On the CBS Evening News, Chip Reid uncritically aired video of Sen. John McCain claiming that the "crisis on Wall Street, my friends, started in the Washington culture of lobbying and influence-peddling, and [Sen. Barack Obama] was right square in the middle of it." However, Reid did not mention McCain's own ties to the "Washington culture of lobbying." According to a Mother Jones report, "at least 83" McCain aides, policy advisers, or fundraisers "have in recent years lobbied for the financial industry McCain now attacks."
During a report on the September 19 broadcast of the CBS Evening News, correspondent Chip Reid uncritically aired video of Sen. John McCain claiming that the "crisis on Wall Street, my friends, started in the Washington culture of lobbying and influence-peddling, and [Sen. Barack Obama] was right square in the middle of it." However, Reid did not mention McCain's own ties to the "Washington culture of lobbying." According to a September 17 Mother Jones report, "at least 83" McCain aides, policy advisers, or fundraisers "have in recent years lobbied for the financial industry McCain now attacks." Those lobbyists include several senior McCain campaign officials, including chief political adviser Charlie Black, national finance co-chairman Wayne Berman, congressional liaison John Green, Arthur Culvahouse, who reportedly headed McCain's vice-presidential search team, and William E. Timmons Sr., who reportedly "has been tapped by the McCain campaign to conduct a study in preparation for the presidential transition." Furthermore, McCain campaign manager Rick Davis previously served as president of the Homeownership Alliance, a Washington-based advocacy group whose founding members included Fannie Mae and Freddie Mac and which "defended the two companies against increased regulation," according to the Politico.
From Mother Jones' September 17 report:
McCain has been quick with fiery, populist-tinged speeches. But one thing has been missing: any acknowledgment that McCain's own campaign has been loaded with the type of people he's been denouncing. (The McCain campaign did not respond to a request for comment; we will update the post if they do.) As Mother Jones previously reported, former Senator Phil Gramm, McCain's onetime campaign chairman, used a backroom maneuver in late 2000 to slip into law a bill that kept credit default swaps unregulated. These financial instruments greased the way to the subprime meltdown that has led to today's economic crisis. Several of McCain's most senior campaign aides have lobbied for Fannie Mae and Freddie Mac. And the Democratic National Committee, using publicly available records, has identified 177 lobbyists working for the McCain campaign as either aides, policy advisers, or fundraisers.
Of those 177 lobbyists, according to a Mother Jones review of Senate and House records, at least 83 have in recent years lobbied for the financial industry McCain now attacks. These are high-paid influence-peddlers who have been working the corridors of the nation's capital to win favors and special treatment for investment banks, securities firms, hedge funds, accounting outfits, and insurance companies. Their clients have included AIG, the newest symbol of corporate excess; Lehman Brothers, which filed for bankruptcy on Monday sending the stock market into a tailspin; Merrill Lynch, which was bought out by Bank of America this week; and Washington Mutual, the banking giant that could be the next to fall. Among these 83 lobbyists are McCain's chief political adviser, Charlie Black (JP Morgan, Washington Mutual Bank, Freddie Mac, Mortgage Bankers Association of America); McCain's national finance co-chairman, Wayne Berman (AIG, Blackstone, Credit Suisse, Fannie Mae, Freddie Mac); the campaign's congressional liaison, John Green (Carlyle Group, Citigroup, Icahn Associates, Fannie Mae); McCain's veep vetter, Arthur Culvahouse (Fannie Mae); and McCain's transition planning chief, William Timmons Sr. (Citigroup, Freddie Mac, Vanguard Group).
The Homeownership Alliance announced its formation in a September 29, 2000, press release. The press release listed Fannie Mae and Freddie Mac as two of its founding members and announced that "Rick Davis, formerly presidential campaign manager for Arizona Sen. John McCain, will serve as president of the Homeownership Alliance, which will be based in Alexandria [Virginia]." From the press release:
Vowing to increase support for America's housing system so that it can expand homeownership opportunities for more Americans, housing, mortgage and community development leaders today announced the formation of the Homeownership Alliance.
The Homeownership Alliance is a broad-based public education organization that will promote the American housing system. The group will not lobby members of Congress, but will concentrate on public advocacy, principally through its web site http://www.homeownershipalliance.com. Rick Davis, formerly presidential campaign manager for Arizona Sen. John McCain, will serve as president of the Homeownership Alliance, which will be based in Alexandria.
The following organizations have joined as participating members of the Homeownership Alliance:
- The American League of Financial Institutions
- The Enterprise Foundation
- Fannie Mae
- Freddie Mac
- Independent Community Bankers Association
- Local Initiatives Support Corporation
- National Association of Home Builders
- National Association of Real Estate Brokers
- National Bankers Association
- National Urban League
Rick Davis said that homeownership in America is a core national priority. "Yet, some critics of the system, particularly those who disagree with the role currently played by the housing Government Sponsored Enterprises, are implicitly calling for policy makers to reconstruct the system so it can be more like that of other industrialized countries. But our current system is much better than theirs. Forty-percent down-payments, like they have in Germany, and huge prepayment penalties that are the norm for refinancing in some European countries are things we did away with decades ago, and we certainly don't want to turn the clock back," Davis said.
