Jackie Calmes Article Yesterday

Ties to Fannie and Freddie:

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new_york_times:http://www.nytimes.com/2008/09/10/us/politics/10fannie.html

By JACKIE CALMES
Published: September 9, 2008
WASHINGTON — Senators Barack Obama and John McCain each cite the mess at Fannie Mae and Freddie Mac as a consequence of the corrosive coziness of lobbyists and politicians that they promise to end. But each man and his party also have ties to the fallen giants that will complicate the next president’s job of reshaping the mortgage finance companies that have been essential to the economy.

The Republican nominee, Mr. McCain of Arizona, has numerous close relationships with and contributions from current and former company lobbyists.
Mr. Obama, his Democratic rival from Illinois, is second among members of Congress in donations from the firms’ employees and political action committees.
Beyond the antilobbyist message, Mr. Obama also indicts the Bush administration and the Republicans who controlled Congress for a dozen years until 2007, including Mr. McCain.
He blames them for lax regulation that freed the companies to go deep into debt to buy the mortgages that crushed them as the housing crisis persisted. Yet his fellow Democrats in Congress have been well known as enablers of the two companies for years, protecting the firms’ dueling responsibilities to support affordable housing as well as to maximize shareholder profits.
For all their outrage now, neither Mr. Obama, with less than four years in the Senate, and Mr. McCain, after a quarter-century in the House and Senate, has a record of directly challenging the companies. Mr. Obama did warn publicly of a coming housing crisis in March 2007, five months before it erupted and the government first took action.
Several former company executives, as well as current and former Senate Republican staff members, said Mr. McCain seemed to avoid matters related to the financial industry after the last major financial crisis — the savings and loan crisis of the late 1980s. He was one of the “Keating Five” senators investigated by the Senate, accused of interceding with federal regulators for the operator of a failing thrift. Mr. McCain received a rebuke.
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.
Mr. 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.
Six members of the Republican lobbying firm Fierce Isakowitz & Blalock, all Fannie Mae lobbyists, have given Mr. McCain $13,250, records show.
The New York investor Geoffrey T. Boisi, a member of Freddie Mac’s board, contributed more than $70,000 to Mr. McCain and Republican Party committees working for his election. Both he and Richard F. Hohlt, a Fannie Mae lobbyist, are among the McCain “bundlers” who have raised $100,000 to $250,000 from others, according to the campaign Web site.
Both candidates’ vetters for their vice presidential picks have links to Fannie. The former chairman, James Johnson, initially led Mr. Obama’s search committee, but stepped aside after a controversy over favorable loan terms he received from another firm. Mr. McCain’s vetter, Arthur B. Culvahouse Jr., was a past Fannie lobbyist.
Mr. Obama’s contributors include the Freddie Mac senior vice president Robert Y. Tsien and the directors William M. Lewis Jr., a banker at Lazard, and the Chicago businesswoman Brenda J. Gaines. He does not accept contributions from lobbyists, but Mr. Obama has been a favorite of Fannie Mae employees and their political action committee, according to an analysis by the nonpartisan Center for Responsive Politics.
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Kitty Bennett contributed reporting.