So Much For That Attack

John McCain's campaign was eager to paint Barack Obama as a tool for special interests in the lending industry. They cut guilt-by-association ads linking him to figures inside the company. It was going to be great.

All that evaporated when the New York Times revealed that Rick Davis, McCain's own campaign manager, was taking $15,000 a month from Freddie Mac for lobbying services, and today they advanced the story:

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

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

It actually shows that statement to be a lie, but hey, semantics. Newsweek ran with this scoop as well.

Can I just say that Rick Davis might be the worst top staffer for a major-party Presidential candidate since Susan Estrich? They guy ran such a bad campaign through the spring that he had to be kicked upstairs in favor of Steve Schmidt. Then he spouts off about how the campaign is "not about issues," a line the Obama campaign had fun with for weeks. And his lobbyist past keeps intruding on McCain's message, and in this case he was literally kept on Freddie Mac's payroll solely because of his relationship with McCain. He's not only unhelpful, he's downright harmful.

The Homeownership Alliance, the consortium Davis headed, was created by Fannie and Freddie to curtail excessive regulation on the two GSEs. And I'd add that the goal of it was also to encourage and increase homeownership across socioeconomic and racial lines, a cause Davis championed, so the notion that Democrats caused the mortgage crisis by letting black people own houses is frankly ridiculous.

By the way, Paul Begala was a paid consultant to Freddie Mac, and they had far less of an impact on the mortgage problems of this country than McCain, looking for a convenient scapegoat, suggests. This is more about McCain swinging wildly at Obama with a charge and having it rebound on him. But with Freddie and Fannie now under investigation by the FBI for unspecified "fraud", clearly those organizations are toxic, and Davis' retainer will be questioned.

And The Lies And Distortions Continue

So I guess McCain has been slamming Barack Obama's ties to individuals in his orbit with ties to Fannie Mae and Freddie Mac, while having his campaign manager receive millions from the mortgage giants to lobby for them against increased government regulation:

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 [...]

...several current and former executives of the companies came forward to discuss the role that Rick Davis, Mr. McCain’s campaign manager and longtime adviser, played in helping Fannie Mae and Freddie Mac beat back regulatory challenges when he served as president of their advocacy group, the Homeownership Alliance, formed in the summer of 2000. Some who came forward were Democrats, but Republicans, speaking on the condition of anonymity, confirmed their descriptions.

“The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again,” said Robert McCarson, a former spokesman for Fannie Mae, who said that while he worked there from 2000 to 2002, Fannie Mae and Freddie Mac together paid Mr. Davis’s firm $35,000 a month.

After the Obama campaign decided to make an issue of this, McCain decided to shoot the messenger and claim that the New York Times is not a real news organization. Which I'm sure endeared them to their conservative base, but is pretty much a non-answer answer. It certainly doesn't address Davis' lobbying on behalf of deregulation, which matches up perfectly with the words out of McCain's mouth:

Q: In 1999, you were one of the senators who helped pass deregulation of Wall Street. Do you regret that now?

McCAIN: No. I think the deregulation was probably helpful to the growth of our economy.

While McCain is hiding behind Obama on the subject of the Wall Street bailout and hoping not to catch any shrapnel, he has been vocal, along with key Democrats, in rejecting massive golden parachutes for CEOs of the effective companies. Which is a solid argument, made less solid by having a CEO who received a golden parachute as a member of your economic inner circle:

On NBC this morning, host Meredith Vieira noted that (Carly) Fiorina “is an example of exactly the kind of person you say is at the root of the problem.” McCain replied, “I don’t think so”:

McCAIN: I don’t think so. … Because I think she did a good job as CEO in many respects. I don’t know the details of her compensation package. But she’s one of many advisers that I have.

Q: But she did get a $45 million dollar golden parachute after being fired while 20,000 of her employees were laid off.

McCAIN: I have many of the people, but I do not know the details of what happened.

“How can you not know the details of her past? I mean, that would be awfully important,” Vieira responded.

This is a familiar dodge for McCain, feigning ignorance when challenged with a question that he knows has a terrible answer.

It's getting to be embarrassing for this guy.

