Considering the controversy caused by Countrywide's VIP mortgage program, about which CREW has requested investigations by the House and Senate Ethics Committees, it's probably no wonder the company is shutting down its political action committee:

The political arm of embattled Countrywide Financial Corp., which has donated more than a half-million dollars to candidates and political groups since 2005, is shutting down amid a corporate buyout and ongoing inquiries into whether lawmakers got sweetheart deals from the California-based subprime lender.

Countrywide's Washington-based political action committee filed termination papers with the Federal Election Commission (FEC) on Friday. The report doesn't say why the PAC is shuttering, and its treasurer did not return telephone and e-mail messages on Tuesday seeking comment.

The firm's shareholders recently approved a deal for its takeover by Bank of America.

The company also has been hit with unwanted publicity over its lending practices and reports of a so-called "Friends of Angelo VIP" program, where prominent people got favorable loans through Countrywide's chief executive, Angelo R. Mozilo.

In the wake of the news that Countrywide had provided VIP mortgages to at least two Senators, there has been growing interest the mortgages of other elected officials. Politico is conducting a survey of all Senators. So far, 77 have responded. Some don't think it's necessary:

Many senators who did not provide mortgage information contend that the details are private. Elly Pickett, a spokeswoman for Sen. Michael B. Enzi (R-Wyo.), wrote in an e-mail to Politico: “Sen. Enzi’s mortgage isn’t with Countrywide, and since that company is at the center of this issue, I fail to see how having a loan with another company is at all relevant.”

Similarly, a spokesman for Sen. John Thune (R-S.D.) e-mailed that his boss did not need to disclose details: “The senator was a private citizen when he and his wife obtained their mortgage through a local bank, which was not Countrywide,” wrote Thune spokesman Kyle Downey.

Why not disclose is a relevant question in the wake of the news about Countrywide's program. Melanie Sloan explains:

Disclosing all mortgage details “makes them more inclined to be sure they’re not getting any special deals, because it’s being disclosed,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. “Why not just disclose [mortgages] and get rid of a potential issue?”

CREW has written to both the Senate and House Ethics Committees asking for investigations into members of Congress that may have received loans in violation of existing gift bans in light of a news report detailing favorable loan terms given to current and former public officials by Countrywide Financial. The letter can be found here.

According to Portfolio.com, Countrywide had a “V.I.P.” program that waived points, lender fees, and company borrowing rules for prominent people, including at least two members of the U.S. Senate, Senator Christopher Dodd (D-CT) and Senator Kent Conrad (D-ND).

In 2003, Sen. Dodd received two loans under the program: $506,000 to refinance his Washington, D.C. home and $275,042 to refinance a Connecticut home. Countrywide waived three-eighths of a point on the first loan and one-fourth of a point on the second. The interest rate on the loans, which both started at 4.875% was reduced to 4.25% on the Washington home and 4.5% on the Connecticut home by the time the term of the loans began to run.

In 2004, Sen. Conrad borrowed $1.07 million to refinance his vacation home, a loan for which Angelo Mozilo, Countrywide’s chief executive, ordered a Countrywide employee to “take off 1 point.” Later that year, Sen. Conrad refinanced an eight-unit apartment building he owned with his brothers in North Dakota. A former Countrywide employee told Portfolio that the loan violated Countrywide’s normal policy of providing loans only for buildings containing four or fewer units. An April 23, 2004 email from Countrywide’s CEO Anthony Mozilo told an employee to “make an exception due to the fact that the borrower is a senator.”

Although there is no evidence that either Sen. Dodd or Sen. Conrad were aware they were receiving special treatment from Countrywide, their receipt of the unusually favorable loans creates exactly the sort of appearance of impropriety that the gift rule was designed to address.

Moreover, given that “loans” are included in the definition of “gifts” in the Senate ethics manual, if they knew they were receiving loans from Countrywide on terms generally not available to the public, Sen. Dodd and Sen. Conrad may have violated Senate gift rules.

CREW has asked that the Senate Ethics Committee investigate Senators Dodd and Conrad, and that both the Senate and House Ethics committees look into whether any other members of Congress received similarly favorable loans from Countrywide. CREW also suggested the committees consider creating a system to review loans applied for by members, or create guidelines to ensure that loan terms meet the requirements of the gift rule.

Melanie Sloan, executive director of CREW, said:

Today’s story raises more questions than it answers. Did Senators Dodd and Conrad know they were getting particularly favorable loans? Were the terms of the loans too good to be true? Should the terms have raised a red flag for the senators? Is this the tip of the iceberg? Are there other public officials who received similarly beneficial loans? The fact that senators may have unknowingly received loans on terms not available to the public suggests that members of Congress need a way to vet their loans. The ethics committees should pro-actively establish such a vetting process or at least guidelines for members of Congress seeking loans. The public needs to have confidence that members of Congress are not taking advantage of their elected positions to get better deals on their mortgages.