Annals of McCain - Palin, XIII: Fannie Mae, Freddie Mac

A lot of people, especially in the media, have had a hard time reconciling John McCain's past reputation as an honest reformer with his current dishonest and dishonorable campaign behavior. Now that he is in the harsh spotlight of a national campaign, dogged investigators are beginning to lift the rock and what's come crawling out isn't very attractive. Two of the most recent creature sightings involve McCain's campaign director, Rick Davis, and McCain's assurances that Davis had long ago severed ties with his old lobbying firm that was intimately tied to the failed mortgage enterprises, Fannie Mae and Freddie Mac. The other is a detailed and somewhat sordid tale of a gambling addiction and simultaneous longterm involvement with gambling interests and lobbyists at the same time McCain's subcommittee was involved in oversight and regulation of the gaming industry.

Today, Fannie Mae and Freddie Mac. With the catastrophic failures on Wall Street throwing blind-eye regulation into sharp relief, any association with lobbyists for the failed mortgage backers is toxic. The public doesn't like what it sees. McCain tried to tar Obama with that brush, but picked someone who was only casually associated with Obama and not part of his campaign. It didn't stick and was widely criticized as misleading and dishonest. All the while McCain's own campaign director's firm had been $15,000 a month to lobby for the two corporations between 2006 and August 2008 (last month). Its chief lobbying product as access to McCain. McCains' response was to deny there was any connection. Newsweek's Michael Issikoff picks up the trail:

The McCain campaign told reporters the fees were irrelevant because Davis "separated from his consulting firm ... in 2006," according to the campaign's Web site, and he stopped drawing a salary from it. In fact, however, when Davis joined the campaign in January 2007, he asked that his $20,000-a-month salary be paid directly to Davis Manafort [Davis's company], two sources who asked not to be identified discussing internal campaign business told NEWSWEEK. Federal campaign records show the McCain campaign paid Davis Manafort $90,000 through July 2007, when a cash crunch prompted Davis and other top campaign officials to forgo their salaries and work as volunteers. Separately, another entity created and partly owned by Davis--an Internet firm called 3eDC, whose address was the same office building as Davis Manafort's--received payments from the McCain campaign for Web services, collecting $971,860 through March 2008.

In an e-mail to NEWSWEEK, a senior McCain official said that when the campaign began last year, it signed a contract with Davis Manafort "in which we purchased all of [Davis's] time, and he agreed not to work for any other clients." The official also said that though Davis was an "investor" in 3eDC, Davis has received no salary from it. As to why Davis permitted the Freddie Mac payments to continue, the official referred NEWSWEEK to Davis Manafort, which did not respond to repeated phone calls. One senior McCain adviser said the entire flap could have been avoided if the campaign had resisted attacking Barack Obama for his ties to two former Fannie Mae executives, which prompted the media to take a second look at Davis. "It was stupid," the adviser said. "A serious miscalculation and an amateurish move." Still, this adviser said, McCain's faith in his campaign manager remains unswerving. (Michael Issikoff, Newsweek)

Miscalculation or poetic justice? You decide.

We'll do gambling tomorrow. It is a much more serious challenge to McCain's image as a (formerly) honest crusader who has only recently gone wrong.