McCain aide’s firm was paid by Freddie Mac

Bias accusations against New York Times
On Monday, the McCain campaign accused The New York Times of bias for reporting the payments to Mr. Davis from the mortgage giants. Mr. Davis said that had worked not for the two companies but for the advocacy group, which included other nonprofit organization as well.

After the Homeownership Alliance was dissolved, Mr. Davis asked to stay on a retainer, the people familiar with the deal said. Hollis McLoughlin, who was chief of staff to Richard F. Syron, Freddie Mac’s chief executive, arranged for a new contract with Davis & Manafort, at the reduced rate of $15,000 a month, they said. Mr. Syron lost his job in the government takeover this month. Mr. McLoughlin, who through a spokeswoman declined to comment, was a former chief of staff to Treasury Secretary Nicholas Brady in the first President Bush’s administration, and has longstanding Republican ties.

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, including SBC Telecommunications, Fruit of the Loom, Comsat, Gtech, Airborne Express, BellSouth and Verizon—all businesses with legislative interests before the Senate Commerce Committee, where Mr. McCain has been chairman or senior Republican. It has filed no reports registering to lobby for Freddie Mac or Fannie Mae.

Later in 2006, Mr. Davis was working on Mr. McCain’s emerging presidential campaign, as chief financial officer. The only thing that Freddie Mac officials could recall Mr. Davis doing for the company was the October 2006 pre-election forum with mid-level and senior executives who contribute to Freddie PAC, the company’s political action committee.

An electronic invitation to the employees, read by an official to the New York Times, said “Please join us for political food for thought” with Paul Begala, a longtime Democratic consultant, “and Rick Davis, former 2000 presidential campaign manager and current advisor to Senator John McCain.” Mr. Begala, who also was a paid consultant to Freddie Mac until this month, confirmed that the event took place.

Not unusual to have people on payrolls
A Freddie Mac executive said that as the event was being planned, and organizers were looking for a speaker from each party, “People at the office were saying, ‘Well, we have Rick Davis on contract and we never use him for anything. Why don’t we at least get him up here to talk like he knows what’s going on in the campaigns?”

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It was not unusual for Freddie Mac and Fannie Mae to have well-connected people from both parties on their payrolls, but doing little work, in the high-flying days. The purpose, people who worked at the companies said, was bipartisan insurance against new regulations or loss of the implicit government guarantee, which seemed at risk during both the Clinton and current Bush administrations.

At least two other people associated with Mr. McCain have ties to either Freddie Mac. The lobbying firm of the Republican that Mr. McCain has enlisted to plan his transition to the White House should he be elected, William Timmons Sr., earned nearly $3 million from Freddie Mac between 2000 and its seizure, federal lobbying records show. Mr. Timmons is founder of Timmons & Co., one of Washington’s best-known lobbying shops. The payments were first reported by Bloomberg News.

Mark Buse, Mr. McCain’s chief of staff for his Senate office, also is a Freddie Mac alumnus. He and his former lobbying employer, ML Strategies, registered to lobby for the company in July 2003, and received $460,000 before the association ended after 2004.

Ties to mortgage giants
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. And they have suggested that Mr. Obama is linked to the companies through donations from their employees ties to former officials there, including James Johnson, another former chief executive of Fannie Mae who was the head of Mr. Obama’s vice presidential search team until stepping aside after coming under criticism for getting a mortgage on favorable terms.

In an interview Tuesday with conservative talk-radio host Neal Boortz, Mr. McCain said, “I remember warning at that time that Fannie and Freddie were out of control and that they needed to be reined in. And, frankly, I warned that this kind of thing could lead to serious problems. Now, in full disclosure, I didn’t foresee something this huge, but certainly I saw the fundamentals there for serious problems when you have a quasi government agency acting the way they did.”

When Mr. Boortz noted approvingly that Mr. McCain had co-sponsored a Senate bill to mandate new regulations, Mr. McCain said, “I remember it very well.”

But a Freddie Mac official said Mr. McCain “never took on the role that some other Republicans did” to try to limit the companies. He named instead Senators Chuck Hagel of Nebraska, John Sununu of New Hampshire and Elizabeth Dole of North Carolina, all of whom were on the banking committee during recent years. “I remember working against a number of amendments and they were always introduced by Hagel and Sununu. John McCain was never anywhere to be found.”

A check of the records for the legislation that Mr. Boortz mentioned shows that Senator Hagel was the original sponsor on Jan. 26, 2005, and Senators Sununu and Dole were co-sponsors then. Mr. McCain did not sign on as a co-sponsor for more than a year, on May 25, 2006.

This article, "McCain Aide’s Firm Was Paid by Freddie Mac," first appeared in the New York Times.

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