Flap was watching NBC News this morning and noticed the lede of John McCain’s campaign manager of Rick Davis’ consulting income from Freddie Mac but what about Barack Obama’s ties to Freddie Mac and Fannie Mae?
Here is a piece about Franklin Raines, an Obama financial adviser.
Franklin Raines, CEO of the Federal National Mortgage Association (Fannie Mae) from 1999-2004, is the individual most responsible for the subprime mortgage crisis. It was on Mr. Raines’ watch that Fannie Mae went bankrupt.
He was accused of manipulating earnings statements so he could be paid bonuses to which he was not entitled.
In July, Mr. Raines was interviewed by Anita Huslin, a business reporter for the Washington Post.
“In the four years since he stepped down as Fannie Mae’s chief executive under the shadow of a $6.3 billion accounting scandal, Franklin D. Raines has been quietly constructing a new life for himself,” Ms. Huslin’s story began. “He has shaved eight points off his golf handicap, taken a corner office in Steve Case’s D.C. conglomeration of finance, entertainment and health care companies and, more recently, taken calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing matters.”
But, there are others like Jim Johnson, former Fannie Mae Chairman who had to resign as head of Obama’s Vice Presidential search team.
More on Jim Johnson is here.
- Jim Johnson Is The Former CEO Of Fannie Mae. (David A. Vise, â€œFannie Mae Lobbies Hard To Protect Its Tax Break,â€ The
- â€œJim Johnson, The Former Chairman Of Fannie Mae Who Was One Of Three Advisors Tapped By Democrat Barack Obama To Vet Vice Presidential Candidates, Resigned Today After Questions Were Raised About Favoritism He May Have Received From Countrywide Financial Corp.â€ (Johanna Neuman, â€œBarack Obama Advisor Jim Johnson Quits Under Fire,â€
Los AngelesTimes, 6/12/08)
- Johnson Remains A Bundler For Obamaâ€™s Presidential Campaign And Has Committed To Raising $100,000 To $200,000. (Obama For America Website, www.barackobama.com, Accessed 9/19/08)
Johnson Earned Large Bonuses At Fannie Mae Due To An Accounting Manipulation:
- In 1998, Fannie Maeâ€™s Earnings Were Manipulated, Which Resulted In â€œMaximum Payoutsâ€ To Executives Including CEO Jim Johnson. â€œAs CEO of Fannie Mae, Johnson, a former chief of staff to Vice President Walter F. Mondale and chairman of the board of the
Kennedy Center, was the beneficiary of accounting in which Fannie Maeâ€™s earnings were manipulated so that executives could earn larger bonuses. The accounting manipulation for 1998 resulted in the maximum payouts to Fannie Maeâ€™s senior executives â€” $1.9 million in Johnsonâ€™s case â€” when the companyâ€™s performance that year would have otherwise resulted in no bonuses at all, according to reports in 2004 and 2006 by the Office of Federal Housing Enterprise Oversight.â€ (Jonathan Weisman and David S. Hilzenrath, â€œObamaâ€™s Choice Of Insider Draws Fire,â€ The Washington Post, 6/11/08)
Johnson Engineered An Effort To Lobby Politicians So That Fannie Mae Would Not Have To Pay Local Taxes To
- While Johnson Was CEO, Fannie Mae Did Not Have To Pay
Washington D.C.Taxes Which Cost The City Hundreds Of Millions Per Year. â€œWhile Wall Street benefits from Fannie Maeâ€™s prosperity, the District government does not. Fannie Mae, the biggest, most profitable company in Washington, is exempt from local income taxes. That exemption costs the cash-strapped D.C. government hundreds of millions of dollars a year.â€ (David A. Vise, â€œThe Financial Giant Thatâ€™s In Our Midst,â€ The Washington Post, 1/15/95)
- â€œIf Fannie Mae Were Required To Pay Taxes, It Would Wipe Out The Districtâ€™s Budget Deficit.â€ (David A. Vise, â€œThe Financial Giant Thatâ€™s In Our Midst,â€ The Washington Post, 1/15/95)
Before Heading Fannie Mae, Johnson Was A Registered Foreign Agent For Lehman Brothers:
In The 1980s, Johnson Worked For Shearson Lehman Brothers. â€œIn the early 1980s Johnson had already started his own
Washingtonconsulting company, Public Strategies, with his Carter administration colleague Richard Holbrooke. And now he followed Holbrooke to Wall Street as an investment banker at Shearson Lehman Brothers.â€ (Lloyd Grove, â€œThe Big Chair,â€ The WashingtonPost, 3/27/98)
But, not a word on NBC about either of these two men with direct ties into the collapse of the subprime mortgage market, the financial crisis, the economic bailout plan being considered by Congress and Barack Obama. Not one word.
NBC News in the tank for Obama – all of the time.
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