Saturday, September 20, 2008

Curiouser and Curiouser

And now, for a trip down the rabbit hole.

The Washington Post published an article profiling Franklin Raines, the former Fannie Mae majordomo who has come in for justifiable criticism for his role in the financial shenanigans that took place under his watch. In the article, Post writer Anita Huslin notes that Raines also had been offering advice to Barack Obama's campaign:

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. 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 policy matters.

Not surprisingly, John McCain's campaign staff noted that and on Thursday they came out with this ad, which notes essentially what the Post reported.

Obama has no background in economics. Who advises him? The Post says it's Franklin Raines, for "advice on mortgage and housing policy." Shocking. Under Raines, Fannie Mae committed "extensive financial fraud." Raines made millions.

Fannie Mae collapsed. Taxpayers? Stuck with the bill. Barack Obama. Bad advice. Bad instincts. Not ready to lead.

Also not surprisingly, the Obama campaign didn't like the ad much and complained about it, loudly. And equally unsurprisingly, members of the news media swooped in to condemn the ad. What was surprising: that two of the people condemning the ad are with the Washington Post.

First, Howard Kurtz called the ad into question, even though he had to admit that the information that McCain's campaign used is accurate.

Fannie Mae did collapse, requiring a government takeover, and Raines, its former chairman, paid $25 million in April to settle a case brought by federal authorities investigating his role in the agency's accounting problems. But he has never been a close adviser to Obama.

The commercial's main charge is based on an April story in The Washington Post that said Raines has "taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters." Reporter Anita Huslin says Raines told her that during an in-person interview.

An Obama spokesman called the ad's contention "a flat-out lie," saying Raines has "never advised Senator Obama about anything, ever." But Raines did not claim to have advised the Illinois senator personally. In an accompanying statement, Raines said he never "provided his campaign with advice on housing or economic matters." That contradicts what he told Huslin five months ago.

In other words, either Huslin is lying or Raines is lying. Neither one of them is John McCain, though.

But then there was more - the Washington Post continued on the trail of casting doubt on the veracity of the ad. Post writer Michael Dobbs in his "Fact Checker" said this:

The McCain campaign is clearly exaggerating wildly in attempting to depict Franklin Raines as a close adviser to Obama on "housing and mortgage policy." If we are to believe Raines, he did have a couple of telephone conversations with someone in the Obama campaign. But that hardly makes him an adviser to the candidate himself -- and certainly not in the way depicted in the McCain video release.

Again, the Post does not dispute that Raines did field inquiries from Obama's campaign. Look again at the ad's text: does it say that Obama is a close adviser to Obama? No. That would be Jim Johnson, another old Fannie Mae hand who was deeply involved in the Obama campaign and whom McCain featured in another ad the following day.

So what do we make of this? Apparently John McCain was wrong to attach enough credibility to a report in the Washington Post that he used it for an advertisement. Take it from Howard Kurtz and Michael Dobbs -- Post reporting is not to be trusted.

Well, some of us have suspected that for a long time.

Cross-posted at True North


Anonymous said...

It now appears that McCain might have a small Rick Davis/Fannie/Freddie problem too.

You'd think McCain's people would vet this stuff before they start running ads calling in to question Obama's tenuous associations with former Fannie Mae officials, but apparently, they either don't care, or they do shoddy work.

So, McCain's campaign manager apparently earned a couple of million dollars from Fannie Mae & Freddie Mac to keep access to McCain open and their business free of regulation, but that isn't a problem.

But Obama's having talked to a guy who had worked there, and who offered advice (even though the guy disavows any influence or direct work with Obama's campaign), that is a problem?

If the point of this entry was to make WaPo look dumb, you succeeded, but I don't think that was the McCain point of the McCain camp. In one week, these campaigns have completely flipped positions. McCain has made more flubs in the last 7 days than I thought was possible.

BTW, Happy Anniversary to you and Jill. You make a great couple, and I really had a nice time meeting with you and your family in Chicago.

Now, lets buckle in for some baseball. Three games in the dome, and that place is like Kryptonite to the Sox in September.
It should be a memorable week.


Mark Heuring said...

The point of the post was to make fun of WaPo, so I’m glad you think I succeeded on that, good sir. I’ll read the Times piece tonight when I get a chance, although I will say this – Franklin Raines is one thing for Obama (and he did more than work there, he was CEO, but I’ll let that pass), but Jim Johnson is more important. If McCain had used Jim Johnson to run his VP search, my guess is the news would be a smidge more widespread than what’s been reported on Obama.

I think your Sox will do just fine this week. The Twins are running on fumes right now. The only thing that gives us a chance is that Ozzie has been running out his starters on 3 days rest and there’s a chance they might get lit up. But the bottom line is, if the Sox win one up here, it’s lights out.

We can definitely agree to root agin’ those Cubs, though.


Mark Heuring said...


I read the article. McCain's adviser got paid. Doesn't surprise me - lots of people got paid.

Here's the difference - Jim Johnson was directly involved in Obama's campaign, even to the point of being the point man on Obama's vice presidential search. I note that the NYT doesn't refer to that in the article. McCain ran ads on both those guys and for the times to mention Raines and not Johnson is, well, pretty typical of the Times. All the News That Fits The Narrative.

Anyway, as I posted yesterday, anyone who has spent even a minute or two in Washington in the past decade owns part of what is happening now.

Anonymous said...

I think we are in agreement that there is plenty of blame to go around, and agree that the Johnson story has legs, but I am confused by your minimalizing of Rick Davis's role in the McCain camp. He is McCain’s campaign manager, and was a longtime adviser to McCain even before the campaign. In other words, one of his key guys. My point was that, given the tenuous nature of Raines' connections to the Obama camp, and knowing that your own campaign manager and key advisor had pocketed a couple of million as the head of an advocacy group for Fannie/Freddie, I think I would have let the Raines commercial sit on the shelf. And no, I am not crying racism. Just bad judgement, which McCain seems to have in spades lately.

BTW, On the way in to work this nmorning, I heard that both Obama and McCain are suggesting that they may be too busy to vote on the bailout this week. That has got to be one of the most disturbing things I have heard all week (in what can only be described as a very disturbing week). If that is true, I have a suggested title for your next blog entry: "Moral Hazard and Moral Cowards".


Mark Heuring said...


I don’t know that I’m minimizing Davis as much as I’m saying it’s more important that Obama had one of the actual miscreants as an adviser than McCain having a guy who was getting paid by the miscreants. Davis wasn’t a decision-maker at Fan or Fred; he was simply one of the parasites at the trough. Problem was, the way Fan and Fred were set up just about every legislator in Washington had an adviser who was on the take. To put it in Chicago terms, which is worse – the bagman or the guy doling it out? Guess I’d say the guy doling it out, but feel free to disagree.

Your point about Obama and McCain not voting is an excellent one. I may have to do a rare mid-day post about that. They should both get their butts back to Washington and be on the record about this. Where these guys stand on this is information the voters should absolutely have.