McCain aide's firm being paid by Freddie Mac

John McCain said Sunday that his campaign manager hasn't been involved with the company for several years, but the aide's firm is only now being removed from the payroll.

Published September 24, 2008 2:10PM (EDT)

Well, now we know why John McCain's campaign has been attacking the messenger particularly hard lately.

The McCain camp responded angrily to previous reports about the campaign's ties to Fannie Mae and Freddie Mac, two of the companies at the center of the country's economic woes. A story in the New York Times prompted Steve Schmidt, a senior advisor to McCain, to say, "Whatever the New York Times once was, it is today not by any standard a journalistic organization. It is a pro-Obama advocacy organization."

The campaign has also worked to deny any ongoing ties between campaign manager Rick Davis and Freddie Mac. McCain himself said Sunday that Davis "has had nothing to do with it since [2005], and I'll be glad to have his record examined by anybody who wants to look at it."

Now it turns out that McCain's claim just isn't true. In fact, Davis' firm, Davis & Manafort, has been on Freddie's payroll for the past two years, and is only now being removed, after the federal government's takeover of the company.

The New York Times' Jackie Calmes and David D. Kirkpatrick report:

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 ...

They said they did not recall Mr. Davis's doing much substantive work for the company in return for the money, other than speak to a political action committee of high-ranking employees in October 2006 on the approaching midterm Congressional elections. They said Mr. Davis's firm, Davis & Manafort, had been kept on the payroll because of Mr. Davis's close ties to Mr. McCain, the Republican presidential nominee, who by 2006 was widely expected to run again for the White House.

Mr. Davis took a leave from Davis & Manafort for the presidential campaign, but as a partner and equity-holder continues to benefit from its income. No one at Davis & Manafort other than Mr. Davis was involved in efforts on Freddie Mac's behalf, the people familiar with the arrangement said.

Two other outlets, Roll Call and Newsweek, also have the story.

Watching the reaction to the report has been interesting. Blogs on the right have been all but ignoring the story. Those that are covering it are following the McCain camp's lead and -- surprise -- blaming the messenger. A campaign statement attacks the Times, comparing it to the left-leaning Huffington Post:

Today the New York Times launched its latest attack on this campaign in its capacity as an Obama advocacy organization. Let us be clear about what this story alleges: The New York Times charges that McCain-Palin 2008 campaign manager Rick Davis was paid by Freddie Mac until last month, contrary to previous reporting, as well as statements by this campaign and by Mr. Davis himself.

In fact, the allegation is demonstrably false. As has been previously reported, Mr. Davis separated from his consulting firm, Davis Manafort, in 2006. As has been previously reported, Mr. Davis has seen no income from Davis Manafort since 2006. Zero ...

Further, and missing from the Times' reporting, Mr. Davis has never -- never -- been a lobbyist for either Fannie Mae or Freddie Mac. Mr. Davis has not served as a registered lobbyist since 2005 ...

[T]his "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 ...

[O]ur nation has a long and proud tradition of news organizations that are ideological and partisan in nature, the Huffington Post and the New York Times being two such publications. We celebrate their contribution to the political fabric of America. But while the Huffington Post is utterly transparent, the New York Times obscures its true intentions -- to undermine the candidacy of John McCain and boost the candidacy of Barack Obama -- under the cloak of objective journalism.

Much of the statement is, frankly, ridiculous. For one, it sets up a straw man -- contrary to what the McCain camp claims, the Times never says Davis was personally paid by Freddie Mac. It says that his company was, and that though he may not currently be paid by it, "as a partner and equity-holder [he] continues to benefit from its income." And the story makes it clear that Davis was not a lobbyist for the company; in fact, one of the issues the Times discusses is that he seems to have done almost no work for the money his company was paid.

Also, the McCain camp clearly wants to make this a fight about the Times and perceived media bias. It's a blatant distraction maneuver, especially since there were two other outlets with the story.

By Alex Koppelman

Alex Koppelman is a staff writer for Salon.

MORE FROM Alex Koppelman

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2008 Elections John Mccain R-ariz.