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Ethics Watchdog Calls for Investigation of ‘Revolving Door’ Between Wall Street and Government

wall-stThe National Legal and Policy Center (NLPChas asked both the U.S. Attorney for the District of Columbia and the Office of Inspector General (OIG) for HUD to investigate the actions of David H. Stevens, former FHA Commissioner and assistant HUD Secretary and current president and CEO of the Mortgage Bankers Association.

The NLPC has asked the D.C. Attorney General and the HUD OIG to investigate allegations that Stevens engaged in unethical conduct by leading a charge to wind down the GSEs for the gain of big Wall Street banks. In response to the announcement by the NLPC, MBA spokesman John T. Mechem vehemently denied the allegations, stating that both Stevens and the MBA are “scrupulous” on ethics and compliance matters.

“Since ending his government service, Dave has regularly consulted with attorneys inside and outside MBA to make sure that he and the Association are always in full compliance with the law,” Mechem said. “Outside counsel to MBA has specifically reviewed Dave's activities on behalf of MBA and its members and has confirmed that Dave has operated fully within the letter and spirit of the lobbying laws and ethics rules.”

Mechem continued, “We believe these unfounded allegations are part of a concerted campaign concocted by a group who apparently have a financial incentive to discredit Dave and MBA's efforts to advocate on behalf of our members for secondary mortgage market reform. Opposing MBA's policy views is one thing, but engaging in false personal attacks is reprehensible.”

David Stevens

David Stevens

A front page story in the New York Times reported on December 7, 2015, the findings of a lengthy investigation which concluded that “lobbying records, legal filings, and internal emails and memorandums, as well as housing officials’ calendars and White House and Treasury visitor logs” documented the banks’ quiet push to remove Fannie Mae and Freddie Mac and grab their share of a residential mortgage market that totals about $5.7 trillion—suggesting a conflict of interest perpetrated by some of the country’s foremost and high-profile housing policy specialists—one of which was David Stevens—who were instrumental in proposing a series of recommendations to wind down the GSEs.

“This is the most egregious instance of revolving door abuse that I have seen in some years,” NLPC Chairman Ken Boehm said. “Even by Washington’s current low standards, Stevens was particularly brazen in apparently ignoring the pertinent statutes and ethics regulations.”

“Allegations like this come up from time to time across various industries, and sometimes they turn out to be nothing more than a witch hunt,” Five Star President and CEO Ed Delgado said. “The laws are very clear in matters like this, and the allegations against Mr. Stevens are serious. However, they are simply allegations at this point.”

While Stevens did not comment on Monday on the NLPC’s requests for an investigation, in December when the allegations first came to light, he wrote on the MBA’s blog, “Let me say emphatically and categorically—I took great care to adhere to all ethics rules and have never done anything unlawful. Every step of the way, from the moment I was first contacted by MBA through today, I have worked closely with lawyers at HUD and continued to consult with counsel while at MBA to make sure every action I took did not even approach the ethical or legal line. At every turn, I erred on the side of caution.”

Click here to see the NLPC’s requests.

Editor’s note: The Five Star Institute is the parent company of DS News and DSNews.com.





About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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