XM Satellite Radio. He paid AT&T $1,028.91 and $2,159.49 to Verizon Wireless from his BMfC PAC as well. And, he paid himself a total of $1,151.07 for reimbursement of travel meals, plus $217.73 to his wife for the same purpose.

Of course, not everything is paid for out of Buck’s PAC funds. For instance, during the second half of 2009, Buck spent $965.35 on bottled water and $19,293.65 on “franked mail” paid for from the U.S. Treasury. Your tax dollars at work for you.

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Buck McKeon Wants to Spend $3 Billion on a Couple of Turkeys

By DefeatBuck • On June 10, 2010
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Defense contractors are trying to sell lawmakers a $3 billion spare engine for the F35 Joint Strike Fighter -- an engine the Pentagon says it does not need or want.

So why is Representative Buck McKeon so insistent on buying it?


(Continue reading…)

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Champion of Offshore Banking

By DefeatBuck • On April 13, 2010
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When Cuba invaded the Island of Grenada in 1983, we sent in the Marines. I know because Clint Eastwood starred in a movie about it called Heartbreak Ridge. Supposedly we kicked Communist Cuban butt to protect the American students at the medical university on the island, but considering there was one bank for every 64 residents in the capital city of St. George, some historians suggest the real purpose of the invasion was to protect the offshore banks that rich Americans use as a tax haven or for money laundering.[1] (Continue reading…)

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