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McCain's Rick Davis Problem

 
 
Reply Wed 24 Sep, 2008 09:56 am
McCain has a big problem - his campaign manager, Rick Davis, was a lobbyist for Fannie/Freddie back in 2000-2003. He was paid 30k a month to basically do nothing whatsoever. This has raised some questions as to whether or not he was acting as a 'pay for play' guy for McCain.

In a recent interview, McCain claimed that Davis stopped all that long ago and has had no contact with FM/FM.

Turns out that's not true. Freddie Mac continued to pay Davis' firm 15k per month, up until LAST MONTH of this year - for what, exactly? Davis said he 'quit' the firm, but he owns the firm, so he's still bringing in the cash whether or not he's the one on the front lines.

Quote:
September 24, 2008
McCain Aide’s Firm Was Paid by Freddie Mac

By JACKIE CALMES and DAVID D. KIRKPATRICK

WASHINGTON " One of the giant mortgage companies at the heart of the credit crisis paid $15,000 a month from the end of 2005 through last month to a firm owned by Senator John McCain’s campaign manager, according to two people with direct knowledge of the arrangement.

The disclosure undercuts a statement by Mr. McCain on Sunday night that the campaign manager, Rick Davis, had 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.

They said they did not recall Mr. Davis’s doing much substantive work for the company in return for the money, other than speak to a political action committee of high-ranking employees in October 2006 on the approaching midterm Congressional elections. They said Mr. Davis’s firm, Davis & Manafort, had been kept on the payroll because of Mr. Davis’s close ties to Mr. McCain, the Republican presidential nominee, who by 2006 was widely expected to run again for the White House.

Mr. Davis took a leave from Davis & Manafortfor the presidential campaign, but as a partner and equity-holder continues to benefit from its income. No one at Davis & Manafort other than Mr. Davis was involved in efforts on Freddie Mac’s behalf, the people familiar with the arrangement said.


A Freddie Mac spokeswoman said the company would not comment.

Jill Hazelbaker, a spokeswoman for the McCain campaign, did not dispute the payments to Mr. Davis’s firm. But she said that Mr. Davis had stopped taking a salary from his firm by the end of 2006 and that his work did not affect Mr. McCain.

“Senator McCain’s positions on policy matters are based upon what he believes to be in the public interest,” Ms. Hazelbaker said in a written statement.

The revelations come at a time when Mr. McCain and Mr. Obama are sparring over ties to lobbyists and special interests and seeking political advantage in a campaign being reshaped by the financial crisis and the plan to bail out investment firms.

Mr. McCain’s campaign has been attacking Senator Barack Obama, his Democratic rival, for ties to former officials of the mortgage lenders, both of which have long histories of cultivating allies in the two parties to fend off efforts to restrict their activities. Mr. McCain has been running a television commercial suggesting that Mr. Obama takes advice on housing issues from Franklin D. Raines, former chief executive of Fannie Mae, a contention flatly denied by Mr. Raines and the Obama campaign.

Freddie Mac’s roughly $500,000 in payments to Davis & Manafort began immediately after Freddie Mac and Fannie Mae in late 2005 disbanded an advocacy coalition that they had set up and hired Mr. Davis to run, the people familiar with the arrangement said.


From 2000 to the end of 2005, Mr. Davis had received nearly $2 million as president of the coalition, the Homeownership Alliance, which the companies created to help them oppose new regulations and protect their status as federally chartered companies with implicit government backing. That status let them borrow cheaply, helping to fuel rapid growth but also their increased purchases of the risky mortgage securities that were their downfall.


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.”

Such assertions, along with McCain campaign television ads tying Mr. Obama to former Fannie Mae chiefs, have riled current and former officials of the two companies and provoked them to volunteer rebuttals. The two officials with direct knowledge of Freddie Mac’s post-2005 contract with Mr. Davis spoke on condition of anonymity. Four other outside consultants, three Democrats and a Republican also speaking on condition of anonymity, said the arrangement was widely known among people involved in Freddie Mac’s lobbying efforts.

As president of the Homeownership Alliance, Mr. Davis got $30,000 to $35,000 a month. Mr. Davis, along with Fannie Mae and Freddie Mac, have characterized the alliance as a coalition of many housing industry and consumer groups to promote homeownership, but numerous current and former officials at both companies say the two mortgage companies created and bankrolled the operation to combat efforts by competitors to rein in their business. They dissolved the group at the end of 2005 as part of cost-cutting in the wake of accounting scandals and, at Freddie Mac, a lobbying scandal that forced out its former top Republican lobbyist.

On Monday, the McCain campaign accused The New York Times of bias for reporting the payments to Mr. Davis for the alliance work from the mortgage giants. Mr. Davis said that he had worked not for the two companies but for the advocacy group, which included other nonprofit organization as well, and was focused only on promoting homeownership.

After the Homeownership Alliance was dissolved, Mr. Davis asked to stay on a retainer, the people familiar with the deal said. Hollis McLoughlin, who was chief of staff to Richard F. Syron, Freddie Mac’s chief executive, arranged for a new contract with Davis & Manafort, at the reduced rate of $15,000 a month, they said. Mr. Syron lost his job in the government takeover this month. Mr. McLoughlin, who through a spokeswoman declined to comment, was a former chief of staff to Treasury Secretary Nicholas Brady in the first President Bush’s administration, and has longstanding Republican ties.

Mr. Davis was hired as a consultant, not a lobbyist, the officials said. Davis & Manafort in recent years has filed federal lobbying reports for a number of companies but not Freddie Mac or Fannie Mae.

