Who is the bigger issue, Rick Davis or Jim Johnson?
posted at 11:20 am on September 25, 2008 by Ed Morrissey
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I have to profess amusement at the media and the Barack Obama campaign in attempting to make an issue out of Rick Davis, one of John McCain’s advisers on the presidential campaign. Obama has been trying to cast McCain as a tool of lobbyists, and Davis has become Exhibit A over the last few days. At issue is whether Davis’ firm has taken lobbying money from Fannie Mae and Freddie Mac over the last two years while Davis works for McCain, and whether Davis profits from the business. This began with a New York Times report on Sunday:
Incensed by the advertisements, several current and former executives of the companies came forward to discuss the role that Rick Davis, Mr. McCain’s campaign manager and longtime adviser, played in helping Fannie Mae and Freddie Mac beat back regulatory challenges when he served as president of their advocacy group, the Homeownership Alliance, formed in the summer of 2000. Some who came forward were Democrats, but Republicans, speaking on the condition of anonymity, confirmed their descriptions.
“The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again,” said Robert McCarson, a former spokesman for Fannie Mae, who said that while he worked there from 2000 to 2002, Fannie Mae and Freddie Mac together paid Mr. Davis’s firm $35,000 a month. Mr. Davis “didn’t really do anything,” Mr. McCarson, a Democrat, said.
Shortly after that, allegations that Davis continued to profit from Fannie Mae connections into this year arose, prompting the McCain campaign to issue a sharp rejoinder:
Today the New York Times launched its latest attack on this campaign in its capacity as an Obama advocacy organization. Let us be clear about what this story alleges: The New York Times charges that McCain-Palin 2008 campaign manager Rick Davis was paid by Freddie Mac until last month, contrary to previous reporting, as well as statements by this campaign and by Mr. Davis himself.
In fact, the allegation is demonstrably false. As has been previously reported, Mr. Davis separated from his consulting firm, Davis Manafort, in 2006. As has been previously reported, Mr. Davis has seen no income from Davis Manafort since 2006. Zero. Mr. Davis has received no salary or compensation since 2006. Mr. Davis has received no profit or partner distributions from that firm on any basis — weekly, bi-weekly, monthly, bi-monthly, quarterly, semi-annual or annual — since 2006. Again, zero. Neither has Mr. Davis received any equity in the firm based on profits derived since his financial separation from Davis Manafort in 2006.
Further, and missing from the Times’ reporting, Mr. Davis has never — never — been a lobbyist for either Fannie Mae or Freddie Mac. Mr. Davis has not served as a registered lobbyist since 2005.
Though these facts are a matter of public record, the New York Times, in what can only be explained as a willful disregard of the truth, failed to research this story or present any semblance of a fairminded treatment of the facts closely at hand. The paper did manage to report one interesting but irrelevant fact: Mr. Davis did participate in a roundtable discussion on the political scene with…Paul Begala.
Well, let’s just say for the sake of argument that all of the allegations were true (they’re not), and that Davis continued to profit from his partners’ work with Fannie Mae and/or Freddie Mac. How exactly does this make Davis a villain? There is nothing illegal about lobbying, and Congress never bothered to block Fannie or Freddie from availing themselves of lobbyists. They had the authority to do so, as they demonstrated this summer after bailing both GSEs out.
And who got most of the attention from Fannie and Freddie? It wasn’t John McCain, who averaged $1,000 per year in contributions from Fannie/Freddie sources over the past two decades. Chris Dodd, the chair of the Banking Commitee, averaged $8,000 a year in contributions from those same sources. Barack Obama, though, set records. In less than four years in the Senate, he received more than $120,000 from Fannie/Freddie sources, at a rate of over $30,000 per year.