In a September 1, 2000, article (retrieved from the Factiva database), Institutional Investor wrote of Davis' involvement with the Homeownership Alliance:
Rick Davis loves an underdog. After serving as Senator John McCain's campaign manager, he recently joined the cause of defending Fannie Mae and Freddie Mac. The agencies, which dominate the market for mortgage-backed securities, find themselves under attack from Congress, from the Treasury Department and from Federal Reserve chairman Alan Greenspan. All want to tighten regulation and strip the agencies of some of their special privileges as government-sponsored enterprises. "You can say what you want about free-market distortions, but people like the system because it gets them into houses cheap," notes Davis, who will run an advocacy group called the Homeownership Alliance out of his Alexandria, Virginia, lobbying firm. He was recruited by Fannie Mae senior vice president John Buckley, whom he met while working on Ronald Reagan's 1984 reelection campaign. Says Davis, "What we tried to do in the McCain campaign parallels what we want to do here -- protect the consumer."
Liz Wolgemuth of U.S. News & World Report noted the Institutional Investor article in a September 19 blog post.
According to the Internet Archive's cache of the Homeownership Alliance website -- which is no longer accessible -- Davis was listed as president of the organization as late as February 2006. At the time, senior vice presidents for both Fannie Mae and Freddie Mac served on the Alliance's board as "Senior Advisor[s]." Tribune Media's Andrew Zajac reported on June 11 that the Homeownership Alliance "dissolved about two years ago."
In a July 16 Politico article, Lisa Lerer wrote of Davis' tenure as president of the Homeownership Alliance: "[F]or years, Rick Davis served as president of an advocacy group led by Fannie Mae and Freddie Mac that defended the two companies against increased regulation." The article also stated:
McCain campaign manager Davis headed the Homeownership Alliance, a lobbying association that included Fannie, Freddie, nonprofit groups, real estate agents, homebuilders and consumer advocates. The group's stated goal was to increase affordable housing. But it also worked to oppose congressional efforts to tighten controls on Fannie and Freddie.
In July 2003, Davis wrote to the American Banker, taking issue with an opinion piece by Leslie Paige of Citizens Against Government Waste, arguing that Fannie and Freddie should operate with greater transparency.
"Several of Ms. Paige's assertions bear correction," Davis wrote, defending Fannie and Freddie on behalf of the group. "The GSEs [government sponsored enterprises] are subject to an innovative and stringent risk-based capital stress test -- the toughest in the financial services industry."
In a letter to The New York Times, which has yet to be published by the Times but was posted on the Politico's website around the time of Reid's September 19 report, former Fannie Mae senior vice president William Maloni wrote:
Yesterday, Senator John McCain released a television commercial attacking Barack Obama for allegedly receiving advice on the economy from former Fannie Mae CEO Franklin Raines. From the stump, he has recently tried tying Senator Obama to Fannie Mae, as if there is some guilt in the association with Fannie Mae's former executives.
It is an interesting card for Senator McCain to play, given that his campaign manager, Rick Davis, was paid by Fannie Mae and Freddie Mac several hundred thousand dollars early in this decade to head up an organization to lobby in their behalf called The Homeownership Alliance. ...
I worked in government relations for Fannie Mae for more than 20 years, leading the group for most of those years. When I see photographs of Sen. McCain's staff, it looks to me like the team of lobbyists who used to report to me. Senator McCain's attack on Senator Obama is a cheap shot, and hypocritical.
As Media Matters for America documented, a July 11, 2007, Politico article reported that Davis "founded a lobbying firm -- Davis Manafort Inc. -- which has made at least $2.8 million lobbying Congress since 1998." According to disclosure reports filed with Congress, Davis registered to lobby from 1998 to 2005 for Davis Manafort. A February 3, 2007, National Journal article reported that "Davis, a longtime lobbyist and financial consultant," is "on leave" from Davis Manafort to work for McCain's campaign.
Media Matters has noted that several other media outlets recently reported that the McCain campaign attacked Obama for what it says are his ties to Freddie Mac and Fannie Mae without noting that several senior McCain campaign aides have lobbied for one or both of those entities.
From the September 19 broadcast of the CBS Evening News with Katie Couric:
REID: Earlier in Green Bay, Wisconsin, where the race is also tight, McCain laid out his economic plan, heavy on government intervention. The centerpiece, a new federal agency, the Mortgage and Financial Institutions Trust, to identify troubled businesses long before they need a government bailout. Also, new laws and regulations to make what happens on Wall Street more transparent, to protect consumers and investors, and to put financial wrongdoers behind bars.
McCAIN: On my watch, the consequences for corporate abuse will not be more enrichment, but more likely an indictment.
REID: But while McCain's speech was billed as a policy address, he spent much of his time bashing Barack Obama.
McCAIN: The crisis on Wall Street, my friends, started in the Washington culture of lobbying and influence-peddling, and he was right square in the middle of it.
REID: Here in Minnesota, the unemployment rate is now the highest it's been in more than 20 years, so whoever wins here will probably be whoever has the best plan for the economy. Katie.
KATIE COURIC (anchor): Chip Reid. Chip, thanks a lot.