BISMARCK -- It's safe to say few North Dakotans knew their senior senator owned a million-dollar seaside vacation home in Bethany Beach, Del.

Sen. Kent Conrad, D-N.D., isn't upset that people now know about it. After all, he says, he's tried numerous times over several years to list it on his Senate financial disclosure form, only to have the Senate's Office of Public Records nix the idea as a security risk.

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He describes the property, about a block from the beach in the southern Delaware resort community, as "kind of a traditional beach cottage." The 2,600-square-foot home has four bedrooms, a great room and a porch, with parking underneath. He and his wife, Lucy Calautti, bought it new in 2002.

What bothers Conrad is how wrong so many news reports and editorials have been in the week since Portfolio magazine broke the news that it had obtained Countrywide Financial e-mails directing loan officers to give Conrad, Sen. Chris Dodd, D-Conn., and several other Washington officials of both parties a break on fees or interest. Such recipients were known within Countrywide as "Friends of Angelo" Mozilo, the company's founder and CEO.

"The most troublesome thing in this whole thing is how ready people are to think the worst," Conrad said, pointing a finger particularly at national news organizations whom he says have gotten the story wrong or criticized him using incorrect assumptions.

In the past several days, he's fired off stern letters to the Washington Post, the Wall Street Journal and the Bismarck Tribune, blasting them for "breathtaking ... disregard for the facts" and "serious inaccuracies" in their editorials criticizing him for something he never sought and never knew he had.

Conrad didn't know the loan officer who handled his 2004 refinance had been directed to deduct one discount point from the cost of the loan, which he now knows reduced his upfront closing costs by $10,700.

Many news organizations, including the Washington Post, reported that Conrad got the $10,700 break on the original loan in 2002, which isn't the case.

The instruction to the Countrywide loan officer was issued nearly two years after Conrad originally obtained a Countrywide mortgage on the beach house and also nearly two years after he said he had a "serendipitous" 30-second phone conversation with Mozilo, whom he never sought out and whom he has never talked to before or since, much less met.

Setting things right

The same day a reporter for Portfolio showed him the 2004 Countrywide e-mail naming him a recipient of a discount, he arranged to donate $10,700 to the Missouri Valley Chapter of Habitat for Humanity in Bismarck, a charity he has contributed to many times over the years. And he contacted the Senate Ethics Committee for guidance. If the Ethics Committee eventually decides that the $10,700 discount was an improper gift, he will refund the same amount to Countrywide, Conrad said.

Conrad talked to Mozilo when he began shopping for the original mortgage on the Bethany Beach property in 2002. He called his friend of 38 years, Minnesota native Jim Johnson, who had retired three years earlier as head of Fannie Mae, and asked for advice on shopping for a loan. Johnson said, "I happen to be with the man you need to talk to," and handed the phone to Mozilo. Mozilo told Conrad he'd be happy to put the senator in touch with a loan officer.

Angelo Mozilo could not be reached Friday for comment on what he remembers about the conversation with Conrad. A message left Friday morning with the media relations office for Countrywide Financial Corp. seeking an interview was not returned.

There is no allegation and no evidence that Conrad received any preferential treatment on the original mortgage, for $1.16 million, which he got at 6.125 percent at a time when the prevailing rate was 6.37 percent. He paid 20 percent down, or $290,000 on the property, the price of which was $1.45 million. The down payment came from cash Conrad and Calautti had from liquidating investment holdings when the stock market was down. By buying a beach house, they figured, "At least we'll have something to enjoy" from their financial investment.

He said he did not seek a loan for the beach house from a North Dakota lender because, at the time, he had only one mortgage with a North Dakota lender and that lender did not make loans in Delaware.

Conrad also argues against those who have that have termed a "loophole" the Senate disclosure regulations that do not require lawmakers to declare their residences on their disclosure forms.

