Hudson on the Corporate Culture of Countrywide

The Center for Public Integrity’s Michael Hudson continues to turn up whistleblowers and pound on the culture of wrongdoing at the predatory lenders that created the housing catastrophe.

The Justice Department famously declined to go after executives, including former CEO Angelo Mozilo, at Countrywide, but Hudson tracks down former management executives at Countrywide who were fired after raising questions.

Ye shall know them by their fruits, yes. But Hudson finds four former HR executives at Countrywide who talk about the company’s rotten culture and how it was dictated from the top.

Mozilo benefits from the plausible-deniability defense all CEOs use these days when crimes are uncovered at their companies. Hudson is chipping away at that shield, one story at a time:

One of them was Dave Sullivan, an executive vice president and co-author of a book on bad management, “Why Leaders Fail.” Sullivan told iWatch News that Countrywide was “definitely the most top-down company I’ve ever seen. Mozilo was God. Whatever he said went”…

As Niemela immersed herself in the culture and talked to her colleagues, she says, some executives were frank about how things were run, telling her: “Angelo makes every decision. We really are not empowered to make decisions. Angelo signs every expense report. He micro-manages us.”

Here’s Niemela, a former Countrywide HR exec, on the evidence of systemic fraud she came across in routine surveys of employees:

After reading many similar comments, Niemela says, she urged Countrywide executives to open a full-scale investigation of fraud within the company. The investigation never happened, she says. “They just shut the whole thing down. They didn’t want to hear that.”

Hudson links to a Gretchen Morgenson column from February on one of the executives he interviews, Michael Winston, who won a $3.8 million wrongful-termination lawsuit against Countrywide for retaliating against him for reporting an environmental hazard to regulators and for refusing to sign false corporate-governance reports. That column is worth re-reading.

These aren’t low-level people. They’re executive types. What do you want to bet that, like with Eileen Foster, the Justice Department has never bothered to talk to them.

Thankfully for us, Hudson has.

Has America ever needed a media watchdog more than now? Help us by joining CJR today.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,