In 2006, McCain tried to move legislation with Chuck Hagel, John Sununu, and Elizabeth Dole — all Republicans — to bring tighter regulation and more oversight on Fannie and Freddie. Barack Obama and Chris Dodd took their money and did nothing to support that effort. Regardless of whether McCain relies on Rick Davis or not, Fannie and Freddie knew who their friends were, and made sure they invested in them.
Team Obama wants people to think Rick Davis is the villain of the Fannie/Freddie failure because he worked at a firm that did lobbying for them. Meanwhile, Jim Johnson busies himself working for Barack Obama and giving seminars on the lending industry:
Former Fannie Mae chairman Jim Johnson was dumped from Obama’s vice presidential search team, but he’s still playing a behind-the-scenes role on the campaign.
Former Senator Tom Daschle, a top Obama backer, emailed a select list this afternoon that he and Johnson would be leading a briefing intended largely for Clinton’s campaign brain trust next month.
“Jim Johnson and I have scheduled another informal breakfast discussion and update on the campaign early next month,” he wrote to a list including Senator John Kerry, James Carville, and Richard Holbrooke, as well as Clinton’s former top campaign aides, including Howard Wolfson, Geoff Garin, and Harold Ickes.
Who is Jim Johnson? He’s one of the people behind its fraudulent business practices, as auditors discovered:
[Fannie Mae] failed to disclose to OFHEO in a timely manner a post-employment agreement with former CEO James Johnson that provided him with substantial compensation in addition to that already provided upon his termination as a Fannie Mae employee….
Shortly after the release of the September 2004 OFHEO report, an article in the December 23, 2004, Washington Post entitled “High Pay at Fannie Mae for the Well-Connected,” suggested that 1998 compensation for former Fannie Mae CEO James Johnson “was [reported to be] $6 million to $7 million a year,” in 1998. The total compensation in 1998 for Mr. Johnson was, in fact, substantially more.
An initial review of the 1999 Fannie Mae Proxy Statement “Summary Compensation Table” suggests the source of the Washington Post figure on 1998 compensation for Mr. Johnson. A close read of that proxy, including footnotes, shows that the Table itself listed only a small portion of the actual 1998 long-term compensation of Mr. Johnson. Mr. Johnson used a program available to only very senior Fannie Mae executives (Executive Vice President and above) to defer a sizable amount of earned Performance Share Plan shares. Fannie Mae disclosed in a footnote to the Summary Compensation table that Mr. Johnson deferred 111,623 shares; the actual value of the shares did not show up in the Summary Compensation Table.
Fannie Mae disclosed his compensation at the time as $2 million. The actual value of his compensation? Twenty-one million dollars. Why did Johnson and Fannie Mae hide that cost from its shareholders and government auditors? Nor was this his only peccadillo. As it turns out, while CEO of Fannie Mae, he took sweetheart loans from Countrywide Mortgage under a “friends of Angelo” program initiated by Countrywide CEO Angelo Mozilo:
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.
In other words, Johnson hid his compensation and broke his own rules at Fannie to profit at the expense of oversight. Countrywide was one of the main failure points in the sub-prime market collapse, and Johnson and Fannie Mae should have been watching it closely. He apparently had two million reasons to look the other way.
Now let’s compare Rick Davis, as painted by the media and the Obama campaign, and Jim Johnson. At worst, Davis may have recently and indirectly profited by lobbying performed by partners at his firm that made its value increase — lobbying welcomed by Barack Obama in his short tenure in national office to the tune of $30,000 per year in contributions. On the other hand, we have one of the chief architects of the massive failure in the credit markets, one with a clear record of unethical behavior, still actively giving economic advice to Obama, apparently designed to get Obama through a crisis he never attempted to stop and for which Johnson bears significant responsibility.
Objectively speaking, which of these matters most?
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Excellent post Ed.
