Now that it is official that the Feds are investigating Countrywide’s “VIP” home loan program, it’s time to revisit one of the key problems in disclosure that abetted the hiding of these loans. Since every member of Congress is required to file an annual personal financial disclosure report it would seem as though the public would have the ability to know which lawmakers received loans from which mortgage company and at what rate. Unfortunately, personal financial disclosures do not require lawmakers to list private residences or any home that does not generate income (ie: rent).

This is a problem with an easy solution. Earlier this year, numerous lawmakers, including Rep. Mark Souder and members of the Senate Ethics Committee, introduced bills to require limited, but adequate, disclosure of personal residences. Now that this issue is back in the headlines Congress should move quickly to address future concerns and tackle the myriad other problems with the personal financial disclosure forms.

The Sunlight Foundation’s Executive Director Ellen Miller had an op-ed in Roll Call (sub. req’d) earlier this year that addressed the failings of the personal financial disclosure:

…Congress must make personal financial disclosures more transparent and accurate. All of the manners in which lawmakers obscure their finances must be eliminated. Exact dollar figures must replace ranges. Loopholes for residences that do not generate income should be closed. Lawmakers must reveal how much stock they own, show who they are doing business with when engaged in a partnership, and list property in a more transparent manner. Personal financial disclosure reports must live up to the desire of Congressional leaders to operate in an open and honest manner.

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An investigation begins into the Friends of Angelo. Stevens’ conviction prompts reform group push. Some people don’t like transparency. That and more in today’s news:

“Friends of Angelo” beware! The FBI is investigating the “VIP” home loan program for public officials operated by Countrywide. Countrywide chief Angelo Mozilo made sure that public officials who could be influential in matters relating to his business received “VIP” rates on interest rates and loan fees. Sen. Chris Dodd and Sen. Kent Conrad both received “VIP” loans from Mozilo’s Countrywide. They are currently both cooperating with a Senate Ethics Committee investigation. The operator of the “VIP” program Robert Feinberg spoke to federal investigators noting, “he’s not aware of any discounts linked to favors, but he did see e-mails noting the potential value of the relationships to Countrywide’s political and business interests.” Both Conrad and Dodd stated that they did not know that a “VIP” program would provide them with special perks and savings. Feinberg, however, responds, “nine times out of ten, once you mention ‘V.I.P’ the person’s gonna ask you ‘what am i getting for being in this V.I.P department?’ Or ‘what am I getting because I know Angelo?’ Or ‘I talked to Angelo and he said I’m getting this.’”

Sen. Ted Stevens faced a welcome reception among fellow Republicans in Alaska as he denounced the “corrupt prosecutors” who successfully won seven convictions against the seven-term senator. Back in Washington, reform groups are organizing to pressure the Senate to create an independent body, working in conjunction with the Senate Ethics Committee, to oversee ethics complaints. The House approved an independent oversight board this year. The ethics committees in both chambers have taken flack for failing to properly police their members. While the ethics process has, since the eighties, primarily been used as a partisan tool, the system completely shut down after former Majority Leader Tom DeLay was reprimanded multiple times for various abuses of House rules.

Some dare call it transparency. The Aspen Times reports on local political donors who are uneasy about the availability of campaign contribution information online. Most of these individuals did not know that their contributions would be part of the public record and are upset that Google searches for their name turn up their political contributions. Involvement in the activities of public figures, particularly the financing of them, requires disclosure to ensure an open and honest system of governance. There is no reason to fear Big Transparency.

If you’re paying attention to the presidential campaign and checking polls every half-hour you may want to check a decent predictor of the outcome, lobbyist shuffling on K Street. Comcast recently fired their Republican lobbyist Kerry Knott, a former Dick Armey aide, and replaced him with Melissa Maxfield, a former aide to former Sen. Tom Daschle. Daschle is, of course, a top aide to Sen. Barack Obama and noted as a potential White House Chief of Staff or cabinet secretary, in the case that Obama wins the Nov. 4 election. Companies are already girding up for future battles by taking on lobbyists who would have influence in a potential Obama administration.

