Leader of Obama's VP Search Team Quits

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Obama VP Vetter Resigns Over Loan Criticism

Jim Johnson, a manager of Democrat Barack Obama's vice presidential search team, is resigning amid criticism over his personal loan deals. Obama's campaign declined to say if Johnson would be replaced.

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"We don't need any lectures from a campaign that waited 15 months to purge the lobbyists from their staff, and only did so because they said it was a 'perception problem,' " Obama spokesman Bill Burton said.

To Republicans, and even some Democrats, Johnson undermined Obama's claim to be an outsider, untainted by the cozy relationships that envelop Washingtonians. Johnson's personal baggage, critics said, called into question his capacity to recognize political vulnerabilities in potential Democratic running mates and Obama's judgment in entrusting him with the task.

Excessive pay for corporate executives has become an easy target for politicians, including Obama, and federal regulators were sharply critical of Johnson's $1.9 million bonus for 1998. The bonus was based on alleged earnings manipulations at Fannie Mae that the Securities and Exchange Commission found to be fraudulent. Though Johnson was not accused of participating in the accounting manipulations, he did not return any of the money.

In a statement provided to Bloomberg News, Johnson said he had done nothing wrong, and he dismissed recent reports as a litany of "blatantly false statements and misrepresentations." But he wanted to avoid potentially damaging Obama, he said.

Johnson, who was an executive assistant to Vice President Walter F. Mondale and a chairman of the Kennedy Center Board, has been seeking a return to government for years. In 2004, he had hoped a Kerry victory would make him White House chief of staff or Treasury secretary, former Kerry campaign aides said yesterday, and he had similar ambitions with Obama.

"It's probably a great example of how you deal with a misfortune. You move quickly," said Peter D. Hart, a Democratic pollster. "By next Monday, or even Friday, it's nowhere."

Staff writers Perry Bacon Jr., David Hilzenrath and Shailagh Murray contributed to this report.