Ed.note:and so it seems that the roaches are scattering after the lights been turned on.check out the earlier article(obama adviser's many connections) about this "v.p. vetter" i put up
By Nick Juliano | Uncategorized | Wednesday, 11 June 2008
Jim Johnson, who had volunteered to vet potential running mate picks for Democratic candidate Barack Obama, resigned Wednesday, the campaign said.
“Jim did not want to distract in any way from the very important task of gathering information about my vice presidential nominee, so he has made a decision to step aside that I accept,” Obama said in a statement released Wednesday afternoon. “We have a very good selection process underway, and I am confident that it will produce a number of highly qualified candidates for me to choose from in the weeks ahead. I remain grateful to Jim for his service and his efforts in this process.”
Johnson was criticized for benefits he received while leading Fannie Mae that may have come from subprime mortages.
Republicans sought to paint Obama as a hypocrite and undercut his image as a voice for change by criticizing Johnson, a former CEO of lender Fannie Mae and DC insider since the 70s.
The Washington Post reported Wednesday:
For Republicans seeking to tarnish Obama’s image as a squeaky-clean outsider hoping to clean up Washington — not to mention divert attention from questions about lobbyists working in Sen. John McCain’s campaign — Obama’s embrace of Johnson has been a gift.
“He’s tagged himself as a different kind of politician,” said Republican strategist Mark Corallo. “He’s supposed to transcend party, transcend politics. He’s exploited that more than anyone in recent memory, and it becomes demoralizing to all the starry-eyed Obamaphiles who are saying, ‘I thought he was different.’ ”
The questions about Johnson began after the Wall Street Journal reported Saturday that he received more than $2 million in home loans that might have been below average market rates from Countrywide Financial, a partner of Fannie Mae and a leading purveyor of the kind of subprime mortgages that spawned a national housing crisis.
Obama had tried to downplay questions about Johnson’s previous dealings earlier this week, saying Tuesday that he would not “vet the vetters.” Johnson led John Kerry’s VP search in 2004 and had volunteered to serve the Obama campaign in the same capacity.
The Post sums up Johnson’s involvement with Fannie Mae and the mortgage crisis:
As CEO of Fannie Mae, Johnson, a former chief of staff to Vice President Walter F. Mondale and chairman of the board of the Kennedy Center, was the beneficiary of accounting in which Fannie Mae’s earnings were manipulated so that executives could earn larger bonuses. The accounting manipulation for 1998 resulted in the maximum payouts to Fannie Mae’s senior executives — $1.9 million in Johnson’s case — when the company’s performance that year would have otherwise resulted in no bonuses at all, according to reports in 2004 and 2006 by the Office of Federal Housing Enterprise Oversight.
In a 2006 civil enforcement action against Fannie Mae, another agency, the Securities and Exchange Commission, called the company’s 1998 accounting “fraudulent” and said numbers were “intentionally manipulated to trigger management bonuses.”
Johnson left the company before it was swept up in an accounting scandal that tarred its reputation, but even during the years of scandal, Johnson was reaping hundreds of thousands of dollars in consulting fees and other compensation, $3.3 million in all between 2001 and 2006.
Brian Brooks, an attorney for Johnson, said last night that the accounting issues at Fannie Mae were thoroughly investigated, and that “no one has ever suggested that Mr. Johnson was responsible for the accounting decisions at issue, nor has he had any involvement with these accounting issues during his tenure as a consultant since leaving employment with the company in 1999.”
There was no immediate word from the Obama campaign as to who would replace Johnson in evaluating potential running mates.