As I noted in an earlier post, James Johnson, one of the men leading the vice-presidential search team for Barack Obama's campaign, currently finds himself the subject of a bit of controversy.
You can see the previous post for the full story, but to sum up: Johnson, the former CEO of the Federal National Mortgage Association, is friendly with Angelo Mozilo, the CEO of Countrywide Financial Corp., which is one of the big players in the story of the subprime mortgage crisis. Because of that relationship, and a special informal program Countrywide ran for Mozilo's friends, Johnson may have gotten some loans at favorable terms from the company, though there's no way to be sure without knowing private information from Johnson. What is certain is that Johnson got more than $7 million worth of loans from Countrywide.
There's nothing illegal or improper about this, but given the public concern over the subprime crisis, the image of Countrywide as a villain and Obama's specific criticism of Countrywide and Mozilo, this has become an issue. And John McCain's campaign -- as well as the Republican establishment at large -- is making hay out of it while it can.
It took a while, and some prodding from reporters, but the Obama camp has finally responded to the story.
In his response, Obama spokesman Tommy Vietor said, "It's the height of hypocrisy for the McCain campaign to try and make this an issue when John Green, one of John McCain's top advisors, lobbied for Ameriquest, which was one of the nation's largest subprime lenders and a key player in the mortgage crisis. As President, Senator Obama will crack down on fraudulent lenders and bring real relief to Americans struggling in the grip of the housing crisis -- the kind of change that works for the American people."
The Obama camp also distributed talking points on the issue to campaign surrogates, which were obtained by Time's Mark Halperin. Here are the full, unedited talking points:
This story is overblown and irrelevant
This an overblown story about what appear to be completely above-board transactions. The Wall Street Journal even admits that they don't have a story -- noting that it's "impossible" to know the factors that went into these arrangements.
And look, one of John McCain's top advisors, John Green, lobbied for Ameriquest, one of the nation's largest subprime lenders and a key player in the mortgage crisis. What does it say about Senator McCain's campaign that they've selected someone who's lobbied for a subprime lender to serve as their full-time liaison to Republicans in Congress?
Americans know that we face a critical choice in this race -- and isn't about the terms of an outside advisor's loans. This race is about leadership, and which candidate will crack down on fraudulent lenders and bring real relief to Americans struggling in the grip of the housing crisis.
Barack Obama has offered a real solution to the housing crisis -- John McCain hasn't.
Barack Obama understands what homeowners are going through, and he's put forward a detailed proposal to crack down on fraudulent lenders and help folks stay in their homes. As President, he'll penalize predatory lenders and create a $10 billion Foreclosure Prevention Fund to help families stay in their homes. And among other steps, he'll give a tax credit to middle class homeowners that would cover 10 percent of the interest on their mortgages every year.
Meanwhile, John McCain has struggled for months to come up with a real plan to address the housing crisis. It took him three tries to come up with answers for struggling homeowners, and he still came up short. And when he laid out his economic agenda recently he couldn't be bothered to talk about the housing crisis.