New York Times Lies About McCain Campaign Ties To Freddie Mac

Proving once again that it is nothing more than a mouthpiece for the Obama campaign, the New York Times runs another front-page story containing blatant misrepresentations in an attempt to tie Sen. John McCain to the Freddie Mac and Fannie Mac failures and to cover up the deep ties Obama has to the two failed institutions. The newspaper opens its story with prepared text from the Obama campaign:

"One of the giant mortgage companies at the heart of the credit crisis paid $15,000 a month to a firm owned by Senator John McCain's campaign manager from the end of 2005 through last month, according to two people with direct knowledge of the arrangement.

The disclosure contradicts a statement Sunday night by McCain that the campaign manager, Rick Davis, had no involvement with the company for the last several years."

The campaign of Sen. John McCain was quick to call out the New York Times for its deceitful reporting. Rick Davis has not been associated with the firm in question, Davis Manafort, since 2006. The Times' original story suggested Davis had been a registered lobbyist for Freddie Mac. Davis has never been a registered lobbyist for Freddie Mac or Fannie Mac and has not registered to lobby for the past three years. The McCain campaign points out the NY Times complete failure to investigate Obama's ties to the failed institutions. Franklin Raines and Jim Johnson, two former executives with the failed institutions, pocketed tens of millions of dollars before leaving behind the mess at Fannie Mae. Obama collected more campaign contributions from the two institutions than any other member of Congress except for Sen. Chris Dodd, the senator who chairs the committee overseeing the mortgage industry. The campaign statement reads:

The New York Times has never published a single investigative piece, factually correct or otherwise, examining the relationship between Obama campaign chief strategist David Axelrod, his consulting and lobbying clients, and Senator Obama. Likewise, the New York Times never published an investigative report, factually correct or otherwise, examining the relationship between Former Fannie Mae CEO Jim Johnson and Senator Obama, who appointed Johnson head of his VP search committee, until the writing was on the wall and Johnson was under fire following reports from actual news organizations that he had received preferential loans from predatory mortgage lender Countrywide.

Therefore this "report" from the New York Times must be evaluated in the context of its intent and purpose. It is a partisan attack falsely labeled as objective news. And its most serious allegations are based entirely on the claims of anonymous sources, a familiar yet regretful tactic for the paper.

McCain's campaign notes the NY Times refusal to acknowledge McCain's efforts to clean up the mortgage mess more than two years ago, which fell on deaf ears in Congress. Here's the prescient statement from McCain two years ago:

Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management,
which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. 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.

With the New York Times' parent company's stock and profits way down, you have to wonder who is looking out for the shareholders' interests at the newspaper. This continued partisan news reporting that is completely lacking in journalistic integrity is destroying the newspaper. Fewer readers mean fewer subscription and ad revenues. It's that simple. Instead of devoting its efforts to fabricating stories trying to link McCain to the country's financial crisis, perhaps the editors at the newspaper should spend a little time figuring out what is bringing on the financial crisis which threatens the newspaper's own existence.