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Sen. Ted Stevens may have been convicted yesterday, but his saga continues. Which occupation saw a 13% rise in wealth over the past year? Congressman! That and more in today’s news:

Yesterday, Sen. Ted Stevens became the first sitting senator to be convicted of a felony since Sen. Harrison Williams in 1981. Despite the seven convictions for filing false statements to the government, Sen. Stevens vowed to fight on and appeal his conviction on the grounds that the prosecution was flawed, “I am innocent. This verdict is the result of the unconscionable manner in which the Justice Department lawyers conducted this trial.” Stevens’ chances in his quest for reelection appear to have dimmed as presidential candidate John McCain, Senate Minority Leader Mitch McConnell, and National Republican Senatorial Committee chairman John Ensign all rebuked the convicted Alaska statesman. Still standing by Stevens is Alaska’s lone representative in Congress, Don Young. Young’s endorsement of Stevens’ innocence was marred by Young’s praise for and comparison of another political figure to Sen. Stevens, “I think he can win. He’s the best thing for that, for the Senate. Alaskans know this. [...] I think that’s going to be, you know, a matter of opinion. I can remember Richard Nixon, you know, his years of service, what he’s done, and everybody were ridiculing him and he ended up being the greatest president in the history of our century.” With friends like these…

Over the past year, members of Congress saw their collective wealth increase by 13%, according to personal financial disclosure data collected by the Center for Responsive Politics. McClatchy reports that 2 out of 3 senators are millionaires, while 39% of the entire body of 535 members are also worth more than $1 million. As the paper points out, “Only 1 percent of all Americans are considered millionaires.”

MAPLight.org released a study looking at in-state vs. out-of-state campaign contributions to members of the House of Representatives. The findings are noteworthy, “Virtually all House members, 97%, raised more than half of their funds from out-of-district (408 out of 421 members).” Check out the report and this graphic below (which is interactive at the MAPLight site):

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Jury deliberations continue in the Stevens ethics case. Rep. Lincoln Diaz-Balart faces questions about an earmark to a company doing business with Venezuela. Today’s news:

Yesterday, the Stevens jury deliberated for the first time and decided to call it a day after 4 hours of what they termed “stressful” negotiations. Today, the jury has already sent three notes to the presiding judge. One note asked for the specifics in the law requiring the reporting of liabilities on financial disclosures. The judge wanted to tell the jury that liabilities with a value of more than $10,000 must be disclosed, but the defense team said that was too specific and asked the jury simply be handed a copy of the requirements. Another note was more serious and could lead to a juror’s removal from the trial. A female juror is identified as “being rude, disrespectful and unreasonable” and engaging in “violent outbursts with other jurors”. If the juror is removed she will be replaced by an alternate, likely a man in his 20s. The Alaska Daily News covers another aspect of the trial: what happens if Sen. Stevens is found guilty and then wins reelection? I have another question, what does the Senate Ethics Committee do if Sen. Stevens is acquitted?

Rep. Lincoln Diaz-Balart earmarked funds to a defense firm that previously shipped surveillance equipment to Venezuela, not exactly the best friend of the United States. Phoenix Worldwide Industries President Esquivel Shuler called the pursuit of the earmark, “a shot in the dark for us.” Diaz-Balart has faced a number of questions regarding earmarks he sought for large campaign contributors.

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Third quarter lobbying disclosure reports tell the story behind financial services lobbying in the lead up to the Panic of ‘08 and the ultimate bailout. Jurors now get to decide Sen. Ted Stevens’ fate. That and more in today’s news round-up:

Two competing articles from The Hill and Congressional Quarterly wind up telling the same story. The Hill’s article is titled, “K Street earnings fall.” The CQ article’s opening sentence states, “K Street emerged from the third quarter of 2008 looking substantially better off than Wall Street.” Both are certainly true; I have yet to hear of a lobbying firm being nationalized. The main thrust is that, despite falling lobbying expenses, financial services companies, in particular, can no longer afford to look at lobbying expenses as “discretionary expenses.” While I’m not sure that they ever did - the return on investment in lobbying is usually in the tens of billions for these companies - it is certainly true that lobbying is a lifeline for some companies right now. Lobbying was also a part of what got the financial services and housing industry into this mess, consistently opposing any oversight or regulation that could have prevented the precipitous slide into panic. As lobbying will be so important to these companies in the future, Congress should impose new disclosure requirements on lobbyists, especially those operating for companies receiving bailout bucks. I think something like this would be more than fair.

