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?