Later in 2006, Mr. Davis was working on Mr. McCain’s emerging presidential campaign, as chief financial officer. The only thing that Freddie Mac officials could recall Mr. Davis doing for the company was the October 2006 pre-election forum with mid-level and senior executives who contribute to Freddie PAC, the company’s political action committee.

An electronic invitation to the employees, read by an official to the New York Times, said “Please join us for political food for thought” with Paul Begala, a longtime Democratic consultant, “and Rick Davis, former 2000 presidential campaign manager and current advisor to Senator John McCain.” Mr. Begala, who also was a paid consultant to Freddie Mac until this month, confirmed that the event took place.

At least two other people associated with Mr. McCain have ties to either Freddie Mac. The lobbying firm of the Republican that Mr. McCain has enlisted to plan his transition to the White House should he be elected, William Timmons Sr., earned nearly $3 million from Freddie Mac between 2000 and its seizure, federal lobbying records show. Mr. Timmons is founder of Timmons & Co., one of Washington’s best-known lobbying shops. The payments were first reported by Bloomberg News.

Mark Buse, Mr. McCain’s chief of staff for his Senate office, also is a Freddie Mac alumnus. He and his former lobbying employer, ML Strategies, registered to lobby for the company in July 2003, and received $460,000 before the association ended after 2004.

Mr. McCain and his advisers have argued that whatever connections Mr. Davis and other McCain campaign officials have had to the mortgage giants, Mr. McCain in the Senate has been an advocate for reforming them. And they have suggested that Mr. Obama is linked to the companies through donations from their employees ties to former officials there, including James Johnson, another former chief executive of Fannie Mae who was the head of Mr. Obama’s vice presidential search team until stepping aside after coming under criticism for getting a mortgage on favorable terms.

Since his first campaign for the Senate in 2004, Senator Obama has received about $126,000 in contributions from employees of Fannie Mae and Freddie Mac, while Senator McCain, over the last decade, has received about $22,000, according to the Center for Responsive Politics.


This is why the McCain camp flipped out at the NYT; for giving the lie to their attempts to paint Obama as somehow connected to this problem. It turns out that McCain's crew is deeply connected to the problem.

As of today, Davis has gone into hiding and McCain has canceled a few events. I'm sure more will be coming forth...

Cyclolptichorn
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JTT
 
  1  
Reply Wed 24 Sep, 2008 10:11 am
@Cycloptichorn,
That McCain. He sure is the expert on vetting those around him.
0 Replies
 
cicerone imposter
 
  1  
Reply Wed 24 Sep, 2008 10:24 am
@Cycloptichorn,
Now, the Secretary of the Treasury wants $700 billion without any controls on it. DUH! And congress is going to more or less give it to him without the strings attached, and pay the Rick Davis' untold millions for doing nothing.

0 Replies
 
sozobe
 
  2  
Reply Wed 24 Sep, 2008 10:24 am
@Cycloptichorn,
Yep, this is interesting. I can't tell yet if it's standard tsk-tsk and won't really break out, or if it's HUGE. The implication that they were paying Davis purely to get access to McCain if McCain became president seems pretty damn bad.

As David Donnelly, Director of Campaign Money Watch, puts it:

Quote:
"John McCain's campaign manager and Freddie Mac essentially had what amounts to a secret half a million dollar lay-a-way plan. For almost three years and as late as last month, Freddie Mac made secret, monthly payments of $15,000 to Rick Davis's firm, apparently in exchange for providing special access to a future McCain White House. If McCain knew about this, his presidential campaign should be in serious trouble. If he didn't know about it, he ought to fire Rick Davis immediately."


http://talkingpointsmemo.com/archives/219235.php
Cycloptichorn
 
  2  
Reply Wed 24 Sep, 2008 10:27 am
@sozobe,
Yup. As to whether or not it will be a 'big story,' let's ask ourselves this:

What's worse? That Davis was getting paid to do something on the behalf of Freddie Mac, or that he was getting paid to do nothing at all?

I guarantee there is more to this story.

Cycloptichorn
cicerone imposter
 
  2  
Reply Wed 24 Sep, 2008 10:44 am
@Cycloptichorn,
The impact of this story on the conservatives will be nill.
Cycloptichorn
 
  2  
Reply Wed 24 Sep, 2008 10:46 am
@cicerone imposter,
cicerone imposter wrote:

The impact of this story on the conservatives will be nill.


Once again, untrue. At the very least, it throws McCain off-balance somewhat; it constrains Davis somewhat; and it constrains McCain's ability to hit Obama on his ties to FM/FM. It takes away a line of attack. That's a problem for McCain.

As to the question of Conservative voters? Yes, they won't care, because most of them support Republican corruption 100%. Independents, on the other hand, who can say?

Cycloptichorn
cicerone imposter
 
  2  
Reply Wed 24 Sep, 2008 10:48 am
@Cycloptichorn,
Do you really believe what you're writing? McCain lies.
Cycloptichorn
 
  2  
Reply Wed 24 Sep, 2008 11:57 pm
@cicerone imposter,
You weren't kidding, CI.

http://www.newsweek.com/id/160713

Turns out that Davis may not have been completely honest about 'quitting' his company.

Cycloptichorn
cicerone imposter
 
  1  
Reply Thu 25 Sep, 2008 09:54 am
@Cycloptichorn,
Isn't this what I've been saying?
Quote:

The McCain campaign this week criticized news stories disclosing that, since 2006, Davis's firm has been paid a $15,000-a-month consulting fee from Freddie Mac, the troubled mortgage giant recently put under federal conservatorship. The stories, published Tuesday by NEWSWEEK, The New York Times and Roll Call, reported that the consulting fees continued until last month even though, according to two sources familiar with the arrangement, neither Davis nor anybody else at his firm did any substantial work for the payments.
0 Replies
 
 

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