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Reports: Freddie Mac paid lobbying firm owned by McCain manager

COMBINED NEWS SERVICES

September 24, 2008

WASHINGTON - Freddie Mac, one of the giant mortgage companies at the crux of the credit crisis, continued to pay a lobbying firm owned by John McCain's campaign manager up to and including last month, it emerged last night.

According to news reports, Freddie Mac paid $15,000 a month from the end of 2005 through last month to Davis & Manafort, a firm owned by McCain campaign manager Rick Davis. The disclosure would appear to undercut a statement by McCain as recently as Sunday night that Davis had no involvement with the mortgage giant for the last several years.

Davis' firm received the payments from Freddie Mac until it was taken over by the government this month along with Fannie Mae, people with knowledge of the arrangement told The New York Times. The total paid to the Davis firm since 2006 amounts to at least $345,000, Newsweek reported on its Web site. Freddie Mac had previously paid an advocacy group run by Davis, called the Homeownership Alliance, $30,000 a month until the end 2005, when that group was dissolved, Newsweek reported.

People familiar with the arrangement told the Times Davis' firm had been kept on the payroll because of Mr. Davis' close ties to McCain. Davis took leave from his firm for the presidential campaign, but as a partner and equity-holder continues to benefit from its income, the Times reported. A Freddie Mac spokeswoman declined to comment.

Jill Hazelbaker, a spokeswoman for the McCain campaign, did not dispute the payments to Davis' firm, but said Davis had stopped taking a salary from his firm by the end of 2006 and that his work did not affect McCain.

"Senator McCain's positions on policy matters are based upon what he believes to be in the public interest," she said in a written statement.

The development comes as McCain and Barack Obama joust over ties to lobbyists and special interests and vie for advantage in a campaign being reshaped by the financial crisis and the plan to bail out investment firms.