Giants got 'access insurance' to McCain aide

[September 25, 2008]  WASHINGTON (AP) -- Pay a lobbying firm $15,000 a month for several years to do no lobbying. Pay a former campaign aide to John McCain $30,000 a month for five years following the senator's failed bid in 2000 for the presidency.

At any other time, it would be business as usual in Washington.

Not today. The money came from Fannie Mae and Freddie Mac, two failed housing giants that are a huge part of the financial crisis imperiling the economy.

And the recipient of most of the funds is McCain's current campaign manager, Rick Davis.

"The payments are for 'access insurance' with the Republican Party and with someone very close to McCain," James Thurber, director of American University's Center for Congressional and Presidential Studies, said Wednesday.

Thurber, who teaches lobbying and spent seven years looking into the conduct of political campaigns, says the money to Davis is especially instructive with regard to McCain, who bills himself as the candidate who will change the way Washington works.

Good-government groups say Washington's money trail goes a long way in explaining why the country finds itself having to hang its future on a financial bailout that may or may not work.

Over the years, the hated "r" word -- regulation -- came up frequently in Congress with regard to Fannie Mae and Freddie Mac, but not often enough, financial experts say in retrospect.

McCain was among those who said more regulation was needed, a point his campaign emphasized in lambasting The New York Times for writing about the payments to Davis and his lobbying firm.

In the end, the idea of reining in Fannie Mae and Freddie Mac always got buried under a cascade of dollars that went to both Democrats and Republicans, concludes a report by Common Cause.

Before this month's inconvenient crackup, Fannie Mae gave more than 60 percent of its $916,000 in campaign donations this election cycle to Democrats in Congress, since the party broke Republicans' long grip on Capitol Hill. Likewise, Freddie Mac gave 54 percent of its $478,000 in donations to Democrats, according to figures from the Center for Responsive Politics, a private group that tracks money in politics. Overall, the financial sector has contributed $1.6 billion to federal candidates and their parties since 1997, the center says.

The money game in Washington is played in a myriad of ways and Fannie Mae and Freddie Mac played it to the hilt. Campaign contributions, fundraisers and hiring the well-connected are all part of it.

In Davis's case, Fannie Mae and Freddie Mac set him up to run an entity they created and paid for called the Homeownership Alliance. It promoted Fannie's and Freddie's achievements and discouraged any changes to the wide-open road on which Fannie Mae and Freddie Mac operated.

Everyone -- Barack Obama's campaign included -- profited, at least until now.

On Wednesday, McCain's campaign pushed back.

"Mr. Davis has never -- never -- been a lobbyist for either Fannie Mae or Freddie Mac," the McCain campaign said in criticizing the news media's focus on the payments to Davis and his lobbying firm.

Robert McCarson, who was director of corporate relations at Fannie Mae from 1999 to 2004, said it is "ironic that the campaign that bills itself as the campaign of reform would give such a legalistic answer.

"The reality is that Rick Davis didn't have to register as a lobbyist to do his most powerful lobbying, which was to be the person that John McCain staked his future in as his campaign manager," said McCarson, a Democrat who was an aide in 1990-91 to then-Rep. Chuck Schumer, D-N.Y.

[Associated Press; By PETE YOST]

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