John McCain's Actions and Involvement with the Fannie Mae CrisisSomervell County Salon-Glen Rose, Rainbow, Nemo, Glass....Texas

Look at how McCain Voted

John McCain's Actions and Involvement with the Fannie Mae Crisis

8 September 2008 at 12:15:12 AM

I was thinking about this today when I was mowing the lawn, wondering how McCain voted in any of the leadups that led to YOU AND ME picking up the tab for Fannie Mae and Freddie Mac BECAUSE WE ARE IN SO MUCH DEBT TO FOREIGN COUNTRIES (what would happen, for example, if China had called in their debt because of the mortgage crisis failures?) Anyway, Jon Taplin wrote it up.  Remember that when you read this McCain is pretending to be CHANGE instead of More of the SAME, but he fought regulation for 10 years.

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1 - sean   16 Sep 2008 @ 7:41:19 PM 

The democrats ransacked Fannie Mae during the 1990s and early 2000s.  Huge accounting scandal.

2 - salon   16 Sep 2008 @ 9:17:27 PM 

Must have been about the time of the huge Enron scandal. You didn't supply any sources, posting your comment but will come back to do some research on this later. I see in a cursory way that some right-wing websites would like to throw the entire blame onto Democrats, but I suspect the answer will lie someplace with both parties in Congress complicit to some degree. And that includes McCain.   From MotherJones

McCain's own campaign staffers are those special interests, a fact that casts doubt on both McCain's hiring judgment and his ability to pursue tough reforms of Fannie and Freddie.

Aquiles Suarez, listed as an economic adviser to the McCain campaign in a July 2007 McCain press release, was formerly the director of government and industry relations for Fannie Mae. The Senate Lobbying Database says Suarez oversaw the lending giant's $47,510,000 lobbying campaign from 2003 to 2006.

And other current McCain campaign staffers were the lobbyists receiving shares of that money. According to the Senate Lobbying Database, the lobbying firm of Charlie Black, one of McCain's top aides, made at least $820,000 working for Freddie Mac from 1999 to 2004. The McCain campaign's vice-chair Wayne Berman and its congressional liaison John Green made $1.14 million working on behalf of Fannie Mae for lobbying firm Ogilvy Government Relations. Green made an additional $180,000 from Freddie Mac. Arther B. Culvahouse Jr., the VP vetter who helped John McCain select Sarah Palin, earned $80,000 from Fannie Mae in 2003 and 2004, while working for lobbying and law firm O'Melveny & Myers LLP. In addition, Politico reports that at least 20 McCain fundraisers have lobbied for Fannie Mae and Freddie Mac, pocketing at least $12.3 million over the last nine years.

For years McCain campaign manager Rick Davis was head of the Homeownership Alliance, a lobbying association that included Fannie Mae, Freddie Mac, real estate agents, homebuilders, and non-profits. According to Politico, the organization opposed congressional attempts at regulation of Fannie and Freddie, along the lines of what John McCain is currently proposing. In his capacity of president of the group, Davis went on record in 2003 and insisted that no further reform of the lenders was necessary, in contradiction to his current boss's sentiments. "[Fannie and Freddie] are subject to an innovative and stringent risk-based capital stress test," Davis wrote. "The toughest in the financial services industry."

At a campaign rally Wednesday morning in Fairfax, Virginia, John McCain said that the heads of Fannie Mae and Freddie Mac ought to give back the millions of dollars they've earned. What about the lobbyists who helped Fannie and Freddie game the system? Maybe McCain can ask them — at the next campaign strategy meeting.

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3 - salon   16 Sep 2008 @ 10:51:58 PM 

One more quick overall post from Slate about Fannie Mae et al scandals and bipartisan responsibility for its problems.

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4 - doug   23 Sep 2008 @ 9:41:10 PM 

Let's discuss Senator McCain's May 25, 2006 speech on the Senate floor regarding the Federal Housing Enterprise Regulatory Reform Act that he co-sponsored: "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 "-Senator John McCain.
The Act died in the Democrat-led Senate.
 Or how about the Clinton administration easing easing down payment requirements for Fannie loans:
'Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. 'Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.'

5 - salon   23 Sep 2008 @ 10:56:34 PM 

Yes, Let's do. Your dates, first of all, are off. In May 2006 the Republicans were still in charge of the Senate. You may have forgotten that the election took place in November of 2006. The act that he co-sponsored, according to your link, was from 2005 and apparently died in Republican controlled committee . One might ask why McCain didn't co-sponsor the bill when it was reintroduced in 2007 as S 1100.  Could it be the lobbyist money that McCain's company was taking from Freddie Mac, since 2005? (And that his campaign apparently lied about?) Ironic that he complains in his speech about lobbying Congress when one of his key campaign people is still on the Freddie Mac payroll. And you have to ask, why did he wait until May of 2006 to get on as a co-sponsor, after the bill was effectively dead (and could not have been killed only by Democrats).

I don't disagree with you that some of the blame belongs with the Clinton administration. From Swampland on Time mag

Clinton said he has two regrets: First, not pursuing more aggressively an aborted attempt to provide stricter oversight of Fannie Mae and Freddie Mac. According to Clinton, the move was stymied by Democratic and Republican members of Congress and by mayors, who saw the lending giants as "the New Jerusalem" and "pure" because of their role in increasing homeownership to historic levels. But "it just didn't feel good," Clinton said of Fannie and Freddie's outsized political influence. Clinton also said he should have subjected derivative trading to more public oversight. "We would have failed, but at least we could've sounded the alarm." One policy Clinton said he doesn't regret is his 1999 repeal of the Glass-Steagall Act, which, for the first time since the Depression, allowed commercial banks to engage in investment-banking activities. Clinton said the commercial banks were an important moderating force on the risk-taking of the big investment firms that collapsed this week. "In the case of the current crisis, I believe the bill I signed allowed Bank of America to take over Merrill Lynch," he said.

Let's also not forget that it was a Republican Congress. Bush had plenty of opportunities to push for regulation. The fact is that he and other Republicans didn't want to.... because they wanted deregulation. I can recall on more than one occasion watching Bush pushing the ownership society and it seemed he did it quite a bit before minority audiences-some of that was before his re-election in 2004. Republicans were in control of Congress during at least part of Bush's presidency-that would include McCain, who despite some major flip flopping depending on which day he woke up without senior moments, is against regulation. And definitely wanted to save Fannie Mae and Freddie Mac


Senator John McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say.

Finally, it's pretty simplistic to attempt to blame the crisis and meldown on minorities and the poor. At least one other part of this is at the feet of house-flippers, who were taking risks, but the investment industry et al were happy to have them do it.

I never think that a problem is all or nothing. But McCain's hands are not clean.

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