JeffreyLloyd on September 25, 2008 at 11:21 AM
ahhhh if we ONLY had a Mainstream Media….80-20 McCain
SDarchitect on September 25, 2008 at 11:23 AM
I hope that goofball poster from Canada reads what you wrote Ed…but then he will ignore the facts, it’s a liberal thang.
right2bright on September 25, 2008 at 11:26 AM
I am so sick and tired of the BS that the MSM is pulling in a wanton and flagrant attempt to obfuscate and hide the truths in this Presidential campaign. Ethically, obama’s campaign should list them as “in-kind” contributors. They don’t donate money they donate their services and writings to his campaign.
Wake up folks don’t let these folks tell you what to do.
skatz51 on September 25, 2008 at 11:26 AM
You mean John McCain? The reformer? The co-author and CFR champeen of McCain-Feingold? The driver and inspiration of his very own lobbyist rich Reform Institute that flows contributions to him? He’s pure as the driven snow? Don’t piss down my back and tell me it’s rainin’, Ed.
Either McCain is a blind fool or a liar. Which is it?
Fletch54 on September 25, 2008 at 11:26 AM
JJ is political DY-NO-MITE!
D0WNT0WN on September 25, 2008 at 11:26 AM
Good post. It’s sad that the average American is getting such a distorted picture of how this whole situation came about. I can sort of understand the media bias, in that they want Obama to win. But this is a pretty serious issue and the American people need to know the real situation. The media’s flat out lying is actually dangerous in its implications right now.
BadgerHawk on September 25, 2008 at 11:28 AM
Translation: I didn’t read the post.
Slublog on September 25, 2008 at 11:28 AM
Yeah, Ed. Fletch gets covered in enough urine at weekend parties, he doesn’t need it from you during the week.
BadgerHawk on September 25, 2008 at 11:28 AM
But Palin doesn’t know what the “Bush Doctrine” is!!!!1111eleventy
The Monster on September 25, 2008 at 11:29 AM
Great work, Ed.
If Jim Johnson, Raines, Gorelick, et al were Republicans, we would have had investigations going on for years. Since this is a Dem debacle all we have are a few flares being thrown at Republicans and the Dems generally running away from the problem they created.
“Culture of Corruption”? Look no further than the Dem leadership.
Cody1991 on September 25, 2008 at 11:30 AM
It’s a little green tufty thing.
RushBaby on September 25, 2008 at 11:32 AM
The MSM is so clueless that most of them would read Ed’s post and report the following:
Recently they did exactly this to Kathryn Jean Lopez at The Corner.
Terrie on September 25, 2008 at 11:33 AM
90% of the shit from this ought to stick to Obama, 10% to McCain. My guess is, the oh so important “undecideds” still don’t know what day it is.
JiangxiDad on September 25, 2008 at 11:34 AM
How does this affect Karen Tumulty’s mental state?
JammieWearingFool on September 25, 2008 at 11:36 AM
Finally, someone is investigating Obama. This looks like a bigger deal than the per diem thing that the Post slapped Palin for. Will they put this on their front page? We should complain to their ombudsman.
promachus on September 25, 2008 at 11:36 AM
Thanks for your hard work Ed.
Mcguyver on September 25, 2008 at 11:37 AM
Ah, the Plywood Gazeb-O story…
RushBaby on September 25, 2008 at 11:41 AM
Look, McCain and Obama can both vote for some bailout. It could then immediately fail and Obama could campaign on the statement that McCain voted for it. That is the way of the media and the Obama campaign knows they will give him cover.
I’m beginning to think the only proper way to deal with MSNBC, NBC, CBS, ABC, NYT, LAT, et al is to hire a team of lawyers and file suits insisting that they be classified as 527 organizations.
