McCain and Obama linked to Freddie, Fannie cash

It appears as though both campaigns have muddied the waters when it comes to discussing the whole mortgage meltdown with regard to Fannie Mae and Freddie Mac. The truth in all this is that indeed both campaigns have associates and aides tied to Freddie Mac and/or have received large chunks of cash from the government-backed organizations.

First, this story from the IHT, originally printed in the New York Times, on the McCain campaign:

WASHINGTON: One of the giant mortgage companies at the heart of the credit crisis paid $15,000 a month to a firm owned by Senator John McCain’s campaign manager from the end of 2005 through last month, according to two people with direct knowledge of the arrangement.

The disclosure contradicts a statement Sunday night by McCain that the campaign manager, Rick Davis, had no involvement with the company for the last several years.

Davis’s firm received the payments from the company, Freddie Mac, until it was taken over by the government this month along with Fannie Mae, the other big mortgage lender whose deteriorating finances helped precipitate the cascading problems on Wall Street, the people said.

They said they did not recall Davis doing much substantive work for the company in return for the money, other than speak to a political action committee composed of high-ranking employees in October 2006 on the coming midterm congressional elections. They said Davis’s his firm, Davis & Manafort, was kept on the payroll because of Davis’s close ties to McCain, the Republican presidential nominee, who was widely expected by 2006 to run again for the White House.

Davis took a leave from Davis & Manafort for the duration of the campaign, but as a partner and equity-holder continues to share in its profits.

For his part, McCain’s campaign has released a statement blasting this report:

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.

Again, let us be clear: The New York Times — in the absence of any supporting evidence — has insinuated some kind of impropriety on the part of Senator McCain and Rick Davis. But entirely missing from the story is any significant mention of Senator McCain’s long advocacy for, and co-sponsorship of legislation to enact, stricter oversight and regulation of both Fannie Mae and Freddie Mac — dating back to 2006. Please see the attached floor statement on this issue by Senator McCain from 2006.

It’s a situation of who you want to believe, which seems to be the nature of this campaign season.

Now onto Obama. The website OpenSecrets, an institute dedicated to publicizing and categorizing all cash political donations both corporate and private, reported on the top recipients from Freddie Mac and Fannie Mae donations from 1989 to 2008. The report shows Obama getting a decent chunk:

Name Office Party/State Total
1. Dodd, Christopher J S D-CT

$133,900

2. Kerry, John S D-MA

$111,000

3. Obama, Barack

S D-IL

$105,849

4. Clinton, Hillary

S

D-NY

$75,550

5. Kanjorski, Paul E H

D-PA

$65,500

6. Bennett, Robert F

S

R-UT

$61,499

Notably the table continues and there is a mixture of mostly Democrats, and some Republicans.

So the bottom line on this for me is that neither candidate is probably free and clear of connections with these failing institutions and neither candidate is free from lobbyist associations.

Therefore, does it matter?

  • It matters because the McCain campaign has repeatedly stated so stridently that they have no connections to the Freds. It’s just another example of their embarrassing string of lies.

  • Babs

    Well, I think that it doesn’t matter much – unless there are some charges forthcoming against people like Jim Johnson, the former CEO of Fannie. This is the man who Obama judged to be just fine and dandy in the credibility arena – so much so he headed up the committee that handed Obama Joe Biden for Vice President. That’s a lot of confidence to place in someone. If the FBI investigation into these CEOs and managers bring back concrete evidence against Johnson, THEN Obama’s association with him comes into play for me, and it won’t matter at that point when Obama says AGAIN “Well, I wasn’t there when that happened”, or “he was just a guy in my neighborhood”.

    I do believe McCain’s statement on Rick Davis though. If there were anything there, the press would have had a field day with it the FIRST time the subject came up in the press. McCain has been having an ongoing battle with the New York Times for a while now. Every time he calls them on something, they do something else just that much more bizarre.

  • JD

    Babs,

    It does sound like it matters to you and it sounds like you have already picked a side. I guess that is what these replys are for, to state where people are and who they believe on these topics.

    I have to agree with “Nate”… and I’ll quote in his own words.

    Nate – “It’s a situation of who you want to believe, which seems to be the nature of this campaign season.”

    I couldn’t agree with that statement more. People are seeing what they want to see in this particular case. I would say both Barack and John are both tainted with a touch of the Fred.

    Still, I feel comfortable in saying that both candidates are not and were not influenced by them and I don’t see any of Freddie\Fannie in either of their platforms.

    No answers are going to come before the election date.

  • IndiMinded

    They were paying out $15,000 a month, that amounts to roughly $180,000 a year in return for… no work? In return for nothing? Man, I gotta find me a deal like that. This work thing seems to be for suckers.

  • I think the term “lobbyist” has become tainted by politicians using it to their political advantage. As such, when someone mentions “lobbyist,” people recoil in horror. Lobbyists, as with anything, are always good and bad.

    Lobbyists tied to a campaign don’t bother me in the least, unless of course there is criminal or moral wrongdoing in accepting tainted donations.

    hmm.. gotta go, breaking news on McCain suspending his campaign and such.. look for a feature coming soon!

  • JD

    IndiMinded – “Man, I gotta find me a deal like that. This work thing seems to be for suckers.”

    Indeed it is for suckers.

  • Dreadsen

    The media has jumped on it a little bit. McCain claimed that his guy was not on payroll since 2005 and it has come out that he was getting paid up until maybe a month ago.

    Just admit that both of these guys connection to them is either both bad or nothing for both sides.

  • Lee

    The problem with the comparison here is that it is weak and irrelevant. On one hand, you have $15,000/month representing approx. $480,000 since the end of 2005.

    By comparison a broad set of contributions which include Senator Obama totalling $105,849 over the 19 year period of 1989 to 2008.

    This type of comparison doesn’t make a good argument and doesn’t help my own true conservative perspective on the candidates.

    I really hate that the problems with the McCain campaign are so transparently obvious and bad that every tactic and approach has to be misleading and innacurately weak.

  • The oneupmanship both sides are doing is f’kin ridiculous. You add up all the donations and it’s peanuts compared to the pay packet of the executives.

    Here in New Zealand the Labour Party are trying to pin the collapse of Lehman Brothers to the opposition leader just because he worked for them years ago. It’s the type of gutter politics no one really wants to see, especially the voters.

  • CCR

    Those donations to Obama are from FredMac/FranMae individual EMPLOYEES. With the huge size of these two companies, there’s got to be a few Democratic workers who donate to Obama and other Democrats. OTOH, the payments to Davis’ firm totalling approximately $300K in less than 3 years were signed by high level EXECUTIVES, ie. the guys with influence! Sure, Davis probably hasn’t “lobbied” for them in years, however, they were paying HIS company for access to the possible future POTUS.

  • SwingVote2008

    So bottom line if the workers want to support obama good for them if the executives drop cash then i would understand why the workers were most likely passed on raises. You get what u pay for. the company wanted to buy influence it cost you about 500,000 dollars. It is the peoples will to donate.. Management decided no Holiday Party because money is not in the budget.