"Unfortunately...most members of Congress don't have to tell the public anything about what may be their single largest asset or liability, the home they live in," wrote Capitol Eye, the newsletter of the Center for Responsive Politics, this week. The center points to an article by about "how this surprising loophole came to be."

Politico led its Wednesday report with a reference to Conrad's beach home and that fact that it is not declared.

The Center for Responsible Politics used the Conrad-Dodd flap to comb Federal Election Commission reports for all political donations to members of Congress since 1989 from Countrywide's PAC or employees. Rep. Ed Royce, R-Calif., Countrywide's home state, has received the most in the 19-year period, $37,500. Conrad has received $9,000.

Conrad said the critics are missing the point of the disclosure regulations.

"The concept is to disclose things that make money," he said. That is why he always lists his Washington, D.C., home, which has a rental unit in the basement, and the eight-unit apartment building in Bismarck in which he maintains his North Dakota residence.

Beach house was Calautti's dream

The beach house is not income property, despite the senator's personal inclinations, he said.

"I would like to rent it (out) but my wife has a different idea," he said.

He spends several weekends a year at the house, plus usually two weeks in the summer. Calautti visits it much more often, he said, because his weekends are often spent in North Dakota.

Conrad's family began vacationing in Bethany Beach in the 1960s. One summer when his older brother, Roen, was working in Washington, D.C., for the late Sen. Quentin Burdick, they held a family reunion there and fell in love with the place. He recalls driving out to the East Coast with his uncle John.

Bethany Beach is about a two-and-a-half hour drive from Washington D.C.

"People in Washington, D.C., go to that area like people in Fargo go to the lake (in Minnesota)," he said.

The town is a quiet, "low-key little town," he said, unlike other heavily developed towns nearby, like Ocean City and Dewey Beach, which he said are commercialized with high-rise condos and attract more of a party crowd.

According to the town's official Web site, Bethany Beach was founded in 1901 by members of the Disciples of Christ from the Washington, D.C., area and Pennsylvania who sought "a haven of rest for quiet people." Their original idea was not for a town but for a permanent yearly seaside assembly for its church members around the country, according to the town Web site. The first building was a 100-foot-diameter tabernacle. For many decades, Conrad said, Bethany Beach did not allow alcohol inside its boundaries.

North Dakotans are likely to be astonished at the property taxes Conrad and Calautti pay on the house. His 2007 total tax bill from Sussex County: $1,689.14.

Yes, Delaware is a low property tax state, he said. It makes up for it by charging property transfer taxes. When he bought the house, he was hit with a $21,000 transfer tax ("I was shocked.") and the seller paid a similar fee.

Conrad knows a lot of people are asking, "How can he afford a million-dollar beach house on a senator's salary?"

He didn't buy it with a senator's salary, he said. It was possible because his wife, a major lobbyist for Major League Baseball, "makes considerably more money than I do," though he won't disclose the amount.

And it was Calautti who wanted it. "This was her dream, to have a house in a beach town," he said.

Not all is criticism

While Conrad decries the criticism he's taken since the story broke--one writer to Washington Post columnist Dana Milbank's blog asked if Milbank was going to do something about "the mortgage bribes accepted by Conrad and Dodd"--he has received encouraging words from near and far, his staff said.

One was a hand-written note from a Washington, D.C., window salesman, Shawn Grossman, who had sold Conrad a replacement window for the senator's Washington, D.C., home after a break-in involving the house's basement apartment.

Grossman didn't like the treatment Conrad was getting this week in the press.

Grossman teases Conrad because when he was shopping for windows, "I (realize) that you not only neglected to ask for special treatment, but avoided revealing that you were a senator!"

Grossman wrote that he found Conrad to be "an exceptionally humble person for someone of your prominence" and "It angers me to think that anyone would view you as unethical,"

Grossman said many people he deals with who are far less influential "routinely seek special concessions."

Janell Cole works for Forum Communications Co., which owns The Dickinson Press.