When Have Republicans EVER Made It About Issues?

Nobody's surprised by McCain campaign manager and lobbyist Rick Davis' comment, are they?

Rick Davis, campaign manager for John McCain's presidential bid, insisted that the presidential race will be decided more over personalities than issues during an interview with Post editors this morning.

"This election is not about issues," said Davis. "This election is about a composite view of what people take away from these candidates."

There's something that didn't need to be said. Last night's speeches had not one iota of substance in them. They want a character debate and to make the choice between a war hero and a scary Black Muslim. If it were a time of peace and prosperity, maybe that works, but we've had eight years of Mayberry Machiavellis, eight years of issues not mattering in the White House. And we can't afford it any more.

Barack Obama pounced on this today.

"I mean think about it," Obama told the crowd, as per CNN. "John McCain's campaign manager said this election is not going to be about the issues, it's going to be about personalities. That's a quote. He said it's not going to be about -- it's not going to be about issues it's going to be about personalities."

Obama also used Davis' words to pivot to an attack on the GOP convention last night. "Which probably explains why last night, when they were speaking, all these speakers came up -- you did not hear a single word about the economy," He said. "Now, think about it. Not once did people mention the hardships that folks are going through. Not once did they mention what are we going to do about keeping jobs here in Ohio."

It's something to remember through the next couple months.

The Wilmington Factor

I guess the McCain campaign is going to visit lots of grocery stores and paint Obama as a "job-killing machine" to even out the economic gap between the two. It may just work. Since the media largely stays out of policy fights, the facts of the issue, that McCain will continue Bush's war on the middle class while Obama will have concern for working families, will be obscured, and McCain telling shoppers how to stretch their dollar could make him appear to be in touch with ordinary American's struggle.

But there is a way to combat this, with a very powerful and straight-forward narrative, a story that happens to take place in the one swing state McCain absolutely can't lose if he wants a shot at the Presidency.

At a town hall meeting in Portsmouth, Ohio last month, McCain was confronted by a woman about the closure of a DHL air park in Wilmington, Ohio, shuttering 8,600 jobs. McCain talked all sweet to the lady about job retraining and re-education, but basically said that there was nothing he could do to bring those jobs back to Wilmington.



Turns out that McCain's own campaign manager, a registered lobbyist, had a hand in that closure.

Little known to [Wilmington] citizens, McCain and his campaign manager, Rick Davis, played roles in the fate of DHL Express and its Ohio air park as far back as 2003. Back then, however, their actions that helped DHL and its German owner, Deutsche Post World Net, acquire the Wilmington operations resulted in expansion, not retraction.

In a private meeting Thursday, Wilmington residents will ask McCain for help in stopping DHL’s proposal to quit using the airport as a hub, which could cost more than 8,000 jobs. DHL says that it wants to stay in the freight business but that it can stem financial losses if it can put its packages aboard the planes of a rival - United Parcel Service - before delivering them in DHL trucks. UPS flies out of Louisville, Ky., so the proposed change would render the Wilmington airport unnecessary.

None of that was anticipated in 2003, when McCain and Davis, who was a Washington lobbyist before managing the presidential campaign, first got involved. Several Wilmington civic leaders said that what happened in 2003 created an economic gain for their community, lasting several years.

But because that gain, and now the prospective loss, came from the decisions of a foreign-owned corporation, look for some Democrats and labor to seek to tie Wilmington’s current troubles to McCain.

Essentially, Rick Davis brokered a deal to shift DHL's operational control to a foreign corporation, who eventually cut the jobs in a cost-saving maneuver. Local leaders worried in 2003 about the impact of a merger on their community, and within a few years that's exactly what happened. This has become an election-year issue in Ohio.

U.S. Sen. Sherrod Brown, D-Ohio, urged Republican presidential candidate John McCain to press DHL and its German owner, Deutsche Post, to preserve jobs that could be lost if DHL hires United Parcel Service for its U.S. cargo airlift work.

McCain, the Arizona senator, scheduled a campaign stop in Wilmington today, Aug. 7, to meet privately with community activists trying to save at least 8,000 jobs at DHL's Wilmington air freight hub. McCain was also to visit Lima.

