Yesterday, I wrote about the need for a Congressional inquiry into the pay package given to Countrywide Financial (NYSE: CFC) CEO Angelo Mozilo:

The people getting royally screwed over by Mozilo's pay package are the company's shareholders. Compensation committee members Harley Snyder, Robert Donato, and Oscar Robertson should be hauled before Congressional hearings to explain this abject failure of corporate governance. It would be a much better use of taxpayer resources than holding hearings on what Roger Clemens did or didn't inject into his buttocks.

Well, now it looks like we're going to get those congressional hearings. A Congressional panel invited Angelo Mozilo, Charles Prince and Stan O'Neal in to answer question on February 7th. Congressman Henry Waxman said the inquiry was part of an "ongoing investigation into executive pay."

Unfortunately, these hearings don't go far enough. The people that need to be called in are the dormant compensation committee members who signed off on this garbage, and the institutional (especially pension fund) money managers who have allowed these clowns to remain on the company's board.

All Mozilo et al. need to say is "We were given these packages by our board" and that'll be that. This is a corporate governance, and the people responsible for the systematic breakdown of corporate governance in America need to be called to answer for this failures.

While the spotlight may be on Countrywide Financial Corp. (NYSE: CFC) CEO Angelo Mozilo for selling a large number of his shares over the past year, some of his directors did the same. The SEC has started an informal review of whether Mozilo's sales were proper. The stock traded above $45 last last year and now sit below $15.

According to data collected by The Wall Street Journal, several directors made big sales. Jeffrey Cummingham, head of Directorship Magazine, has sold $2.4 million worth of shares. Robert Donato, who used to be with Paine Webber, has unloaded stock worth $2.1 million. Two other directors also made sales.

Countrywide directors are also better paid than those on most public company boards. The Journal reports that (subscription required) in 2006 "their total compensation ranged from $344,988 to $477,824 in 2006."

All of this raises the question of how fair the Countrywide board can be in evaluating Mozilo's actions as the head of the company, especially his contribution to the firm's fast-falling share price. If the investigation into Mozilo's own share sales turns nasty, he faces a board that has also made a great deal on the stock.

Like the rest of Countrywide, the board is a mess. With shareholders suits already beginning, Mozilo may not be the only person in trouble at the big mortgage lender.

Douglas A. McIntyre is an editor at 247wallst.com.