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Linking Obama to Ex-Fannie Mae Chief Is a Stretch

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Saturday, September 20, 2008

"Obama has no background in economics. Who advises him? The Post says it's Franklin Raines, for 'advice on mortgage and housing policy.' Shocking. Under Raines, Fannie Mae committed 'extensive financial fraud.' Raines made millions. Fannie Mae collapsed. Taxpayers? Stuck with the bill."

McCain campaign video release,

Sept. 18

An already nasty presidential election campaign is getting nastier. The meltdown on Wall Street has touched off frantic attempts by both the McCain and Obama camps to secure political advantage and indulge in guilt by association. Over the past 24 hours, both campaigns have issued what are, in effect, video news releases attempting to show that the other side's "advisers" are somehow responsible for the crisis. The latest McCain attack is particularly dubious.

THE FACTS

The McCain video attempts to link Obama to Franklin D. Raines, the former chief executive of the bankrupt mortgage giant, Fannie Mae. It then shows a photograph of an elderly female taxpayer who has supposedly been "stuck with the bill" as a result of the "extensive financial fraud" at Fannie Mae.

The Obama campaign issued a statement by Raines on Thursday night insisting, "I am not an advisor to Barack Obama, nor have I provided his campaign with advice on housing or economic matters." Obama spokesman Bill Burton went a little further, saying in an e-mail that the campaign had "neither sought nor received" advice from Raines "on any matter."

So what evidence does the McCain campaign have for the supposed Obama-Raines connection? It is pretty flimsy, but it is not made up completely out of whole cloth. McCain spokesman Brian Rogers points to three items in the Washington Post in July and August. It turns out that the three items (including an editorial) all rely on the same single conversation, between Raines and a Washington Post business reporter, Anita Huslin, who wrote a profile of the discredited Fannie Mae boss that appeared July 16. The profile reported that Raines, who retired from Fannie Mae four years ago, had "taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters."

Since this has now become a campaign issue, I asked Huslin to provide the exact circumstances of that passage. She said that she was chatting with Raines during the photo shoot, and asked "if he was engaged at all with the Democrats' quest for the White House. He said that he had gotten a couple of calls from the Obama campaign. I asked him about what, and he said, 'Oh, general housing, economy issues.' ('Not mortgage/foreclosure meltdown or Fannie-specific?' I asked, and he said 'no.')"

By Raines's own account, he took a couple of calls from someone on the Obama campaign, and he or she had general discussions about economic issues. I have asked both Raines and the Obama people for more details on these calls.

THE PINOCCHIO TEST

The McCain campaign is clearly exaggerating wildly in attempting to depict Raines as a close adviser to Obama on "housing and mortgage policy." If we are to believe Raines, he did have a couple of telephone conversations with someone in the Obama campaign. But that hardly makes him an adviser to the candidate himself -- and certainly not in the way depicted in the McCain video release.

ONE PINOCCHIO: Some shading of the facts; TWO PINOCCHIOS: Significant omissions or exaggerations; THREE PINOCCHIOS: Significant factual errors; FOUR PINOCCHIOS: Real whoppers; THE GEPPETTO CHECK MARK: Statements and claims contain the truth, the whole truth and nothing but the truth.


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