Hypocrisy on Obama’s stance on subprime connections

posted at 2:00 pm on June 9, 2008 by Ed Morrissey
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Back when Barack Obama wanted hope and change for the Democrats, his chief strategist David Axelrod tried to tie Hillary Clinton to the subprime mortgage collapse. Axelrod ripped Mark Penn for his ties to Countrywide, one of the subprime lenders at the center of the collapse. Keith Olbermann highlighted Axelrod’s attack on Hillary and Penn on his nightly newscast on April 7th:

She’s stuck him with him through the revelation that his firm was working for Blackwater and working for Countrywide, and, you know, so, it’s kind of stunning. Remember that the embassy said they weren’t sure whether he was there as a representative of his firm or a representative of Senator Clinton. I mean, I think there are issues associated with this. I’m not – you can use the word hypocrisy, but there are certainly questions that arise from this.

According to some news sources, however, Obama has little problem working with people connected to Countrywide, either. Jim Johnson, who also has connections to the Fannie Mae scandal, accepted over $2 million in real-estate loans from Countrywide.  The rates he received on those loans were significantly lower than market value at the time:

These borrowers, known internally as “friends of Angelo” or FoA, include two former CEOs of Fannie Mae, the biggest buyer of Countrywide’s mortgages, say people familiar with the matter.

One was James Johnson, a longtime Democratic Party power and an adviser to Sen. Barack Obama’s campaign, who this past week was named to a panel that is vetting running-mate possibilities for the presumed nominee. …

There is nothing illegal about a mortgage firm treating some borrowers better than others. But if Fannie Mae officials received special treatment, that could cause a political problem for the government-sponsored, shareholder-owned company.

Its code of conduct, a spokesman said, “requires the disclosure of potential conflicts of interest and prohibits acceptance of substantial gifts, including loans with preferential terms, from an organization seeking to do business with the company without prior review and approval by the company.” The spokesman said the code has been in effect since the early 1990s.

This gives us hypocrisy on two levels.  First, the Obama campaign made a specific point of scolding Hillary Clinton for hiring Mark Penn as her strategist after he represented Countrywide.  Now they’ve put the selection of his running mate in the hands of someone who got sweetheart deals from Countrywide while running Fannie Mae, which seems a lot more problematic than being a paid flack for the lender.  When will Axelrod call for Johnson’s expulsion from the Obama campaign?

Secondly, Obama has run on a promise to change politics in Washington.  Given that he has no executive experience, no foreign policy experience, no military experience, and no legislative track record, it’s about the only platform he has left. Does appointing an ethically-challenged, long-time party fixer to a VP search committee look like New Politics or the same old garbage?

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