The Senate Ethics Committee intends to open an investigation into the relationship of several Democrat Senators, senior executives, and lobbyists for Fannie Mae, and Countrywide Financial, the home mortgage company, which was purchased at bail-out price by Bank of America.

Already caught in the web are Sens. Kent Conrad and Chris Dodd, both of whom have denied any wrongdoing in their attempts to refinance or obtain mortgages from Countrywide at favorable terms. Senate Ethics Committee staffers believe that there may be at least two other Senators — both Democrats — who had contacts with senior executives at Fannie Mae and Countrywide.

“It apparently was well known that Countrywide had a ‘VIP service’ through the senior management offices, and current and former senior executives at Fannie Mae were a conduit for those contacts,” says a House Ethics aide. “There is a Clinton/Democratic connection here that can’t be ignored.”

That reference is to attempts by the then-outgoing Clinton White House to place a number of loyalists in senior positions at potentially lucrative businesses, trade associations, law firms and lobbying shops around town. Fannie Mae was one where a number of former Clinton advisers ended up with jobs, whether it be as executives or consultants.

Press reports indicated that not only did Dodd and Conrad get special treatment, but former Clinton Cabinet members Donna E. Shalala and Richard C. Holbrooke received special treatment, as did several prominent Republicans.

Of the group, perhaps the most damaged is Holbrooke who, according to friends in New York, has been expending a great deal of energy positioning himself for a senior post in either an Obama or Clinton Administration. Holbrooke was said by friends to be hoping for a Secretary of State post should Clinton have emerged victorious. He has been attempting to ingratiate himself into the Obama camp for several months now. The running joke in New York circles was that through his contacts at the Council on Foreign Relations, he was building a shadow State Department for an incoming Democratic administration.

“You have to keep in mind that for folks like Shalala and Holbrooke there is nothing wrong with what they did. They just got a sweet deal that the great unwashed probably couldn’t get,” says the ethics aide. “It’s just interesting to see all these people who financially are well off by any standard getting caught up in something that was totally unnecessary. It’s nickel and dime stuff, but that’s usually what gets people into embarrassing situations.”