September 24th 2008
The McCain/NYT Wars Heat Up

A
fter the McCain camp’s lash-out at the NYT earlier this week over its reporting on campaign manager Rick Davis’ relationship with Freddie Mac, the NYT proved the old adage today about not picking fights with businesses that buy their ink by the barrel:
McCain Aide’s Firm was Paid by Freddie Mac
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.
It goes on for two clicks quoting several anonymous sources … and proves nothing. First, after 17 paragraphs, deep on the second page of the posted story, we see the buried body:
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.
Well, why didn’t you say that in the first place, NYT? As we all now know, Davis’ firm headed up an outfit called the Homeowners Alliance that advocated – not lobbied – for more homeownership. Here’s a news release about them from the Freddie Mac site:
Cities across the country are taking action to make housing more affordable for American families, according to a report released by The Homeownership Alliance, a coalition of almost 20 organizations committed to ensuring support for the American housing system of which Freddie Mac is a charter member. The report, Affordable Homes: Best Practices for America, is a survey of affordable homeownership programs in the top 20 municipalities nationwide.
Programs in the following cities in the study are highlighted as best practices for increasing affordable homeownership: Atlanta; Baltimore; Chicago; Minneapolis, Minn.; New York; Philadelphia; Phoenix; Pittsburgh; Riverside, Calif.; San Diego; Seattle and Washington.
By identifying existing best practices for increasing homeownership opportunities, the Alliance hopes to foster information sharing among state and local housing officials that will encourage widespread, lasting progress on this pressing issue.
Did you notice? The Alliance had 20 nonprofit members; it’s not just Freddie Mac. The National Association of Homebuilders, of which I am a member, was one of them. The NYT article makes it sound like all the payments Davis’ firm received for running the coalition came from Freddie and Fannie. Maybe; but in not mentioning the other members, the NYT is being deceptive.
Immediately, the McCain camp fired back:
Today the New York Times launched its latest attack on this campaign in its capacity as an Obama advocacy organization. Let us be clear about what this story alleges: The New York Times charges that McCain-Palin 2008 campaign manager Rick Davis was paid by Freddie Mac until last month, contrary to previous reporting, as well as statements by this campaign and by Mr. Davis himself.
In fact, the allegation is demonstrably false. As has been previously reported, Mr. Davis separated from his consulting firm, Davis Manafort, in 2006. As has been previously reported, Mr. Davis has seen no income from Davis Manafort since 2006. Zero. Mr. Davis has received no salary or compensation since 2006. Mr. Davis has received no profit or partner distributions from that firm on any basis — weekly, bi-weekly, monthly, bi-monthly, quarterly, semi-annual or annual — since 2006. Again, zero. Neither has Mr. Davis received any equity in the firm based on profits derived since his financial separation from Davis Manafort in 2006.
Further, and missing from the Times‘ reporting, Mr. Davis has never — never — been a lobbyist for either Fannie Mae or Freddie Mac. Mr. Davis has not served as a registered lobbyist since 2005.
Though these facts are a matter of public record, the New York Times, in what can only be explained as a willful disregard of the truth, failed to research this story or present any semblance of a fairminded treatment of the facts closely at hand. The paper did manage to report one interesting but irrelevant fact: Mr. Davis did participate in a roundtable discussion on the political scene with…Paul Begala.
But the most telling passage is this:
The New York Times has never published a single investigative piece, factually correct or otherwise, examining the relationship between Obama campaign chief strategist David Axelrod, his consulting and lobbying clients, and Senator Obama. Likewise, the New York Times never published an investigative report, factually correct or otherwise, examining the relationship between Former Fannie Mae CEO Jim Johnson and Senator Obama, who appointed Johnson head of his VP search committee, until the writing was on the wall and Johnson was under fire following reports from actual news organizations that he had received preferential loans from predatory mortgage lender Countrywide.
Therefore this “report” from the New York Times must be evaluated in the context of its intent and purpose. It is a partisan attack falsely labeled as objective news. And its most serious allegations are based entirely on the claims of anonymous sources, a familiar yet regretful tactic for the paper.
Then there’s this little fact: While all this was going on, McCain was railing against Freddie and Fannie as risky businesses that required greater oversight. Here’s what he said in the Senate in May 2006, the same time the NYT is focused on in its Davis story:
Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
How does the NYT deal with this advocacy by the candidate? In the next to the last paragraph, the NYT quietly whispers an admission:
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.
Stellar placement, eh? It’s one of the best examples ever of my long-held view that objectivity (defined by journalists as “telling both sides,”) has nothing to do with fairness. But that’s hardly the worst of it. Here’s the very last paragraph, tacked on the end where few will see it:
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.
Oh. Help me out here. Are we electing a campaign manager or a president?


ANCHORAGE — When Gov. Sarah Palin of Alaska took center stage at the Republican convention last week, she sought to burnish her “hockey mom” credentials by assuring the audience that the only difference between a hockey mom and a pitt bull is lipstick.
So the first test is “does the ad put black and white people together,” or specifically black men and white women? Sort of like Heidi Klum and Seal, who we regularly see on those racist programs Entertainment Tonight and Access Hollywood.


