From Judicial Watch’s Jill Farrell (background links/info here):
The Federal Election Commission (FEC) notified Judicial Watch this week that it has “closed the file” on our complaint against Senator Barack Obama for allegedly accepting a below market rate mortgage loan in 2005 not available to the general consumer. In its factual and legal analysis, however, the FEC does confirm that Obama obtained a discounted loan but said no laws were violated.
So, to sum: Yes Barack Obama did receive a special below-market loan the rest of us couldn’t get. And a big “no” to the idea that he ought to be held accountable for it. Upset? So are we.
Here’s a bit of the back story.
According to Judicial Watch’s original FEC complaint, filed July 8, 2008, Obama reportedly received a home loan of $1.32 million at a rate of 5.625 percent, although the average going rate on that day according to two different surveys was between 5.93 and 6 percent. Unlike what was reportedly available for the general consumer, this special below market “super super jumbo” loan, was secured without an origination fee or discount points.
According to The Washington Post, which first raised questions about Obama’s mortgage, the favorable interest rate would save Barack Obama $300 a month, which over the life of the 30-year loan, would be at least $108,000. Judicial Watch contends these preferential loan terms constitute an illegal corporate campaign contribution to Obama.
As Judicial Watch noted in its complaint, Northern Trust has supported Barack Obama’s political campaigns for elected office since 1990. Moreover, Northern Trust Vice President John O’Connell essentially admitted the company provided Obama preferential loan terms because of his position in the U.S. Senate. (Obama was a senator at the time.) “‘A person’s occupation and salary are two factors; I would expect those are two things we would take into consideration,’ O’Connell told The Washington Post [emphasis added]. “This was a business proposition for us.”
Now, the FEC’s legal analysis dismissed O’Connell’s admission. The FEC based its decision to exonerate Obama largely on the fact that Northern Trust claims it provided preferential terms to other “similarly situated borrowers” in addition to the Obama. Northern Trust’s new explanation was that 8 of 14 of similarly situated borrowers (including Obama) received a mortgage loan discount.
Who are these unnamed “similarly situated” borrowers? Are they also elected officials? We don’t know because neither Northern Trust nor the FEC have been forthcoming with any details.
Needless to say, as I told the press this week, for the FEC to base its decision to excuse Obama on the fact that a few other unnamed borrowers also received sweetheart mortgages seems irresponsible. Look no further than the Countrywide which doled out corrupt to numerous public officials to see the massive hole in that logic.
The fact is Northern Trust’s president admitted Obama received the loan, in part, based on his position. This is improper and almost certainly constitutes an illegal campaign contribution (or gift). In our view, the FEC’s response is inadequate and it certainly does not serve the public’s interest.