Ever since Barack Obama chose former Fannie Mae CEO Jim Johnson to vet potential vice presidential choices, critics have questioned Johnson’s ties to Countrywide Financial Corporation, a mortgage lender that gave Johnson millions in below-market loans.
The Obama campaign issued a vehement statement Monday calling questions about Johnson’s loans “overblown and irrelevant.”
Obama’s GOP opposition, however, is showing no tolerance for Johnson’s role in Obama’s campaign and is eagerly tying the scandal to Obama’s disgraced landlord friend, Tony Rezko. While Obama was kicking off a two-week battleground state economy tour in Raleigh, North Carolina on Monday, the Republican National Committee was busy blasting out emails to reporters with “Obama’s Hypocrisy on Housing” in the subject line. Dueling statements from RNC spokesman Alex Conat said “It takes a lot of nerve for Barack Obama to stand before voters, speak to the rising costs hurting families, attack his opponent on the housing crisis, and completely ignore the fact that both he and his campaign leadership have enjoyed housing deals that no average North Carolinian would be able to access” and “His campaign’s suggestion that controversy surrounding his senior adviser’s favorable loans is ‘overblown’ is out-of-touch, but it’s what we’ve come to expect from a candidate who lives in a multi-million dollar house thanks to Tony Rezko.”
(Rezko, a former Chicago-based fundraiser for Obama, was convicted on 16 of 24 counts of corruption last Friday.)
Johnson, a former Obama campaign “bundler,” was selected by the Obama campaign to be a member of a three-person team to vet Obama’s vice-presidential short list with Caroline Kennedy Shlossberg and former Attorney General Eric Holder last week.
Since then, a spate of new stories have been published criticizing Johnson because he secured $7 million in loans through Countrywide largely because of his close relationship with Countywide Chief Executive Angelo Mozilo. The Wall Street Journal published a story Saturday that said: “Countrywide Financial Corp. makes mortgage loans through a vast network of offices, brokers and call centers. But a few customers have gotten their loans a special way: through Countrywide Chief Executive Angelo Mozilo ... One was James Johnson, a longtime Democratic Party power and an adviser to Sen. Barack Obama's campaign, who this past week was named to a panel that is vetting running-mate possibilities for the presumed nominee.”
Complicating the issue for Obama is the fact that he has attacked the housing industry for granting too many irresponsible loans, much like the ones Johnson secured. Obama specifically singled out Countrywide in Lancaster, Pennsylvania by saying, “These are the people who are responsible for infecting the economy and helping to create a home foreclosure crisis.”
Rather than defend or denounce Johnson in their statement, the Obama campaign sought to tamp down the importance of the story. “Americans know we face a critical choice in this race—and isn’t [sic] about the terms of an outside advisor’s loans,” it said. “This race is about leadership and which candidate will crack down on fraudulent lenders and bring real relief to American struggling in the grip of the housing crisis.”
The statement also reiterated Obama’s support for a $10 billion “Foreclosure Prevention Fund” to provide federal aid for homeowners who can’t make their house payments.