After a bipolar performance by the Stevens defense and a repetitious pounding from the prosecution during closing statements the jury will finally get to decide whether the Alaska Senator falsely concealed gifts he received when filing his financial disclosure forms. We await their decision. This is how I’m imagining the scene in the jury room right now.

Sunlight’s Nancy Watzman takes a look at Sen. Elizabeth Dole’s fundraising parties over at Party Time, “The deep connections that Dole enjoys thanks to her extensive GOP pedigree–she served in two cabinet posts and of course is married to former Senator Bob Dole (R-KS)–is evident when you dig into the meat of the invitations.”

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AIG says it won’t spend bailout funds on lobbying, as other financial services welfare recipients acknowledge that lobbying expenses will need to be scaled back. That and Sen. Stevens does himself a disservice on the stand.

The Wall Street Journal and the Politico report that AIG, in the face of withering criticism, will suspend all lobbying activities while it is majority owned by the federal government. AIG initially refused to halt lobbying even after it had received a $120 billion bailout from the government. Sens. Dianne Feinstein and Mel Martinez sent a letter to AIG demanding that they not spend taxpayer dollars on lobbying activities. Sen. Feinstein also told the Politico that she will introduce legislation that would ban all bailout recipients from using taxpayer money on lobbying expenses. Feinstein’s efforts signal of new lobbying backlash in Congress. Perhaps, instead of this targeted, temporary response Congress insisted that all lobbyists file full disclosures that list the official lobbied, the issue or bill lobbied on, and all other activities related to lobbying within 24 hours of any contact. If we are trying to get to the root of the problem in the economic crisis, we need to get to the root of the governmental crisis that prevented action from being taken earlier.

Up until yesterday, the trial of Sen. Ted Stevens had been wholly unremarkable, except for the apparently pathetic effort by the prosecution. Yesterday, however, Sen. Stevens did himself no favors by redefining words in the dictionary that are key to his trial - words like “gift.” On the stand, Stevens insisted that a $2,695 chair given to him by Alaska restauranteur Bob Persons and that he has kept at his Virginia residence for seven years was not a gift. Stevens told the jury, “He bought that chair as a gift, but I refused it as a gift. He put it there and said it was my chair. I told him I would not accept it as a gift.” The prosecutor asked Stevens where the chair is now, to which the senator replied, “In our house. We have lots of things in our house that don’t belong to us, ma’am.” This trial was probably headed towards acquital before Stevens took the stand and said this. A gift isn’t a gift if you say it isn’t a gift; and we sure do have a lot of those at our home. That is not what the defense was hoping for. Also troubling for Sen. Stevens is the apparent admission that he misused Senate staff by having them handle his and his wife’s finances.

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Like a man sinking in quicksand, Rep. Charles Rangel continues, with every flailing day, to sink further as more discrepancies are revealed in his personal financial disclosures. New revelations show Rangel’s disclosures to be in complete disarray. Some assets and transactions are listed at high values one year and then listed at no value the next. The Associated Press compiled a list of the erratic disclosure listings.

The New York Times called on Rangel to temporarily step down from the chair of the Ways and Means Committee barring an ethics investigation. It looks like too many are having flashbacks to the Democratic scandals of the ’80s and ’90s that felled numerous congressional leaders.

The Washington Post takes a look at how business connections fuel bundled political contributions. One major Bush and McCain bundler, John Vogt, calls it the “favor arbitrage business,” where, “You’ve got to know who to ask, how to ask and more importantly, you have to be prepared to return the favor.”

Rep. John Doolittle has been under investigation for a long time - longer than this presidential election - and it looks like Kevin Ring’s indictment brings that investigation that much closer to his door step. Ring is accused of hiding Doolittle’s attempts to find a job for his wife from federal investigators. As McClatchy Newspapers reports, “[Ring's] apparent desire to protect the Doolittles is now figuring very prominently in his legal troubles.”

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According to both the New York Times and the New York Post, Ways and Means Chairman Charles Rangel sporadically reported income and a mortgage on property that he owns in the Dominican Republic. Since purchasing the property in 1988, Rangel reported varying accounts of his property personal financial disclosures and failed to report any income on his state and federal tax returns. It is unclear as to whether he has run directly afoul of any law at the moment, but, yet again, here is another instance where the ambiguity in reporting on personal financial disclosures is in full display.

