Freddie Mac Paid McCain Campaign Manager's Firm Through last Month

Two reports tonight, one from the New York Times, and the other from
Newsweek, contradict John McCain's earlier statement that his campaign
manager Rick Davis had no involvement with mortgage giant Freddie Mac,
one of the companies at the heart of the current financial crisis, for
the last several years. The Times reports:

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 Mr. McCain that the campaign
manager, Rick Davis, had no involvement with the company for the last
several years. Mr. 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...


...On Sunday, in an interview with CNBC and The New York Times, Mr.
McCain responded to a question about Mr. Davis's role in the advocacy
group through 2005 by saying that his campaign manager "has had nothing
to do with it since, and I'll be glad to have his record examined by
anybody who wants to look at it."

Newsweek confirms the story:

Freddie Mac had previously paid an advocacy group run by Davis,
called the Homeownership Alliance, $30,000 a month until the end 2005,
when that group was dissolved. That relationship was the subject of a
New York Times story Monday, which drew angry denunciations from the
McCain campaign. McCain and his aides have vehemently objected to
suggestions that Davis has ties to Freddie Mac-an especially sensitive
issue given that the Republican presidential candidate has blamed "the
lobbyists, politicians and bureaucrats" for the mortgage crisis that
recently prompted the Bush administration to take over both Freddie Mac
and its companion, Fannie Mae, and put it under federal conservatorship.


But neither the Times story -- nor the McCain campaign -- revealed
that Davis's firm, the Washington, D.C. based lobbying firm Davis
Manafort, continued to receive $15,000 a month from Freddie Mac until
last month-long after the Homeownership Alliance had been terminated.
The two sources, who requested anonymity discussing sensitive
information, told Newsweek that Davis himself approached Freddie Mac in
2006 and asked for a new consulting arrangement that would allow his
firm to continue to be paid. The arrangement was approved by Hollis
McLoughlin, Freddie Mac's vice president for external relations, because
"he [Davis] was John McCain's campaign manager and it was felt you
couldn't say no," said one of the sources. [McLoughlin did not return
phone calls].

Both articles note that McCain has been attacking Obama over his own
ties to the two former lending giants. The McCain campaign has argued
that despite whatever connections Davis or other McCain campaign
officials had to the mortgage giants, McCain was a leading advocate for
reforming them. However, the Times' reporting punches some holes in
McCain's claim:

In an interview Tuesday with conservative talk-radio host Neal
Boortz, Mr. McCain said, "I remember warning at that time that Fannie
and Freddie were out of control and that they needed to be reined in.
And, frankly, I warned that this kind of thing could lead to serious
problems. Now, in full disclosure, I didn't foresee something this huge,
but certainly I saw the fundamentals there for serious problems when you
have a quasi government agency acting the way they did."


When Mr. Boortz noted approvingly that Mr. McCain had co-sponsored
a Senate bill to mandate new regulations, Mr. McCain said, "I remember
it very well."

But a Freddie Mac official said Mr. McCain "never took on the role
that some other Republicans did" to try to limit the companies. He named
instead Senators Chuck Hagel of Nebraska, John Sununu of New Hampshire
and Elizabeth Dole of North Carolina, all of whom were on the banking
committee during recent years. "I remember working against a number of
amendments and they were always introduced by Hagel and Sununu. John
McCain was never anywhere to be found."

A check of the records for the legislation that Mr. Boortz
mentioned shows that Senator Hagel was the original sponsor on Jan. 26,
2005, and Senators Sununu and Dole were co-sponsors then. Mr. McCain did
not sign on as a co-sponsor for more than a year, on May 25, 2006.


From The Huffington Post.

www.huffingtonpost.com

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