Update: Obama severs his Countrywide connection

Breaking news from the Associated Press: The Obama campaign has just announced that Jim Johnson, who received special loans from Countrywide under a "friends of Angelo" (Mozilo) program, has quit the campaign. From the A.P.: "A leader of Democrat Barack Obama's vice presidential research team has resigned amid criticism over his personal loan deals.  Obama announced in a statement Wednesday that Jim Johnson was stepping aside to avoid distracting from the vetting process."

My colleague Andy Malcolm is all over the story at Top of the Ticket.

Obama had defended his selection of Johnson yesterday, pointing out that Johnson was an unpaid volunteer. But his defense, according to the influential Dan Balz of the Washington Post, raised more questions about Johnson's role. Balz wrote "for Obama to suggest that Johnson is floating in some outer orbit of his campaign raises questions about the candidate's willingness to deal forthrightly with controversy."

The Wall Street Journal broke this story over the weekend and I linked to it because I thought it was important. For that I received all manner of negative feedback from supporters of Obama.  So I'm hereby inviting my good friends in the Obama camp to weigh in again. Come on back, folks.

Mike wrote, "The author of this should be fired. What horrible journalism." Mike?

Paul Hiller wrote, "This is a cheap shot ... show me some proof before you make allegations that this is a sweetheart deal" Paul?

Zooey wrote,  "Do your homework Mr. Viles, lest you further erode the Los Angeles Times journalistic reputation..." Zooey?

Ruri wrote, "The only news sources pushing this smear have been Murdoch mouthpieces: The Sun, the WSJ, and Fox news." Ruri?

Ben wrote, "...  this is a pathetic story. Friend of a friend took some big real estate loans at low rates? Boo, author." Ben?

Christopher Robin wrote, "This blog is typical vapor news from the mouthpieces of the repugs. Please dig deeper and make a more convincing case next time. A second grader could have done this well! (Sorry to insult the second grader, but what passes as journalism these days is a very low bar.)" Chris?

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Associated Press

Comments

[mike]

WHAT THE F.... KIND OF A RATE DOES A FRIENDS OF MOZILLO LOAN GET

[CD]

Why can't we get Richardson ? If Jim Johnson gets the boot because of his connections and behavior why not Richardson who is a very little fish in the pond. I am sure we are going to find more political figures with both hands in the Banking/RE cookie jar

[Duke Of Moral Hazard]

CD: it's in the works. Richardson now must explain why she has not just 3 houses, but......... 4 now (more?). Apparently she has another one in Folsom as well (with her mysterious "Daniel")

[tew]

The partisanship seems to be among those whose replies Peter quoted. It doesn't seem to me that Peter is partisan. There should be plenty of dirt on both sides of the aisle - just wait, there will be dirt on Republicans. I trust Peter will report it here.

[Bill Foote]

OK, Peter, I'm an Obama supporter and I'll make a comment...

Deciding to ask for his resignation is a political decision, and not some sort of admission of guilt. In other words, Obama's defense of his decision to have him on the VP selection committee and his decision to (presumably) ask for his resignation do not in any way contradict. What he said about there being no conflict is still entirely valid.

However, giving the fallout, asking him to resign is probably a wise political move, too. Part of that fallout is, well, blogs like yours.

"Pick your battles" - just because something is unpopular doesn't mean it's wrong, but if the substance is unimportant, the right political move can be to go with popularity. That's just being realistic.

[J.W.]

Many of the Obama supporters are like "little children with stars in their eyes". They don't want to hear the truth that Obama is just another empty-suit politician who will say anything to get elected. Al Gore these same types of followers. I am a strong believer in putting the info on the table for everyone to see. This is not a frigging poker game.

[yours truly, Johnny Dollar]

Why look surprised? Obama is the mob.

[the problemwithcaring]

This blog is slowly and PAINFULLY jumping the shark. Please, come back to us.

Nothing changed when Johnson stepped down about your lack of reporting, information mediation, journalism - or whatever you want to call what you are doing here in this blog.

You linked to the story, saying it was important but have yet to provide one bit of information on WHY you Pete Viles thought it was important. Or in anyway relevant to the real estate market - and please don't say 'cause John McCain and the WSJ told you it was.

[J.W.]

To problemwithcaring: Are you an idiot? Do you know who Johnson is? Didn't you read the info that he got a below market rate loan on an expensive home form Countrywide? No.............you only read what you perceived to be an attack on your darling child, Obama.
Peter............keep up the GREAT work and ignore these Obama sheep.