The New York Post ran up this handy graphic on the variations in disclosure reported by Rangel over the years:

What appears most suspect here are the repeated trips to his vacation home paid for by outside groups, including American Airlines and a three-day, all expenses paid trip by the Dominican/American Roundtable. Does a congressman really need private entities seeking legislative influence to pay the airfare for trips to his vacation home?

After numerous reports on disclosure failures and inappropriate fundraising practices, this doesn’t bode well for Rep. Rangel. Clearly he is having a bad year, and the digging by journalists will only continue.

Charles Rangel’s Personal Financial Disclosures (back to 1995) are available at Open Secrets.

Also, to see Charles Rangel’s growth in wealth from 1995 to 2006 go to Fortune 535.

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Since the presidential race has turned into an episode of MTV Cribs - next up, web ads with seizure inducing editing of million dollar homes - I figured that it would be worth while to look at the personal financial disclosures of John McCain and Barack Obama to see what information we can find on their houses.

Oh wait, what’s that? Personal financial disclosure rules don’t require the listing of residential properties. That’s why no one knew about Chris Dodd’s favorable mortgage from Countrywide or Rep. Laura Richardson’s two foreclosures.

Looking at Obama and McCain’s form I can see that some of McCains eight to eleven residential properties are listed under Cindy McCain’s name while Obama’s home is not listed. Here are some of the ones listed on the McCain financial disclosure:

Residential Real Estate Held for Investment, Coronado, CA - Over $1 million

Sedona Property, Cornville, AZ (Two Parcels. Parcel 1: Residence and Guest House. Parcel 2: Guest House.) - Over $1 million

Those are only two residential property listings that appear in both candidates financial disclosures. There are few proposals flying around Congress to require home disclosure on personal financial disclosures. Perhaps they should address this.

On another personal financial disclosure related topic, I noticed the Mark Nicholas used our Fortune 535 site to compare the net worth of Barack Obama and John McCain. Unfortunately, the site uses as its most recent filing, the 2007 report, which represents the year 2006. This was prior to the huge profits made by Obama through royalties from his latest book. So, if you want to get the most recent average net worth, you’d have to look at his 2008 report (covering 2007), in which he reports well over a million in assets.

John McCain is another story. McCain is the only member of Congress who still checks a box that lists asset value at “Over $1 million”. He does this under an exemption rule allowing the filer to not identify the actual range, over $1 million, if the asset is held by a spouse or dependent child. I should reiterate that McCain is the only member of Congress who claims this exemption and fills out the “Over $1 million” box for many assets. John Kerry, Dianne Feinstein, Jane Harman, and Nancy Pelosi all list the highest accurate value range for their spouse’s large holdings; John McCain does not. Considering this, John McCain, when combined with the actual value of Cindy McCain’s holdings, is worth much more than the amount we extracted from his personal financial disclosures for Fortune 535.

Bottom line: Obama worth more than listed and McCain worth way more.

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TPM Muckraker captured some great audio of Sen. Ted Stevens lashing out at constituents asking questions about his current legal predicament. To me, the last question was by far the most interesting. There’s a transcript of the last Q&A after the video.

Q: I’ve been following the news lately and they were mentioning that you supported an ethics bill in 1989 that Congress had passed, it was an amended ethics and government bill that said that members of Congress needed to disclose their financial reports, anything exceeding $200, and now your defense team is saying that’s unconstitutional, and I’m just wondering if you can talk to us Alaskans about how that’s unconstitutional in 2008 but in 1989 that was satisfactory.
A: As I’ve said before, I haven’t seen that pleading, it was filed by my lawyers in Washington, they’ve been hired to do it-
Q: OK well why don’t you give us your opinion, aside from what your lawyers are saying-
A: I’m sorry I’m not going to give my opinion about what my lawyers have done that I haven’t read. So thank you very much, I don’t know who gave you that amendment, that question, but whoever gave you that question ask them.

That’s a pretty good question. From what I can tell, the Government Ethics Reform Act of 1989 passed the Senate by voice vote with an amendment attached. Also interesting, Sen. Stevens was an original cosponsor of the Ethics in Government Act of 1977, the law under which he is being prosecuted.

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