Former Fannie Mae Chairman James Johnson said today he has quit Sen. Barack Obama’s vice-presidential search team after the Wall Street Journal reported he may have received sweetheart loans from Countrywide Financial Corp.
Johnson, 64, said he had done nothing wrong, but left to avoid becoming a hindrance to Obama, the presumptive Democratic nominee.
“I would not dream of being a party to distracting attention from that historic effort,” Johnson said in a statement. “I believe Barack Obama’s candidacy for president of the United States is the most exciting and important of my lifetime.”
Obama appointed Johnson last week to a three-member team to vet possible running mates. But the longtime Washington inside became a lightning rod for criticism after the Journal reported last weekend that he had been the recipient of at least five real-estate loans totaling $7 million from financially beleaguered Countrywide Financial, as a friend of chief executive Angelo R. Mozilo.
At least two of the mortgages were at rates below market averages, though the Journal wrote that is difficult to predict a market rate without access to nonpublic information about a borrower’s credit history.
Johnson, who vetted vice-presidential nominees for John Kerry in 2004 and Walter Mondale in 1984, was the chief executive of Fannie Mae from 1991 to 1998. The government-sponsored shareholder-owned company is the biggest buyer of Countrywide’s mortgages.
Johnson’s ties to Mozilo became a campaign issue after Republicans pointed out that Obama had been critical of the mortgage lender in campaign speeches.
During his years at Fannie Mae, Johnson reportedly worked closely with Mozilo - naming him chairman of Fannie Mae’s national advisory council in 1996. An American Banker article in 1999 said the two men had a “close friendship.’”
Criticism mounted after the New York Times reported today that Johnson was involved in several controversial executive compensation decisions, serving on the boards of five companies that granted lavish pay packages to their executives - and, in some cases playing a key role in approving them.
One of the better-known cases involved UnitedHealth Group, a Minnesota company, where Johnson was a board member and later headed the compensation committee, according to Times reporter Leslie Wayne. The company came under fire after chief executive William McGuire was granted more than $1.4 billion in stock options - some $618 million of which was returned as a result of settlements with federal regulators and shareholders.
McGuire resigned, but kept $800 million from the package.
That and cases like it led Obama to introduce legislation last year that would give shareholders an advisory role in executive compensation packages. The measure, called “Say on Pay,” passed the House and is still pending in the Senate.
Johnson was also criticized by oversight groups for the number of corporate boards on which he served while holding a full-time position at Fannie Mae. Besides United Health, he was a director of Goldman Sachs, KB Homes, the Gannett Corporation, Temple Inland and Target.
Johnson said in his statement today that he had done nothing wrong, saying “blatantly false statements and misrepresentations” were written about him.
“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 an e-mailed statement.
Obama said he is “confident” his vice presidential search process will produce “a number of highly qualified candidates” in coming weeks.
The remaining members of the vetting team are Caroline Kennedy, daughter of the late President John F. Kennedy Jr., and former deputy U.S. Attorney General Eric Holder.
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2 Comments
#1. PacificGatePost 06.11.2008
POPPY FIELDS OF MASS DESTRUCTION —- TIME TO AWAKEN
The beautiful and delicate poppy that now paints the landscapes of Afghanistan with vibrant colors, has long been the symbol for sacrifice. The aesthetic is as soothing to the sense of sight, as it is exasperating to the conscience.
http://pacificgatepost.blogspot.com/2008/04/poppy-fields-of-mass-destruction.html
Drastic action is required.
#2. Carlos 06.11.2008
What does your comment have to do with this story?
Poppy fields?
We are reading/discussing the vetting of VP candidates here…
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