Sen. Obama, by the way, met with community leaders in Wilmington a month ago. If I were part of his campaign, the ads about backroom deals to eliminate American jobs and destroy small communities would already be up and running. This perfectly fits the theme of the old ways of Washington, with McCain's lobbyist-infested campaign out of touch with the consequences of the policies he pushes.

It's worth remembering that the election is not about one national campaign monitored by tracking polls, but 51 separate campaigns (the states and DC), all with their own parochial concerns. The Wilmington story will resonate throughout Ohio and probably elsewhere in the industrial Midwest. This is a pretty familiar story. Obama needs to run with it.

Those Pesky Hundreds Of Lobbyists

John W. McCain thought his little lobbyist problem was over when he solemnly announced new standards of conduct for his staff, asked for and received the resignations of a few employees, and jutted out his jaw so that everyone in his media base could see how forthright and scrupulous he was. Surely his barbecue buddies would decide that this was no longer an issue, and any further talk of lobbyists would be off-limits from this point forward.

Except it's not going away. For as I said at the time, for McCain to truly wash his hands of lobbyists he'd have to fire his entire campaign staff, not a few aides on the margins. If he didn't, the ties would remain, like his employment of 7 lobbyists for Airbus, which looks bad in the light of his intervening to get Airbus a lucrative Pentagon contract. One of them, Susan Nelson, is McCain's national finance director, and apparently a lobbying shop was still paying her while she was affiliated with the campaign.

Then there's his chief economic advisor Carly Fiorina, who while the CEO of Hewlett-Packard traded with Iran in violation of an international boycott.

Then there's the big one involving Rick Davis, his campaign manager:

John McCain's presidential campaign is blasting a New York Times report that his campaign manager once worked for a Kremlin-backed politician, and that McCain likely knew of his efforts.

The McCain campaign is strongly denying the paper's reporting that in 2005, a White House National Security Council staffer called John McCain's Senate office to complain that Rick Davis, at the time a GOP lobbyist, was "undercutting American policy on Ukraine" by lobbying for a Kremlin-backed politician, Viktor Yanukovich, the paper reported.

The Bush White House -- and McCain  opposed Yanukovich, whom the United States and others had accused of election fraud, and benefiting from violence and intimidation towards journalists [...]

The story also raises the possibility that Davis may have violated the Foreign Agents Registration Act, a 1938 anti-espionage law requiring all agents of foreign powers to register with the U.S. government and disclose their activities. Davis never filed -- though according to the campaign, of course, he had no reason to do so.

The Times report is a doozy, alleging that Davis worked for Yanukovich without registering as a lobbyist, and that McCain knew about this since 2005. This is leading some reform-minded Democrats to propose a law requiring fuller disclosure of lobbyists who argue for foreign clients. It's a great way to wedge McCain, and Sen. Obama has already signed on to close the loophole that keeps such activities in the dark.

Under current law, Washington lobbyists can hide their dealings with foreign businesses and governments. This bill will close that loophole and establish a new standard for disclosure.

Barack is taking this important stand against powerful interests, but he can't change Washington without our help.

Sign our petition to stand with Barack on Lobbying reform:

http://my.barackobama.com/lobbyistloophole1

While Barack Obama is working to change the culture in Washington, John McCain has turned a blind eye to the lobbyist loophole.

He has to -- his Senior staff includes lobbyists who have used the loophole to hide their foreign clients, and McCain's fundraising strategy relies on huge checks from Washington Lobbyists and special interest PACs.

Barack's campaign is different. He has never accepted contributions from Washington lobbyists or special interest PACs, so Barack is only accountable to ordinary people like me and you.

I don't know about all that, but clearly McCain is accountable to a much higher power. Lobbyists have managed his policy on issues like FISA and more, and they're completely entangled in his camapign apparatus. He deserves to be slammed for this.

