Elizabeth Warren asks Trump nominee Brian Montgomery about his use of the revolving door

Thank You mr. chairman so mr. Montgomery you've been nominated to run the FHA and FHA provides taxpayer back mortgage insurance helps millions of Americans buy homes they might not otherwise be able to afford and unless it's managed well though of course the FHA can expose taxpayers to risk of billions of dollars in losses a very important position here you've run FHA before and now you want to go back and do it again and I want to pick up on senator Browns question about what you've been doing since then your bio says you served as commissioner of FHA from 2005 until mid 2009 what month did you leave if memory serves correct I think I left on July 2nd 2009 ok Berg thinks it's July 15th 2009 but does that sound about right it was it was early July it's not quite 6 months and what month did you officially start a new company called Collingwood group it was about a month later about a month later so one month after leaving FHA you founded and became vice chairman of this new company and according to the Bloomberg story your company was quote known in the housing finance industry as a specialist in helping firms navigate FHA related penalties and lawsuits now Wells Fargo was a client of yours is that right yes Wells Fargo goes uh-huh and in 2016 Wells Fargo paid 1.2 billion dollars for defrauding FHA and as part of the settlement Wells Fargo admitted that it had quote certified to the Department of Housing and Urban Development HUD during the period from May 2001 through December 2008 that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not resulting in the government having to pay FHA insurance claims when some of those loans defaulted now your company was known for helping firms navigate FHA penalties your company had Wells as a client so did your company advised Wells in conjunction with the 2016 settlement with FHA so just that's a lot of questions sent over just a back up for a second the kollywood group existed before I joined the Collingwood group we just regained the name of the company that it was let me just get to the question that my time will run short did your company advise Wells in conjunction with the 2016 billion dollar settlement with the FHA so our firm was involved in helping the law firm that was representing Wells Fargo I personally was not involved I just wanna make sure I have this right you were the head of the FHA when Wells Fargo's submitted thousands of fraudulent mortgages to FHA and costs the government millions of dollars and then soon after leaving FHA you joined this company making money advising Wells Fargo on how to pay back the government as little as possible for defrauding the agency that you ran now let me ask another one mr. Montgomery was US bank also a client of yours so by the way there's about a five year gap in there between me leaving and us doing work for for Wells Fargo until 2016 it was a I'm just guessing about five years later but again I personally wasn't involved in that case what was the period of time that settled is the period of time that involves when you were the head of the FHA I'd have to go back and we know when you were the head of the FHA and we know that the Wells Fargo settlement covers the period that you were the head of the FHA so I'm asking if US Bank was also a client of yours yes Bank was but then had nothing to do with the false claim act well in 24 I'm not asking about false claim I'm asking about what happened while you were running the FHA program because in 2014 US bank paid 200 million dollars for defrauding FHA and in its settlement it admitted quote from 2006 to 2011 it repeatedly certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements did your company advise us bank in conjunction with this settlement I believe we helped look at loan files as I mentioned to you yesterday you know the government asserts material weaknesses a lot of what we did was look at loan files which you know they have a right to defend themselves well we do have a right term in themselves and somebody built a business defending them to help them defend themselves I just like to ask I know I'm out of time I'd like to ask you to provide the committee with a list of the clients that your company advised on FHA related penalties and settlements during the time that you were heading up the FHA and the time that you were with this company you know I've seen some amazing cases of spinning through the revolving door but this one really might take the cake this is someone who has run an agency that puts taxpayer money on the line and while there evidently does not do enough to stop big banks from submitting fraudulent mortgages cause the government millions and millions of dollars then Walsh is right out the door and makes money advising those same banks about how to pay back the government as little as possible for the frauds committed on his watch and now we're talking about going back and doing it all over again you know mr. Montgomery may have the best of intentions but we can never expect the American people to trust Washington if this kind of revolving door continues so I hope that we will reject this nomination respond to that about please do it's the Chairman if he responds well I have time to respond I'm prepared to discuss this topic all day Center viewed like cells ought to be very very clear the government asserts one thing in the false claim Act cases that there's X number of files that you know claims were paid on they extrapolate that number across the entire book of business by the way these clients and their law firms asked us to come in there and said is what the government asserting correct again they have a right to defend themselves and respond in many cases the government wasn't wrong and the government knew they weren't wrong in one instance the government said four hundred million dollars in damages we when did the loan file reviews and guess what it was more like a hundred and twenty-five million sure they paid 125 million settlement but that's a long way from 400 million again I just want to be clear they have a right to say government you weren't correct in this instance and they said you're right and that's why they paid a much smaller slaughter door and you can have the last word but please be brief I will be brief because I think somehow we may be talking past each other I hope we're not my concern is that you were the head of the FHA it was your responsibility to see to it that standards were set so that these banks did not file false claims and then as soon as you leave the FHA you go to a business whose job it is to make sure that these banks who have broken the law pay as small a penalty as possible and now you want to come back to the FHA and run it again this is the classic revolving door in fact it's worse than the classic it is the revolving door at its worst and the American people cannot have confidence in our government so long as the revolving door is spinning like this that people work in government and then go make a profit off the times they worked in government this just isn't right thank you mr. chair I think we should do what's what's fair and that's all we were trying to do senator

Channel: Senator Elizabeth Warren

Views: 171,671

Keywords: brian montgomery, trump, nominee, banking, hearing, elizabeth warren, senate, senator, montgomery

Id: ReCTkS1CJeg

Length: 8min 32sec (512 seconds)

Published: Tue Oct 31 2017