Behind The News
John McCain got lucky last week. Less than 24 hours after the New York Times broke a story about McCain’s campaign manager, Rick Davis’ ties to the Freddie Mac, the big home lender that failed during the Wall Street collapse, the story disappeared from the headlines.
According to the Sept. 23 New York Times article, despite a McCain order earlier this year that no campaign staff could be currently earning income from lobbying work, Davis’ Washington lobbyist firm, Davis Manafort, continued to receive payments of $15,000 per month from the mortgage lender.
The payments began in late 2005 and continued until this past August. Altogether, Davis Manafort reportedly took about $500,000 from Freddie Mac. Though on “leave” from Davis Manafort, Davis as an owner of the firm continues to earn income from its profits.
The violation of the McCain campaign promise wasn’t the whole story either. Former Freddie Mac officials, responding to McCain’s claim that Davis had not received payments from Freddie Mac, could not recall Davis’ lobbying firm “doing much substantive work for the company in return for the money.” They claimed the payments were meant to purchase access to the McCain campaign, the Times reported.
Prior to accepting the payments from Freddie Mac, Davis accepted about $2 million dollars to head a “coalition” called the Homeownership Alliance, a group co-founded by Freddie Mac and Fannie Mae. On paper, the Homeownership Alliance was supposed to help families buy new homes. In reality, The New York Times reported, the Homeownership Alliance, headed by John McCain’s campaign manager, was created “to help them oppose new regulations and protect their status as federally chartered companies with implicit government backing.”
As the Times reported, Davis’s job was to help Freddie Mac and Fannie Mae keep a legal “status that let them borrow cheaply, helping to fuel rapid growth but also their increased purchases of the risky mortgage securities that proved to be their downfall.” Simply put, Davis helped the two big lenders do the very things that caused their failures as well as the general financial collapse on Wall Street.
The day after The New York Times published these revelations, the Washington Post, in addition to reprinting their own version of the same story, published the results of their new joint poll with ABC News that had Obama ahead nationally by nine points. That evening, Sept. 24, the first part of the CBS News interview with Sarah Palin proved so embarrassing to the McCain campaign that some Republicans started to demand Palin’s recall as vice presidential nominee.
In the end, McCain got lucky. The financial crisis allowed him to “suspend” his campaign, go to Washington as a deal maker (or as it turned out a deal breaker), threaten to cancel the first presidential debate and stir the pot with other distractions, avoiding the fallout from the Davis revelations, the Palin fiasco, and sinking poll numbers.
Or maybe it wasn’t luck at all?
Behind The News