More Than Divestment

On the same day that John W. McCain gives a speech to the powerful pro-Israel lobby AIPAC, where he calls for a worldwide divestment effort to isolate Iran, it is revealed that such a divestment would significantly hurt the balance sheets of members of his own campaign:

In the summer of 2005, John McCain's chief strategist Charlie Black, working for his firm Black, Kelly, Scruggs & Healey, was paid $60,000 to lobby the U.S. government on behalf of the Chinese oil conglomerate CNOOC. At the time, CNOOC was mounting an aggressive bid to buy Unocal, a California-based oil giant, and Black was tasked with churning up congressional support. But the bid ultimately fell through, in part because of objections over the China oil industry's ties to Iran, a country in which it had already invested tens of millions of dollars.

"This transaction poses a clear threat to the energy and national security of the United States," wrote Rep. Joe Barton, a Texas Republican. "U.S. national energy security depends on sufficient energy supplies to support U.S. and global economic growth. But those supplies are threatened by China's aggressive tactics to lock up energy supplies around the world that are largely dedicated for their own use." [...]

as demonstrated by the CNOOC anecdote, if choking off Tehran's economic lifeblood is McCain's goal, he could have personally started down that road years ago -- with his own advisers.

This is the second member of McCain's inner circle with lobbying ties to Iran that has been discovered in just the past few days - campaign manager Rick Davis was the first.

Matthew Yglesias notes that this is part of a larger problem with using divestment to deal with most states.

In a highly globalized economy, it's difficult to try to hermetically seal off Iran economically. You start divesting from firms that do business with Iran, but then you still have firms that do business with firms that do business with Iran. Divest all you like, but Iran still has oil that people want to buy, which gives Iranians money they want to use to buy things with. Which isn't to say that economic pressure is totally ineffective, but how effective it is has a lot to do with how wide the network of pressuring entities is. A really global sanctions and divestment campaign can deliver enormous blows, while unilateral measures are difficult to really enforce in a serious way.

Sudan, who has a far more limited economic picture relative to Iran, is easier to isolate, but in the final analysis, nothing beats good old-fashioned multilateral negotiation. We may never sever the economic ties that bind Iran to the globalized world, but we can gain diplomatic strength with a unified position and a broad set of actors willing to make the concessions necessary to reach agreement. If changing the behavior of Iran is the goal, only an international effort in all possible arenas, not just financial sanctions, will be successful. In fact, as Ilan Goldenberg notes, the last time Iran was faced with international consensus against its nuclear program, they actually ran to the bargaining table.

McCain argues that the Clinton Administration already tried engaging in 1998 and that the entreaties were rebuffed. He’s right. Supreme Leader Ali Khamenei vetoed any talks at that time. But McCain is selectively cherry picking history. The story of the last 15 years between Iran and the U.S. is one of missed opportunities on both sides. The best example is from 2003, where right after the start of the Iraq War senior officials in the Iranian Foreign Ministry sent the “Grand Bargain fax” to the Bush Administration outlining what a deal between the U.S. and Iran might look like. The Bush Administration decided not to respond because of its position of strength at the time and the belief that Iranian reformists couldn’t deliver on their promises. In the late 1980s and early 1990s Iran worked to have Hezbollah release all of the American hostages in Lebanon and in exchange expected greater engagement from the United States. But while the first Bush Administration had signaled that it would in fact engage after the 1992 U.S. Presidential elections, when they lost, the Clinton Administration decided instead opt for a dual containment policy. Elements in the Iranian government who had supported engagement with the U.S. ended up feeling spurned. The story is much more complicated than: “the U.S. has tried talking and Iran has refused.”

But that wouldn't look good on a bumper sticker. Certainly not as good as "Bomb bomb bomb Iran."

The Lobbyist Chronicles

As I said earlier, McCain opened up a huge can of worms with his year-too-late "lobbying policy," and now there's going to be a consistent drip, drip, drip for six months. Rick Davis, his campaign manager, is a lobbyist. McCain says he's no longer registered as a lobbyist and so it's OK, but continues to lobby while being unregistered, which is worse. And look at the client list:

But while Mr. Davis took a leave from Davis Manafort in 2006, the company has developed a specialty in recent years in a type of lobbying for which firms do not have to register — namely, representing the interests abroad of foreign politicians and businessmen.