CC
CapedConservative on September 25, 2008 at 11:41 AM
a few of obamas
friends
Obama’s anti-semitic friends:
“Mentor” Frank Davis
“Reverend” Al Sharpton
“Reverend” James Meeks
“Reverend” Jeremiah Wright
“Reverend” Otis Moss III
“Minister” Louis Farrakhan
“Pastor” Michael Pfleger
“Reverend” James Bevel
“Reverend” Eric Lee
“Pastor” Mack King
George Soros
Syrian Tony Rezko
Saddam Hussein’s gun-running bagman Nadhmi Auchi
Samantha Power
Edward Said
Rashid Khalidi
Ali Abunimah
General Tony McPeak
Robert Malley
Susan Rice
Anthony Lake
William C. Ayers
Bernadine Dohrn
Raila Odinga
Zbigniew Brzezinski
Jodie Evans
The Black Panthers
Lawrence Lessig
Sam Graham-Felsen
Joseph Cirincione
Cornell West
…nope,…nothing to see here. Move along.
christene on September 25, 2008 at 11:42 AM
$30,000 out of $7,000,000? Obama was bought cheap.
Actually, 0% ought to stick to McCain. And to Bush. Both tried to rein in freddie and fannie, and the Democrats threw all the legislation under the train. Every legislator who took money from these institutions and then did not support their needed reform bears the stain of dishonor.
As for Obama, not 90%, because that vastly inflates his importance as a tool.
unclesmrgol on September 25, 2008 at 11:42 AM
Chuck Hagel is a Republican ??
ignatzk on September 25, 2008 at 11:42 AM
Ed, spot on - Rushbo went OFF on a caller yesterday rebutting those loons. It was a pleasure to listen to.
SkinnerVic on September 25, 2008 at 11:44 AM
This is all great but to what avail?
Johnson was also on the BOD’s of Goldman Sachs and Lehman Brothers. He’s been profiting hamdsomely on these colossal failures.
So who in the media is going to give a damn? Which Obama newspaper is going to run this with the same gusto it ran with the Davis misinformation?
Obama owns the Times and to a lesser extent, Wapo.
McCain owns none.
Uphill doesn’t begin to describe this. “Journalists” are pretty much derelict.
drjohn on September 25, 2008 at 11:45 AM
Nicely done, Ed. Let’s keep this our little secret. We wouldn’t want to shock the nation. Especially that insufferable,urine soaked, moronic sockpuppet of Obama’s that keeps reminding us that cousins shouldn’t marry.
pistolero on September 25, 2008 at 11:46 AM
Why should the MSM care? They are in the tank for Obama and will avoid anything that is negative towards, as Rush calls him, man-child.
I am hoping that McCain wins, because it will not only be the good for the country, but it will be an indictment on the MSM. But of course, the MSM will not change their ways.
jencab on September 25, 2008 at 11:46 AM
If Rick Davis received money from Fannie and Freddie, then it would be on his income tax returns last year.
If he did receive income and it is not on his tax filings then this whole thing is the LEAST of his problems.
Check his return filings. If no income reported, then case closed.
kurtzz3 on September 25, 2008 at 11:47 AM
The money that went into these financial failures lies the pockets of the Obama team and finds his campaign.
Johnson, Raines, Pritzker (the queen of the sub-prime mortgage) and Corzine.
Yet Obama supporters ask no questions- especially those in the media.
Willfully ignorant and colosally stupid. It is disgraceful.
drjohn on September 25, 2008 at 11:52 AM
…Pat Schroeder was a bit premature…Obama, should he be elected, would be the “teflon president”…as his career thus far has been coated to a non-stick sheen….
…and I’d better see you all voting for Obama…after all, not to do so for the first black candidate is a sure sign of…wait for it…RACISM…after all…isn’t this one more feeble attempt on to sponge away the white guilt so many have been raised with?
…being raised with “white privilege” myself — privileged to work for my supper with folks of all colors without a speck of sympathy, advocacy or respite — I feel free to vote my conscience….
…so, if the first black candidate, surrounded by the detritis of a failed socially suicidal ethic, fails to get elected to the office so many feel is his “due”, I’d simply have to say that it’s a sign that the system works…and move along….
