Mortgage giants paid McCain aide

Rick Davis (AFP Photo / Justin Sullivan)
A top McCain aide received over $US 30,000 a month for five years from top mortgage companies Fannie Mae and Freddie Mac, according to current and former executives.

Rick Davis, John McCain's campaign manager and adviser, worked as head of an advocacy group for the mortgage companies set up to battle tougher regulation of their operations, it was reported Monday in the International Herald Tribune.

In light of the current financial crisis, McCain and Democrat candidate Barack Obama have taken turns calling for stricter regulation. While McCain and Obama have financial ties to the company, McCain has upped the ante by accusing Obama in an advertisement of taking advice directly from the former CEO of Fannie Mae, Franklin Raines. Both parties have denied any such relationship.

Recently, several current and former executives have come forward to describe what Davis did to defend the company against tougher regulation while he was president of the advocacy group, the Homeownership Alliance.

Democrats and Republicans, although on the condition of anonymity, have verified Davis' roll in the matter. “The value 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 former spokesman for Fannie Mae, Robert McCarlson. “Davis really didn't do anything,” added McCarlson a democrat who worked for Fannie Mae from 2000 to 2002.

In a recent interview on CNBC, McCain said that Davis was no longer employed by the mortgage companies. He added that during Davis tenure with the Alliance, he [McCain] had supported legislation to oversee the companies accounting and executive compensation.

However, the legislation did not seek to change their unusual status as a federally supported private company. In addition, many current and former executives say the Homeownership Alliance was set up simply to promote the interests of Fannie Mae and Freddie Mac in the housing market.  “We thought it would be helpful to have someone who was a broadly recognized Republican to be the face of the organization, and that person became Rick Davis,” said former industry relations head William Maloni.

In late 2005, after an investigation of the mortgage companies, the Alliance ceased operations after the companies decided it was no longer needed.