In recent years, the company’s clients have included the richest man in Ukraine and a former premier of that country whose opponents were supported by Mr. McCain. The Washington Post reported in January that Mr. Davis also set up a meeting in Switzerland in 2006 between Mr. McCain and a Russian businessman, who has been barred from entering this country, apparently because of accusations about past ties to organized crime in Russia. That businessman, Oleg Deripaska, has denied such links.

This continued even while Davis was employed as McCain's campaign manager.

Also, it turns out that a lobbying firm was paying members of the McCain staff, which amounts to an illegal corporate contribution.

I am writing to express Campaign Money Watch’s concern that the McCain campaign may have violated federal election law when the Loeffler Group, a Washington lobbying firm, made payments to Susan Nelson, the campaign’s national finance director. It is also possible that either Ms. Nelson or the Loeffler Group may have violated lobbying disclosure law. As you know, the Loeffler Group is led by lobbyist Tom Loeffler, the campaign’s National Finance Chair until this past weekend.

We are concerned that the campaign may have received an illegal corporate contribution from Loeffler’s lobbying firm which sent payments to your chief fundraiser on staff.

That’s why we urge the campaign to immediately and publicly release the facts surrounding Ms. Nelson’s simultaneous compensation by your campaign and the Loeffler Group. This information should include how much Ms. Nelson was paid by the Loeffler Group, as well as what work Ms. Nelson conducted for the Loeffler Group while working full-time for the campaign. If the McCain campaign believes that there are no violations of election or lobbying laws, then this information will prove you correct.

All of this could have been avoided if McCain simply passed the bill he sponsored, which would have banned candidates or candidate's campaign committees from paying registered lobbyists. But he didn't, and now the slimy associations will all come out. The one reason to have lobbyists on the campaign is for the purposes of raising money, but even with them McCain lags far behind Obama on that score. It's just a total disaster.

McCain's Lobbying Problem Goes Mainstream

Ever since John McCain implemented new rules that should have forced him to fire his entire staff, and ended up in him actually firing his convention manager, one of his national finance co-chairs, a regional campaign manager, and a senior aide, there was no way for the press to ignore such a barrage without reporting on it. Not to mention the fact that BarackObama started talking about it as well.

"It appears that John McCain is very much a creature of Washington and one of the things that we've said from the outset of this campaign is that if we're gonna change policies, if we're gonna deliver on universal health care or have an energy policy that over the long term can bring down gas prices that we were gonna have to change how Washington works," Obama told reporters Sunday at an ice cream shop in Milwaukie, Ore. "We can't have special interests dictating what's happening there and that's why I said at the beginning I wouldn't take PAC money and I wouldn't take money from federal lobbyists. And it does appear that over the last several weeks John McCain keeps on having problems with his top advisers being lobbyists, in some cases for foreign governments or other big interests that are doing business in Washington that I don't think represents the kind of change that the American people are looking for."

It's enough of a tie to "old Washington" and the failed policies of the past that McCain's got the least popular President in the history of modern polling coming to raise money for him next week. That alone will dip his poll numbers. But the ubiquity of the lobbyists in his campaign finally breaking out into the open is deadly, because he's carefully cultivated the image of being an independent maverick, and it's being assaulted on all sides.

"It's the biggest anti-Washington streak in the American electorate in decades, and McCain's problem is that his campaign is full of Washington-lobbyist types," said Chris Kofinis, a former John Edwards aide. "You can't be the guy who is striving for reform when the people who run the campaign are fighting against reform."

Democrats have hammered McCain on that very issue for months, noting that campaign manager Rick Davis and senior adviser Charlie Black have spent decades lobbying in Washington. Both have left their companies.

Yes, Davis left the company, but his name's still on the lobbying firm's letterhead, which means they're making money based on his association to McCain. Bad job by the AP there.

McCain isn't going to be able to run from these associations but we're now down to people like Black and Davis who aren't expendable. The information will continue to mount on sites like McCainpedia. And activist online video like this one from Brave New Films will continue to expose the deceptions and undercut the straight talk reform image. And the front-page stories almost write themselves.