Puritan1648 on September 25, 2008 at 11:54 AM
…I wonder…how does this blip in the market and tightening of liquidity effect the hedge fund game? How is George Soros faring these days?
I’m so worried about ol’ George, after all. The idea of arrogant multi-billionaire political dilettante wreckers reduced to selling pencils makes me tear up…a bit….
Puritan1648 on September 25, 2008 at 11:57 AM
The NYT used the pooper-scooper to gather Obama’s shit and then package it labeled “McCain’s” as though the public wants shit, anyway.
McCain blasted the lies with factual accounting on record.
Obama is still digging his own grave, unable and unwilling to accept any factual accounting on record.
Teflon Bill Clinton delivered Obama to the morgue where Barry can await his last breath while in isolation. All those willing to “clean” Obama’s image are the very ones made of the shit we hate to begin with. Elitists, check. Media, check. Socialists, check. Corrupt official authoritarians, check. Bloated Weezel CEOs, check. Greedy investors unwilling to suffer their OWN consequences, check.
Meanwhile, the odd couple Bill and Bush Sr. are tight. The Clintons will get a pass on Bill’s enabling of our crisis because Hillary will work with McCain.
Whatever GWBush, McCain and Hillary hammer out is what we’ll be stuck with. God help us, because those three share more in common than what differentiates them.
I hope that DeMint has his strong coalition happening! I hope that Newt’s proposals clear headway through this legislated economic fiasco.
SING A SONG OF SIX PENCE
maverick muse on September 25, 2008 at 11:59 AM
I get accused of reading only conservative blogs and listening to Brit on Fox News—not entirely true, but generally so. Why? Because of posts like this one from Ed.
The problem is, most of the voting public has no inkling of these controversies and issues. Tell them that it’s Obambi, not McCain, who is surrounded by corrupt advisors, and they’ll say, “Oh, that’s just right-wing propaganda.” The NBC Nightly News is not going to tell them about Jim Johnson. They’ll just show endless clips of Obambi decrying “Four more years of George Bush!” And unfortunately, that’s most of the people going to the polls on November 4th. They don’t read Ed Morrissey, or even watch Brit Hume.
“Four more years of Jimmy Carter” won’t work on them. They think he’s a nice man who builds houses for the poor and wins Nobel Prizes.
John McCain has just a few weeks to break through the media barrier. He needs a “There you go again!” moment in the debates. Keep your fingers crossed.
MrLynn on September 25, 2008 at 12:01 PM
Ed was breathing down McCain and Davis’ neck over unscrupulous lobbying practices back in the day.
Inside McCain’s Reform Institute
Now your just another McCain shill, Ed. Is Obama and Johnson guilty as hell? Absolutely. Should the Republican candidate, owner of CFR and “Country First” reform be above reproach? Absolutely. Unfortunately, he’s not, and coming to light at the worst possible moment for him. And this example is just the tip of the McCain/Davis iceberg.
Fletch54 on September 25, 2008 at 12:02 PM
Why indeed? Isn’t it a crime to make improper disclosures? And may I say that I want to throw a shoe at the television every time Obama demagogues about CEO pay, like when he says this:
“The American people should not be spending one dime to reward the same Wall Street CEOs whose greed and irresponsibility got us into this mess,” Obama said.
And later: “I will not allow this plan to become a welfare program for Wall Street executives. No way, no how.”
I guess Johnson, Raines, and Gorelick get a pass because their corporate headquarters were in DC, not Wall Street.
Rush had a very interesting caller the other day, who had worked for Countrywide. According to this caller, it was Fannie Mae who was pushing them to give people with bad credit A rated loans. He specifically cited Fannie Mae wanting to confer this status on people who had just emerged from bankruptcy.
Buy Danish on September 25, 2008 at 12:03 PM
Soros is opposed to the plan, which makes me a bit more inclined to support it. To Ed’s story, this needs to be shouted at every opportunity, (and don’t fail to mention Raines) until everyone hears it, despite the blackout from the MSM.