[Brian]

Wow -- they won't give up! I guess if you drink the Kool-Aid, it changes your brain patterns. If you write anything that doesn't imply instant beatification, you are an unprincipled hack journalist Fox news lackey. Come on Peter, admit it. Rupert Murdoch called you and told you to write this, didn't he?

Although, maybe I shouldn't write about Kool-Aid, cults and Jim Jones -- excuse me, Jim Johnson...

[CD]

We better start looking in Angelo's little black book and see who his friends are. We may be surprised to see they are on both side of the aisles . So Richardson has a fourth house, that woman is busy !!!!!
Obama is fair game, he is running for President , he is a big boy, he knows what that means......The dirt will be flying around until next November.....Bush is in Europe discussing which country to invade next.....That worries me a bit....So much news, so little time........

[MyLessThanPrimeBeef]

Problemwithcaring, who the next president is is important, even in immunized LA metro market. So, I think there is a place in LALand for that.

But I am not here to defend Peter who only this morning ridiculed those of us who are celebrity-addiction free. I mean, if I wanted to, I could say this is like Terry Gilliam's Brazil where one dead fly causing a misprint on a typewriter started all the trouble for the poor guy and here we have Peter's 'Obama's countrywide connection,' which would be lauded by his supporters (small 'c') but an unintended 'shift' key led to 'Obama's Countrywide connection' (capital C).

No, I won't do that. Not when a post I submitted is still missing, thanks to Big Brother.

[LA]

Yea, Pete, for going where others fear to tread. Unfortunately, being out in front of the media pack makes you a clearer target, and there are always gonna be people taking the easy shot.

Here's why this story is about the real estate market. The mortgage debacle and the state of real estate are inextricably intertwined. Those of us who will be forced to pay for bail-outs, overt and covert, want to know why. And some of us believe in objective lending standards and not sweetheart dealing when it comes to creditworthiness and the lack thereof.

I don't know if Jim Johnson's a good guy or not. But I get real curious when people of rank and privilege are benefitting and there's a possibility it's at the public's expense.

Let's ask the hard questions and stop taking sides before we even have the facts. Like Dr. Phil says, "People who have nothing to hide, hide nothing."

[Laker]

Barak Husein Obama is inexperienced. He lacks knowledge, and even his suggestions and ideas smell huge problem for US economy.
McCain is old, and not perfect, but at least the man has experience and his ideas seem logical.
I say even if you don't like him, or think he is the best look for the alternative...
McCain is the "least worst"

[Duke Of Moral Hazard]

Oh yeah! The guy occupying the position of President of the United States... totally forgot about him. Where they hidin' him away? Little cabana in Dubai? Haven't even heard much from the Penguin either aside from his brief peeks at the inner workings of his family.

Milla... haven't heard from her for days. Milla, just wave if you're still out there.

Sheeple. I love that word. Sheeple. Sheeple, come for your fleecing. Baaaaaaa.

As long as we're on the topic of Obama's people -- This Jason Furman who's been chosen as economic advisor. How come he had a wikipedia entry, and now he doesn't and the wikipedia log doesn't have a record of the page that was there like it should (google cache does though).
Hmmmm?

And why is Johnson adamant that he is proud of his work at Fannie Mae? Is he proud like in the same way his bud Angelo was proud of the way he helped so many homeowner's realize their dream? (I'm convinced, though, that Angelo drank his own Kool-Aid on this subject during the early years).

[Dan Downtown Dweller]

You may think this is biased but go ahead and read it anyway and you will see why folks are disapointed with the lack of complete information in this blog:

http://www.huffingtonpost.com/david-fiderer/
how-the-wall-street-journ_b_106600.html

[l.a.guy]

"Deciding to ask for his resignation is a political decision, and not some sort of admission of guilt."

So far as we know there's nothing to be guilty of. I don't think anyone suggested it was criminal, just hypocritical.

As an Independent I find this behavior by a Democratic operative to be the equivalent of Spitzer going after prostitutes while being an enthusiastic customer. The Democratic party likes to position itself as the party looking out for the little guy. The actions of a high profile party member like Johnson certainly undermines that message. Obama was smart to cut him loose.

All it really proves is most politicians are just as greedy and opportunistic as the people they purport to be protecting us from.

[Big Brother]

Trust your leaders.

Have Faith.

Work Hard.

Have Faith.

Trust Me.

I Believe in change.

