[Vision2020] McCain and the Bailout

[lfalen]

This article mentions Frank Raines but does not say anything about Jim Johnson who is still a major advisor to Obama.
Other than being slanted against McCain and letting Obama off the hook, the article probably has some truth.
Roger
-----Original message-----
From: Tom Hansen thansen at moscow.com
Date: Mon, 22 Sep 2008 12:50:28 -0700
To: lfalen lfalen at turbonet.com,  vision2020 at moscow.com
Subject: McCain and the Bailout

> From the International Herald Tribune (global edition of the New York 
> Times) at:
> 
> http://tinyurl.com/3vvew2
> 
> --------------------------------------------------------------------
> 
> Loan titans paid McCain adviser nearly $2 million 
> By David D. Kirkpatrick and Charles Duhigg
> 
> Senator John McCain's campaign manager was paid more than $30,000 a month 
> for five years as president of an advocacy group set up by the mortgage 
> giants Fannie Mae and Freddie Mac to defend them against stricter 
> regulations, current and former officials say.
> 
> McCain, the Republican candidate for president, has recently begun 
> campaigning as a critic of the two companies and the lobbying army that 
> helped them evade greater regulation as they began buying riskier 
> mortgages with implicit federal backing. He and his Democratic rival, 
> Senator Barack Obama, have donors and advisers who are tied to the 
> companies.
> 
> But last week the McCain campaign stepped up a running battle of guilt by 
> association when it began broadcasting commercials trying to link Obama 
> directly to the government bailout of the mortgage giants this month by 
> charging that he takes advice from Fannie Mae's former chief executive, 
> Franklin Raines, an assertion both Raines and the Obama campaign dispute.
> 
> Incensed by the advertisements, several current and former executives of 
> the companies came forward to discuss the role that Rick Davis, McCain's 
> campaign manager and longtime adviser, played in helping Fannie Mae and 
> Freddie Mac beat back regulatory challenges when he served as president of 
> their advocacy group, the Homeownership Alliance, formed in the summer of 
> 2000. Some who came forward were Democrats, but Republicans, speaking on 
> the condition of anonymity, confirmed their descriptions.
> 
> "The value that he brought to the relationship was the closeness to 
> Senator McCain and the possibility that Senator McCain was going to run 
> for president again," said Robert McCarson, a former spokesman for Fannie 
> Mae, who said that while he worked there from 2000 to 2002, Fannie Mae and 
> Freddie Mac together paid Davis's firm $35,000 a month. Davis "didn't 
> really do anything," McCarson, a Democrat, said.
> 
> Davis's role with the group has bubbled up as an issue in the campaign, 
> but the extent of his compensation and the details of his role have not 
> been reported previously.
> 
> McCain was never a leading critic or defender of the mortgage giants, 
> although several former executives of the companies said Davis did draw 
> McCain to a 2004 awards banquet that the companies' Homeownership Alliance 
> held in a Senate office building. The organization printed a photograph of 
> McCain at the event in its 2004 annual report, bolstering its clout and 
> credibility. The event honored several other elected officials, including 
> at least two Democrats, Governor Edward Rendell of Pennsylvania and 
> Representative Artur Davis of Alabama.
> 
> In an interview Sunday night with CNBC and The New York Times, McCain 
> noted that Davis was no longer working on behalf of the mortgage giants. 
> He said Davis "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."
> 
> Asked about the reports of Davis's role, a spokesman for McCain said that 
> during the time when Davis ran the Homeownership Alliance, the senator had 
> backed legislation to increase oversight of the mortgage companies' 
> accounting and executive compensation. The legislation, however, did not 
> seek to change their anomalous structure as private companies with federal 
> support.
> 
> The spokesman, Tucker Bounds, also noted that the Homeownership Alliance 
> included nonprofit organizations like Habitat for Humanity and the Urban 
> League. "It's not controversial to promote homeownership and minority 
> homeownership," Bounds said. More than a half-dozen current and former 
> executives, however, said the Homeownership Alliance was set up mainly to 
> defend Fannie Mae and Freddie Mac by promoting their role in the housing 
> market, and the two companies paid almost the entire cost of the group's 
> operations.
> 
> "They were financed largely, possibly exclusively, by Fannie and Freddie," 
> said William R. Maloni, a Democrat who is a former head of industry 
> relations for Fannie Mae. "We thought it would be helpful to have someone 
> who was a broadly recognized Republican to be the face of the 
> organization, and that person became Rick Davis." Maloni added, "Rick, for 
> that purpose, turned out to be quite good." (Several executives said 
> Davis's compensation was not unusual for the companies' well-connected 
> consultants.)
> 
> The federal bailout of the two mortgage giants has become an emblem of 
> what critics say is the outdated or inadequate regulatory system that 
> allowed the financial system to slide into crisis this summer.
> 
> At the time that Fannie Mae and Freddie Mac recruited Davis to run the 
> Homeownership Alliance in 2000, they were under new pressure from private 
> industry rivals and deregulation-minded Republicans who argued that the 
> two companies' federal sponsorship gave them an unfair advantage and put 
> taxpayers at risk. Critics of the companies had formed their own 
> Washington-based advocacy group, FM Watch. They were pushing for 
> regulations that would deter the companies from expanding into new areas, 
> including riskier and more profitable mortgages.
> 
> Davis had recently returned to his lobbying firm from running McCain's 
> unexpectedly strong 2000 Republican primary campaign, which elevated 
> McCain's profile as a legislator and Davis's as a lobbyist.
> 
> "You can say what you want about free-market distortions, but people like 
> the system because it gets them into houses cheap," Davis said to 
> Institutional Investor magazine in 2000, adding that he would run the 
> advocacy group out of his Alexandria, Virginia, lobbying firm.
> 
> The organization also hired Public Strategies, a communications firm that 
> included former Bush adviser Mark McKinnon. Davis wrote letters and gave 
> speeches for the group. In April 2001, he sent out a press release 
> headlined, "It's Tax Day — Do You Know Where Your Deductions Are? For Most 
> Americans, They're in Your Home."
> 
> But by the end of 2005, Fannie Mae and Freddie Mac were recovering from 
> accounting problems and re-examining costs, former executives said. The 
> companies decided the Homeownership Alliance had outlived its usefulness, 
> and it disappeared.
> 
> --------------------------------------------------------------------
> 
> Seeya rouind town, Moscow.
> 
> Tom Hansen
> Moscow, Idaho
> 
> "We're a town of about 23,000 with 10,000 college students. The college 
> students are not very active in local elections (thank goodness!)."
> 
> - Dale Courtney (March 28, 2007)
> 
> 
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