Vashta.Nerada on September 25, 2008 at 12:04 PM
You made a typo but I fixed it…I choose the second option…
right2bright on September 25, 2008 at 12:05 PM
Hopefully, when Johnson and Raines are under investigation from the FBI, we may break through the coverage blackout.
Vashta.Nerada on September 25, 2008 at 12:06 PM
This is my concern:
The ones that allowed us to get to this point, are the ones coming up with the solution.
If you gave an investor you life savings, and he blew it while paying himself a huge salary, but could not fully explain why he made the decisions on investing and why he didn’t keep you informed…he came back to you and said “give me more money, I have a solution that will help, but it is really complex, trust me”, would you give him the rest of your money?
right2bright on September 25, 2008 at 12:09 PM
http://farm4.static.flickr.com/3010/2885520247_b85b9fafeb_o.png
Dave Rywall on September 25, 2008 at 12:10 PM
Just ask yourself:
In what capacity will Jim Johnson serve under the Obama administration?
Pray it is only an ambassadorship in an obscure country.
Sir Napsalot on September 25, 2008 at 12:10 PM
Compare what Rick Davis’s firm got versus the take for Jamie Gorleick, Raines & Johnson. Thousands versus Millions based on fraudulent sales data. Nothing versus Something.
Max47 on September 25, 2008 at 12:16 PM
Translation: I didn’t read the post.
Slublog on September 25, 2008 at 11:28 AM
——————————————————-
give Fletch54 a break he probably saw some Big-Um words and became confused. I blame this lack of communication on Ed, I mean he has a lot of gall putting in big words like “profess amusement” in the first sentence of this article. How does he expect an Obama drone to get past that?
cmptrnerd on September 25, 2008 at 12:23 PM
Franks, Chairman of the House Financial Committee should resign in disgrace…
Dodd, Chairman of the Senate Banking Committee, should resign in disgrace…
Cox, Chairman of the SEC, should resign in disgrace…
right2bright on September 25, 2008 at 12:26 PM
In what capacity will Jim Johnson serve under the Obama administration?
Pray it is only an ambassadorship in an obscure country.
Sir Napsalot on September 25, 2008 at 12:10 PM
Well, apparently Caroline Kennedy will be amb. to the UK, so I think Zimbabwe would be the best place for J. Johnson. Perfect fit.
Cody1991 on September 25, 2008 at 12:30 PM
The problem I have with McCain’s response is that it is dishonest. Mr. Davis did continue to own equity in the consulting firm and would have profited to the extent the firm was successful in its operations. It doesn’t matter that he received no cash distributions from his equity. McCain is trying to play fast and loose IMHO and look how he’s trying to hide the salami:
As has been previously reported, Mr. Davis separated from his consulting firm, Davis Manafort, in 2006. As has been previously reported, Mr. Davis has seen no income from Davis Manafort since 2006. Zero. Mr. Davis has received no salary or compensation since 2006. Mr. Davis has received no profit or partner distributions from that firm on any basis — weekly, bi-weekly, monthly, bi-monthly, quarterly, semi-annual or annual — since 2006. Again, zero. Neither has Mr. Davis received any equity in the firm based on profits derived since his financial separation from Davis Manafort in 2006.
jim m on September 25, 2008 at 12:45 PM
Ed - I have a couple of things that I beg you to inlcude in this post.
1. Davis Manafort and Rick Davis have NEVER been registered lobbyists for Fannie Mae or Freddie Mac. The two employed a battalion of outside lobbyists, many of whom did no work at all. Freddie Mac had lobbyists who were very well connected to many key Republicans. Rick Davis wasn’t one of them. EVER. This can be looked up by anyone at the Clerk of the House website. The Times artfully worded its article to clearly imply that Davis had been lobbying and that McCain is a liar for saying that nobody on his campaign has been lobbying for anyone.