Trust.

Consume.

We only have your best interests in mind.
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I'm watching you.

[Doug]

Seems to me this has a much, much larger impact on the average American: http://www.bizjournals.com/phoenix/
stories/2008/05/26/daily15.html

U.S. Sen. John McCain's presidential campaign faces questions regarding a top economic adviser's work for Swiss banking giant UBS Warburg. Economist and former U.S. Sen. Phil Gramm is vice chairman of UBS Investment Bank and has lobbied Congress on the company's behalf. UBS has been hit hard by the U.S. housing and mortgage meltdowns. The investment banking and mortgage industry has lobbied for less regulation in past years and is worried about potential federal actions to address the housing subprime bust. Arizona is one of the hot spots for the slow housing market and problems with subprime mortgages. McCain counts Gramm as one of his top economic advisers. Gramm advocates tax cuts, supply-side economics and less government regulation.

Googled this in 5 seconds. Funny, when I searched LA Times using the word "Gramm," I get a post about "Hillary's Sub-prime Connection" from LA Land Blog. Gee, no bias there, Pete.

[KungFuGrip]

Regardless of whether these were "sweetheart" loans, isn't this a conflict of interest? Fannie Mae is buying Countrywide loans and the CEOs are using Countrywide for their personal loans. And the board doesn't even know about it. Huh?? The Huff Post article doesn't even address this, of course. Oh, and when I went to that article there was a Countrywide ad at the bottom, no joke -- you can't say they don't know who their friends are!

[Milla]

...waving to Billy...

[Inland Empire]

Looks to me like there was no there there what did Mr. Johnson do that was wrong I still have no idea. This is taken from the Wall Street article..
"A comparison of the Fannie Mae officers' terms with interest rates prevailing when they got their loans raises the possibility Countrywide gave them preferential terms. But it's impossible to tell for sure from public documents. An array of other factors also can account for lower-than-average rates, including a borrower's income, total assets and credit score; how big the loan is compared with the home's value; and how many "points" a borrower may have paid upfront in order to get a lower rate

[MyLessThanPrimeBeef]

Inland Empire, at this point, it would be better to say while an array of factors could explain it, they are not it; otherwise, the question becomes, why didn't he stand up for the innocent? Why did he jettison his people?

[Gromit]

Although I'll bet McCain has some issues with "big lenders," too (and I'm not even including the Keating Five issue, although he was largely cleared there),

the *added* problem for Obama/Johnson/Countrywide was hypocrisy, or a double standard that Obama was trying to apply -- first, during the past few months, and then a different standard in the past few DAYS.

First, during the past few months, Obama would have us believe that any contact with Countrywide was anathema. Obama -- directly and through his campaign -- quite expressly said that Countrywide was evil; how dare Hillary's Mark Penn have worked for Countrywide in the past; etc.

But then? after Hillary suspended and Obama tapped Johnson as one of his 3 Veep Vetters, and it emerged that Johnson had a very cozy connection with Countrywide and its CEO?

Then, suddenly, Countrywide was no big deal; Johnson isn't "working for" Obama; and so on, and on. As Jake Tapper understated matters: "My stars."

So, again, it's not that Johnson necessarily did anything wrong. To me, and I think most observers, the issue was hypocrisy: How can Obama lambaste Countrywide (and Hillary-for-having-an-advisor-who-worked-for-them), then turn around and hire Johnson to vet veeps?

The good news for Obama is that he is learning from these missteps. I genuinely think he has been given an easier time by much of the press until the last few months, and, as a result, often doesn't understand when his explanations are not going to wash.

[the problemwitcharing]

JW, I value your opinion of me, but really, who is the sheep here? Peter titled his post "Obama's Countrywide Connection" and, it seemed HE hadn't read the article. It was the mindless spreading of this particular story, without any REAL explanation of either the loans in question, the relationships at Fannie Mae between Countrywide, or the relationships between GSE's and all lenders in general- that contributes to the current information gap.

Obama defended the guy's relationship with Mozillo, Johnson still said it was his decision to quit and then Peter titles the next post "Obama Severs Countrywide Connection." Vindication, 'cause I say so.

JW, I will leave it to you as the resident expert on idiocy, to have the final word on what does and doesn't get posted here. But Hey, if the Blogger didn't understand the implications of these articles and headlines, and how he perpetuates REIC by mindlessly posting them without accompanying analysis, he should have asked UncleBilly or Cal to help him, like he usually does.