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


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].

Here's video of McCain from 60 Minutes on Sunday denying Davis had anything to do Freddie Mac:

In a sharply-worded statement released to the Huffington Post, David Donnelly, director of the watchdog group Campaign Money Watch, said: "John McCain's campaign manager and Freddie Mac essentially had a secret half a million dollar lay-a-way plan. For almost three years, they made secret, monthly payments of $15,000 to Rick Davis for apparently no other work than for him to provide special access to a future McCain White House in exchange. If McCain knew about this, his presidential campaign should be over. If he didn't know about it, he ought to fire Rick Davis immediately."

McCain's campaign has been attacking Obama over his own (rather tenuous) ties to the two former lending giants. GOP officials argued that despite whatever connections Davis or others had to the mortgage giants, McCain was a leading advocate for reforming them. However, the Times' reporting punches some holes in that 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.

Seems all the big boys had there hands in the cookie jar

I am so sick of the lies. Why is it that the Republican are and have beeen able to get away with some much by simply lying and repeating the lies until somehow we empathetic citizens go along with it?

Bill Clinton's Role In the Sub-Prime Bankruptcies

Senator Obama was quick to blame President Bush and through him John McCain for causing the credit crunch that caused the banking meltdown which brought us the bankruptcy of Lehman Brothers today. This claim totally ignores his own running mates role in the crisis. Obama also ignores the fact that Bill Clinton and his social engineers helped caused the crisis. They were the political catalyst behind this slow-motion financial train wreck.
it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions.
In the article below the IBD examines the role of the Clinton administration in the Sub-Prime crisis:
The Real Culprits In This Meltdown By INVESTOR'S BUSINESS DAILY
Obama in a statement yesterday blamed the shocking new round of subprime-related bankruptcies on the free-market system, and specifically the "trickle-down" economics of the Bush administration, which he tried to gig opponent John McCain for wanting to extend.

But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions.

Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.

The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory."

Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.

And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.

As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.

Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.

Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.

In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes in its accounting procedures and ways of managing risk.

But it was too little, too late. Raines had reportedly steered Fannie Mae business to subprime giant Countrywide Financial, which was saved from bankruptcy by Bank of America.

At the same time, the Clinton administration was pushing Fannie and her brother Freddie Mac to buy more mortgages from low-income households.

The Clinton-era corruption, combined with unprecedented catering to affordable-housing lobbyists, resulted in today's nationalization of both Fannie and Freddie, a move that is expected to cost taxpayers tens of billions of dollars.

And the worst is far from over. By the time it is, we'll all be paying for Clinton's social experiment, one that Obama hopes to trump with a whole new round of meddling in the housing and jobs markets. In fact, the social experiment Obama has planned could dwarf both the Great Society and New Deal in size and scope.

There's a political root cause to this mess that we ignore at our peril. If we blame the wrong culprits, we'll learn the wrong lessons. And taxpayers will be on the hook for even larger bailouts down the road.

But the government-can-do-no-wrong crowd just doesn't get it. They won't acknowledge the law of unintended consequences from well-meaning, if misguided, acts.

Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions.

While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge.

Market failure? Hardly. Once again, this crisis has government's fingerprints all over it.

Im always looking to expand my knowledge..Who had control of congress in the Clinton years?

the social engineering was implemented through HUD...

You didnt answer my question...How am I ever gonna learn...