2. Here is an article on the Wall Street Journal’s Washington Wire blog today. Note especially the last paragraph. Ms. Canfield also made this comment in a Sept. 7 WSJ article that went into more detail about Fannie’s lobbying machine. I know Ms. Canfield very well and she has been lobbying for stronger regulation of the GSEs since 1996. She is a very credible witness on this.
Anyone Not Tied to Fannie or Freddie Please Stand UpNick Timiraos and Damian Paletta report on the presidential race.
The McCain campaign’s attempt to play the who-has-more-connections-to-Fannie Mae-and-Freddie Mac-executives-and-lobbyists game appears to have backfired, as campaign manager Rick Davis faces new questions over his lobbying firm’s ties to Freddie Mac.
But as Barack Obama hunkers down in Tampa, Fla., for debate prep this week, he is being coached by—wait for it—a Fannie Mae executive who headed the company’s legal shop and worked closely with its stable of lobbyists.
Tom Donilon, a Washington lawyer, held several senior positions in the Clinton State Department, and the Obama campaign points to that expertise in bringing him on board as an unpaid adviser to help prep Obama for Friday’s foreign policy debate with McCain.
Donilon, who contributed $4,600 to Hillary Clinton’s presidential campaign in March 2007 (and gave the maximum $2,300 to Obama for the general election in July), has a long resume in Democratic politics. He headed the Clinton-Gore transition effort and Clinton’s 1992 debate prep. He also served as an aide to Sen. Joe Biden in his failed 1988 presidential bid.
More recently, he served as Fannie Mae’s executive vice president for law and policy from 1999 until 2005, giving him control of Fannie Mae’s legal, regulatory and public policy activities and government and industry relations.
Donilon was one of several executives to leave at a time when the company faced pressure to improve its accounting practices, and he was mentioned numerous times in a scathing report two years ago on Fannie’s accounting misdeeds, when the Office of Federal Housing Enterprise Oversight accused the company of manipulating results to maximize bonuses. The report didn’t criticize Donilon but said that lobbyists under his direction had pushed for a government investigation of Ofheo in 2004 in order to undermine the regulator’s credibility in challenging Fannie’s accounting.
The bipartisan lobbying efforts by the housing giants isn’t a Washington secret, though both campaigns have tried to exploit the other’s connections in recent days.
The McCain camp first raised the issue with an ad spotlighting Obama’s more than $100,000 in campaign contributions from Fannie and Freddie employees for his 2004 Senate campaign, and his ties to figures including Jim Johnson, a former Fannie Mae chairman, who headed Obama’s vice presidential search earlier this year until questions emerged about favoritism he received in loans from Countrywide Financial Corp.
But the Obama campaign fired back on Tuesday, when news reports said that the lobbying firm founded by McCain campaign manager Rick Davis had until very recently been taking money from Freddie Mac. Davis took leave from the firm for the election.
“The question that now needs to be answered is this: did Freddie Mac or any other special interests buy access to John McCain by compensating top officials, including Rick Davis?” Obama spokesman Dan Pfeiffer said in a statement Tuesday.
McCain has long fought to shrink the size of Fannie Mae and Freddie Mac, and earlier this month, a longtime critic of Fannie and Freddie told the Wall Street Journal of the housing giants’ unsuccessful efforts to win McCain over.
“There were quite a few lobbyists retained by Fannie and Freddie who tried to influence Sen. McCain, but they never were able to get their ‘hooks’ into him,” said Anne Canfield, who heads a lending trade group, the Consumer Mortgage Coalition, that has called for greater regulation of the government-backed entities.
rockmom on September 25, 2008 at 12:45 PM
Cognitive disconnect, right? Take two aspirins and call back on November 5th.
Yoop on September 25, 2008 at 2:10 PM
Usually the term refers to pissin’ on a leg. Whatever position you prefer to assume is telling.
geckomon on September 25, 2008 at 2:42 PM