Sunday, October 5, 2008

Obama vs. Mccain: Fannie Mae and Freddie Mac Connections

A viral email that is going around claims that 3 former Fannie Mae executives are Obama's chief economic advisors.

That is false. Here is a thorough debunking from

The email names Franklin Raines, Jim Johnson, and Tim Howard. The first two are former Fannie CEOs, and Howard was a former CFO (chief financial officer).

Key points: (1) the whole substance of the connection between Obama and Raines was that Raines "had gotten a couple of calls from the Obama campaign" in which they talked about "general housing and economy issues, " (2) Jim Johnson was originally part of the team vetting potential VP running mates but resigned after a month, and (3) there's no connection at all between Tim Howard and Obama.

(For our list of people who are actually Obama's economic advisors, see this page.)

In stark contrast, McCain has numerous close connections to Fannie Mae and Freddie Mac, starting with his campaign manager Rick Davis, who was paid several hundred thousand dollars to lobby on their behalf. See our writeup here and more discussion here. Another highlight is Freddie Mac William Timmons, who heads up McCain's presidential transition team.

What follows is detailed listing of McCain's other deep ties to Fannie Mae and Freddie Mac, taken from Mark Halperin's page:

Six of his advisers and fundraisers lobbied for Freddie Mac including:

· McCain’s Current Chief of Staff Mark Buse,
· top McCain adviser Charles Black,
· Carlos Bonilla,
· Al D’Amato,
· Juleanna Glover Weiss
· Susan Molinari.

Thirteen of them lobbied for Fannie Mae including:

· McCain’s Congressional Liaison John Green,
· Head of VP Search Team AB Culvahouse,
· Wayne Berman,
· Kirk Blalock,
· Alberto Cardenas,
· Kirsten Chadwick,
· Richard Holht,
· Kate Hull,
· Aleix Jarvis,
· Tom Loeffler,
· Peter Madigan,
· Allison McSlarrow
· Aquiles Suarez. [John, Senate Lobbying Disclosures]

According to the New York Times, “More than Mr. Obama, Mr. McCain’s circle of advisers and contributors includes current and former lobbyists or directors for the companies, although since July he has called for a ban on any lobbying by the two firms. Among the companies’ past advocates are Mr. McCain’s campaign manager, Rick Davis, a longtime lobbyist; Mr. McCain’s confidant and adviser Charlie Black, whose firm worked for Freddie Mac for several years ending in 2005, and the deputy campaign finance chairman, Wayne L. Berman, a vice president for Ogilvy Worldwide and a former Fannie Mae lobbyist.” [New York Times, 9/10/08]

McCain Campaign Manager Rick Davis Led Efforts To Fight Off Regulations For Fannie And Freddie. “Davis previously was head of the Homeownership Alliance, a coalition of banks and housing industry interests led by Fannie and Freddie to stave off regulations. The group was formed to counter another organization, FM Watch, an alliance of financial institutions and lobbying associations that wanted to even the playing field against Fannie Mae and Freddie Mac, by challenging the implicit government guarantee that allowed the two firms to borrow funds at lower interest rates.” [New York Times, 9/10/08]

* Davis and Homeownership Alliance Fought Against Effort to Impose “Burdensome Regulatory Process” on Fannie & Freddie. “It shouldn’t have come as a surprise to anyone when the Homeownership Alliance announced its opposition last week to legislation by Rep. Richard Baker, R-Baton Rouge, to strengthen regulatory oversight for Fannie Mae and Freddie Mac, the two giant agencies that buy home mortgages to expand homeownership opportunities. Rick Davis, president of the Homeownership Alliance, said that ‘we are concerned that Rep. Baker’s bill would break the first rule of any legislation related to housing — that is, to do no harm to the greatest housing system in the world.’ He said the bill ‘presents the potential for a burdensome regulatory process that could lead to less consumer choice, reduced availability of financing and higher prices for home purchases and multi-family construction.’ What Davis didn’t say is that Fannie Mae and Freddie Mae are both members of his alliance, which also includes the National Association of Home Builders and National Association of Real Estate Brokers. Baker, chairman of the House Capital Markets, Insurance and Government Sponsored Enterprises Subcommittee, has said that Fannie Mae and Freddie Mac have gotten so big, and have piled up so much debt, that more oversight is needed. If either of them failed, it could do major damage to the U.S. economy, he said.” [Times Picayune, 4/15/01]

19 McCain Fundraisers & Advisers Lobbied For Fannie Mae Or Freddie Mac. Nineteen McCain advisers and fundraisers lobbied for Fannie Mae and Freddie Mac.

McCain Senior Adviser Wayne Berman Continues to Lobby for Fannie Mae. Wayne Berman has lobbied for Fannie Mae and Freddie Mac from 2004 through the 2nd quarter of 2008. Their firm earned over $100,000 from Freddie Mac in 2004 and over $1 million from Fannie Mae. [Senate Lobbying Disclosures]

Head of McCain’s VP Search Team Lobbied for Fannie Mae. McCain tapped Arthur B. Culvahouse Jr., the former Reagan administration official, to head his search for a running mate. Currently a partner at O’Melveny & Myers, Culvahouse lobbied on behalf of Fannie Mae in 1999, 2003 and 2004, according to Senate records. [, 7/16/08; Senate Lobbying Disclosures]

Top Adviser Charlie Black Lobbied for 10 Years for Freddie Mac. Black is “one of McCain’s top advisors,” and “at the helm of McCain’s campaign.” Black joined McCain’s campaign of March 2007, but did not stop lobbying until March of 2008. He is described as, “schooled at the knee of Jesse Helms and so entrenched in the ways of Washington that he has enjoyed access to Republican presidents since Ronald Reagan.” Black lobbied for Freddie Mac from 1999-2004, earning the firm he co-owns $820,000. [The News & Observer (Raleigh, North Carolina), 8/31/08; Senate Lobbying Disclosures]

Former McCain Co-Chair and Current Bundler, Loeffler Lobbied for Fannie Mae. Loeffler lobbied for Fannie Mae in 1999. His firm earned $40,000 from Fannie Mae that year. [Senate Lobbying Disclosures, 1999; New York Times, 7/16/08; Newsweek, 5/26/08]

Super-Lobbyists Wayne Berman & John Green Serve in High-Level McCain Campaign Positions. In March 2008, the McCain campaign announced that John Green “a founding partner of what is now Ogilvy Government Relations” would take a leave from lobbying to join the campaign full-time as its Capitol Hill liaison. John Green’s colleague Wayne Berman, a Bush “Super Ranger” serves co-chairman of McCain’s national finance committee, as well as the campaign’s vice chairman and as a senior adviser. Additionally, Berman also handles congressional outreach and “talks to lawmakers on McCain’s behalf.” Berman and Green both lobbied for Fannie Mae from 2004-2007, earning over $1 million from Fannie Mae. They also lobbied for Freddie Mac earning over $100,000 for their firm in 2004. [New York Times, 2/7/08; Financial Times, 11/27/07; Washington Post, 11/20/07; The Hill, 7/19/07; The Politico, 3/4/08; John McCain Supporters, ; Senate Lobbying Disclosures ]

McCain’s Current Chief of Staff Lobbied for Freddie Mac. McCain’s current Senate Chief of Staff Mark Buse lobbied for Freddie Mac from 2003-2004, earning $460,000. [Senate Lobbying Disclosures]

McCain Getting Economic Advice from Former Fannie & Freddie Directors. McCain’s economic adviser Aquiles Suarez worked as Fannie’s director of government and industry relations. His finance co-chairman Frederic V. Malek is a former Freddie Mac board member. [, 7/16/08]

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