I somehow missed this last week, an op-ed written by John McCain and Sarah Palin in the Wall Street Journal about the government takeover of Fannie Mae and Freddie Mac. Wait till you see the chutzpah here:
Enduring reform of Fannie and Freddie is a key first step. We will make sure that they are permanently restructured and downsized, and no longer use taxpayer backing to serve lobbyists, management, boards and shareholders.
Treasury has broadly followed the McCain plan, outlined months ago, and gets at the short-term heart of the problem. That plan reinforces the federal commitment to meet our obligations and get this mess behind us. It replaces management and board members. It requires that shareholders take losses first. It puts taxpayers first in line for any repayments. And it terminates future lobbying, which was one of the primary contributors to this great debacle.
But wait, there’s more. Here’s McCain on Friday:
“The financial crisis we’re living through today started with the corruption and manipulation of our home mortgage system. At the center of the problem were the lobbyists, politicians, and bureaucrats who succeeded in persuading Congress and the administration to ignore the festering problems at Fannie Mae and Freddie Mac.”
Yes! Lobbying was one of the main causes of the Fannie Mae and Freddie Mac crisis, for which taxpayers are now assuming trillions of dollars of risky loans. Those infernal lobbyists actually lobbied against government oversight of the two companies and that, according to McCain, is what caused this whole problem.
And now we turn to Jonathan Stein’s post at the Mother Jones blog, which documents all the folks working for the McCain campaign who worked as lobbyists for those two companies:
Aquiles Suarez, listed as an economic adviser to the McCain campaign in a July 2007 McCain press release, was formerly the director of government and industry relations for Fannie Mae. The Senate Lobbying Database says Suarez oversaw the lending giant’s $47,510,000 lobbying campaign from 2003 to 2006.
And other current McCain campaign staffers were the lobbyists receiving shares of that money. According to the Senate Lobbying Database, the lobbying firm of Charlie Black, one of McCain’s top aides, made at least $820,000 working for Freddie Mac from 1999 to 2004. The McCain campaign’s vice-chair Wayne Berman and its congressional liaison John Green made $1.14 million working on behalf of Fannie Mae for lobbying firm Ogilvy Government Relations. Green made an additional $180,000 from Freddie Mac. Arther B. Culvahouse Jr., the VP vetter who helped John McCain select Sarah Palin, earned $80,000 from Fannie Mae in 2003 and 2004, while working for lobbying and law firm O’Melveny & Myers LLP. In addition, Politico reports that at least 20 McCain fundraisers have lobbied for Fannie Mae and Freddie Mac, pocketing at least $12.3 million over the last nine years.
For years McCain campaign manager Rick Davis was head of the Homeownership Alliance, a lobbying association that included Fannie Mae, Freddie Mac, real estate agents, homebuilders, and non-profits. According to Politico, the organization opposed congressional attempts at regulation of Fannie and Freddie, along the lines of what John McCain is currently proposing. In his capacity of president of the group, Davis went on record in 2003 and insisted that no further reform of the lenders was necessary, in contradiction to his current boss’s sentiments. “[Fannie and Freddie] are subject to an innovative and stringent risk-based capital stress test,” Davis wrote. “The toughest in the financial services industry.”
Yes, his own campaign manager not only lobbied for Fannie Mae and Freddie Mac, he lobbied against government regulation of those two companies. His own campaign manager is one of the very people McCain says are responsible for the crisis. Faced with this reality, McCain has tried to go on the offensive first by trying to blame it on Obama and point to ties between him and the two failed companies.
First he put out a commercial claiming that Franklin Raines, former CEO of Fannie Mae, is an Obama adviser, but their sole source for this was a remark in a Washington Post article that said that Obama advisers had called him for advice on the mortgage market. Both Raines and the Obama campaign flatly deny that he has ever been an adviser to them, nor has he ever been mentioned anywhere by the campaign as meeting with Obama or speaking to him. But even if the Post story is true and an Obama adviser had called him up to ask him some questions about the housing and mortgage situations, this is nowhere near the same thing as having nearly two dozen people involved in one’s campaign that actually did the exact thing that McCain blames for the crisis – lobbied for Fannie and Freddie.
He also tried to make the connection to Jim Johnson, the man that Obama originally had leading his VP search committee. Johnson left the Obama campaign in June after a great deal of criticism. But his position there had nothing to do with mortgage issues, he was chosen to lead the VP not because of his past position with Fannie Mae but because he was Walter Mondale’s chief of staff, had run the Kennedy Center and was a major Washington insider who knew everyone in town. Now it’s certainly true that naming Johnson to that position was a mistake given his past scandals involving Countrywide, but he wasn’t in a position that had anything to do with policy or with that issue. Again, hardly the same thing has having a campaign manager, vice-chair and many others involved who did the very thing the candidate is blaming for the crisis.
Lastly they point to Jamie Gorelick as an Obama adviser. Gorelick is a favorite punching bag on the right. They particularly like to blame her — falsely — for preventing the FBI and CIA from sharing information in terrorism investigations. And here again, given Gorelick’s involvement in a Fannie Mae scandal a few years ago she should not be anywhere near the Obama campaign. But here again, she advises the campaign on legal and constitutional matters, not housing and mortgages (she is, after all, a former deputy attorney general).
Companies as huge as Fannie and Freddie are inevitably going to have former employees involved in both parties and inevitably going to give money to both parties. No one in politics is ever going to be entirely unconnected to them. But for McCain to point to these few superficial ties to the mortgage crisis in the Obama campaign in light of his own campaign’s far deeper connections to the very people McCain now blames for the crisis is staggering chutzpah. As the former head of Fannie Mae’s lobbying division told the New York Times:
I worked in government relations for Fannie Mae for more than 20 years, leading the group for most of those years. When I see photographs of Sen. McCain’s staff, it looks to me like the team of lobbyists who used to report to me. Senator McCain’s attack on Senator Obama is a cheap shot, and hypocritical.
I’m not sure Jonathan Rauch’s satire of the McCain campaign was really a satire. They really do seem to believe that the law of the excluded middle doesn’t exist.