McCain To Fire Entire Staff

If he's really going to look into the backgrounds of everyone working for him and fire those who have, er, unsavory lobbying associations, the whole staff has got to go.

One of the questions asks: "Have you ever been a registered lobbyist at either the Federal or State level?" Another asks: "Have you ever been a registered foreign agent? A third asks staff members to list all of their previous lobbying or foreign government clients.

All staff members are required to submit the form to McCain's campaign counsel, Trevor Potter and his staff, for their review.

Employees who lie about their affiliations will be fired. The new conflicts policy prohibits campaign staffers from being "registered lobbyist or foreign agent, or receive compensation for any such activity."

I mean, if this were legitimate, Charlie Black would have to go. I doubt he will. His campaign manager Rick Davis would have to go. That's not going to happen. What's more likely is that a few functionaries, like this guy whose lobbying firm worked for Qatar and Serbia, will be let go, and McCain will go back and boast to the media about how he upholds the strictest ethical standards (even though Obama had these rules in place from Day One), and nobody will bother to bring up the lobbyists still inside the campaign, or that these fired ones were involved with him in the first place.

All McCain has is that independent perception. Once, not if but once, that goes away, he'll be left with nothing. His trying to pre-empt it now means he knows it's a big problem.

...also, the stories that keep coming out detailing the favors he did for wealthy contributors can't be helping, either.

Sen. John McCain secured millions in federal funds for a land acquisition program that provided a windfall for an Arizona developer whose executives were major campaign donors, public records show.

McCain, who has made fighting special-interest projects a centerpiece of his presidential campaign, inserted $14.3 million in a 2003 defense bill to buy land around Luke Air Force Base in a provision sought by SunCor Development, the largest of about 50 landowners near the base. SunCor representatives, upset with a state law that restricted development around Luke, met with McCain's staff to lobby for funding, according to John Ogden, SunCor's president at the time.

The maverick thing is a double-edged sword, because if you envision yourself above politics, yet are the same old politician, these stories are more damaging.

UPDATE: Doesn't this also mean that McCain will have to fire his wife for making all those investments in the Sudanese government?

Filthy Lucre

The McCain campaign is using the Iseman and Maverick story as a fundraising tool. Which is to be expected. But the optics are terrible. The fundraising appeal is attributed to John McCain's campaign manager, Rick Davis. He's a well-connected lobbyist trying to knock down a story about John McCain's relationship with a lobbyist.

-- Rick Davis arranged a cocktail meet and greet with McCain and a Russian businessman, Oleg Deripaska, so controversial that the US has revoked his visa -- at an economic conference in Switzerland. Davis' lobbying firm was trying to secure business with the Russian at the time, while the firm was already representing a competing political interest in Ukraine [...]

-- Mr. Davis, while working with the McCain 2008 campaign, also managed to procure a fat internet services contract from the campaign and kept lobbying for clients whose interests were opposed to McCain's own policy pronouncements.

Not only that, but there's a paragraph in the email that talks about how "objective observers" have dismissed the article as a smear job, and one of those "objective observers" they cite is... Bob Bennett, MCCAIN'S LAWYER in this case!

This is just sloppy pushback, and it doesn't add up.

A couple of things John McCain said at his press conference this morning didn't pass the smell test.

The first was when he said that the then-chairman of the FCC "said that was more than an appropriate" for McCain to have sent a letter to the Commission about a pending matter, one that involved a lobbying client of Vicki Iseman's. Paul Kiel tackles that one at TPMmuckraker.

The other comment from McCain that rang as false was when he said that he had not tried to get The Times to spike the story. He personally may not have, but his campaign staff certainly did, according to a number of reports, including the latest from The New Republic.

As a look at how the McCain camp responds in a crisis, well, it's a pretty good indicator. The right is rallying around them and trying to frame the story as "all about sex" and a spawn of the hated liberal machine as personified by the New York Times. Neither are true. But maybe he'll solidify the right but that was bound to happen. It's just a bloody shirt to wave so they can delude themselves into thinking that they don't have substantive disagreements with McCain. The point here, however, is that the bloom among independents, of this straight-talking maverick, is coming off the rose.