Mass.Governor made call on behalf of Troubled lender

The Boston Globe reports:

Governor Deval Patrick, who was criticized during the gubernatorial campaign for his involvement with a controversial subprime mortgage lender, called a top official at Citigroup, former US Treasury secretary Robert E. Rubin, two weeks ago to intercede on behalf of the owners of Ameriquest Mortgage as they sought urgent financial assistance from the global financial giant.

In a statement to the Globe, Patrick said he made the Feb. 20 call to Citigroup not in his role as governor but after a personal request to him from a top official at ACC Capital Holdings, the firm that owns Ameriquest Mortgage, which has frequently been accused of predatory lending.

Citigroup, the world's largest financial company, has a host of business interests in Massachusetts, many of which are regulated by the state. A key Citigroup subsidiary handles lucrative bond work for state agencies. In addition, Ameriquest is licensed by the state Division of Banks.

In the conversation, Patrick vouched for the "current management and the character of the company," said Kyle Sullivan, his spokesman. Sullivan said Patrick told Rubin that he was serving as a personal reference for ACC as its owners pushed for the quick cash infusion from Citigroup that would stabilize their struggling lending firm.

"They had a very short phone conversation lasting only a couple of minutes," Sullivan said. "He did not advocate in any way for a deal between Citigroup and ACC Capital. He simply offered himself as a reference."

Sullivan would not elaborate further on what Patrick said. Patrick was asked to make the phone call by Adam Bass, senior executive and legal counsel to ACC Capital, Sullivan said.

Patrick resigned last year from the ACC board after serving nearly two years as a director, for which he was paid $360,000 a year. Sullivan said that Patrick received no compensation for making the call and that the governor has no financial interest in ACC Capital.

But the call to Rubin is highly unusual, in part because of the political sensitivity over his past involvement with the controversial mortgage lender. In addition, if a sitting governor reaches out personally to a top corporate executive, it is typically on behalf of state interests, such as a desire to preserve jobs in Massachusetts.

If Mr.Patrick were a Republican, he'd be in big trouble.The mortgage lending meltdown is going to bring down some politicians.You can count on that.