Freddie Mac Paid McCain Aide's Firm
Associated Press
Wed Sep 24, 2008
Category: U.S. News
WASHINGTON - Almost up until the time it was taken over by the government in the nation's financial crisis, one of two housing giants paid $15,000 a month to the lobbying firm of John McCain's campaign manager, a person familiar with the financial arrangement says.
The money from Freddie Mac to the firm of Rick Davis is on top of more than $30,000 a month that went directly to Davis for five years starting in 2000.
The $30,000 a month came from both Freddie Mac and Fannie Mae, the other housing entity now under government control because of the nation's financial crisis.
Roll Call, a Capitol Hill newspaper, reported early Tuesday evening that Davis' lobbying firm remained on the Freddie Mac payroll. The New York Times reported all the payments, posting an article on its Web site Tuesday night revealing the $15,000 a month to the firm of Davis Manafort. The newspaper quoted two people with direct knowledge of the arrangement.
On Wednesday, the campaign of McCain's Democratic presidential rival, Barack Obama, accused Davis and McCain's campaign of not telling the truth about Davis' continuing financial relationship with Freddie Mac.
Campaign spokesman Dan Pfeiffer said it was troubling that Davis' firm "continued to be compensated by Freddie Mac until as recently as last month, but that the firm did little work and apparently was being paid simply to provide access to the McCain campaign."
McCain' vice presidential running mate, Alaska Gov. Sarah Palin, said her understanding was that Davis had recused himself from the firm's business.
"I don't know how long ago, a year or two ago that he's not benefiting from that," she said when questioned about the payments during an interview Wednesday with "CBS Evening News" anchor Katie Couric. "And you know, I was ... I would hope that's not the case."
Asked about potential conflicts of interest, Palin said: "Again, my understanding is that he recused himself from the dealings with Freddie and Fannie, any lobbying efforts on his part there," she said. "And I would hope that's the case because, as John McCain has been saying, and as I've been on a much more local level and also rally against, is the undue influence of lobbyists in public policy decisions being made."
McCain's campaign said the $15,000 a month went to Davis' firm, not to Davis.
"Mr. Davis has received no salary or compensation ... no profit or partner distributions ... neither has Mr. Davis received any equity in the firm based on profits derived since his financial separation" from the firm in 2006, the campaign said in a statement posted on its Web site.
In that statement, the McCain campaign mischaracterized the Times report, alleging that its story said Davis was paid by Freddie Mac. In fact, the newspaper said Freddie Mac paid Davis's firm.
A person familiar with the contract says the $15,000 a month in payments to Davis' firm started around the end of 2005 and continued until the past month or so. The person spoke to The Associated Press on condition of anonymity.
Freddie Mac and Fannie Mae paid Davis $30,000 a month after recruiting him to run a newly created group, the Homeownership Alliance. The five years of payments followed McCain's failed bid for the presidency in 2000.
The connection between Davis and the housing giants that figure centrally in the global financial crunch emerged after the McCain campaign unleashed a sharp attack on Obama.
McCain has tied Obama to Fannie and Freddie's troubles and has called on Jim Johnson and Franklin Raines -- both Obama supporters and former Fannie Mae executives -- to return large golden parachute payments they received from the corporations after leaving.
McCain's campaign released a television ad that says Raines is among those advising Obama on housing policy.
Obama's campaign released a statement from Raines, who says he is not an Obama adviser.
Robert McCarson, a former spokesman for Fannie Mae, criticized the McCain campaign's attack on Obama, given the five years of payments to Davis.
"It's either idiocy or hubris" on the McCain campaign's part, McCarson, a Democrat, said in an interview.
Share your thoughts in the Forum
