Obama's Countrywide connection

Two degrees of separation: The Wall Street Journal reports that a very special friend of Sen. Barack Obama is also a very special friend of embattled Countrywide Financial co-founder Angelo Mozilo.

The Journal reports that James Johnson --  a high-ranking advisor to Obama -- was part of an elite group -- "friends of Angelo" -- who got more than $7 million in special loans from Countrywide.

The New York Sun spells out details here:  "James Johnson, one of three people tapped by Mr. Obama recently to oversee the search for his running mate, took at least five real estate loans totaling more than $7 million from Countrywide Financial Corp. through an informal program for friends of the company's CEO, Angelo Mozilo, the Wall Street Journal reported Saturday."

More: "The Journal said at least two of the mortgages, among a series of loans made available to people Countrywide officials called "friends of Angelo," were at rates below market averages, though it is difficult to predict a market rate without access to nonpublic information about a borrower's credit history and other factors that can reduce interest charges on a loan."

About James Johnson: He's part of the permanent government of this country, a long-time Democratic fixer (Mondale and Kerry campaigns), former CEO of Fannie Mae, and as such a big buyer of Countrywide loans. He's a guy who sits on a bunch of corporate boards, etc.

Outrage: "That reeks most high," said Bonnie Russell, a public relations specialist and vocal critic of Mr. Mozilo, according to the Sun. "Where's the 'change to believe in' if they're playing the same old game using the same old players?"

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: A.P.
Hat tip: BR, via e-mail, mylessthanprimebeef

Comments

[JP]

The headline "Obama's Countrywide Connection" and the accompanying LA Times blog entry (and the WSJ article) are all pathetic, silly attempts to manufacture solid news. First, those who hold themselves as journalists neglected to make critical inquiries of how and why we went to war in Iraq. Now they seem to hope that by the sheer distribution of baseless stories, the public will be manipulated into frenzy about absolutely nothing.

[Bert]

Huh? If they gave him a rate exception, they have to do it as a matter of policy, and everyone who fits those same criteria get the same rate exception.

What a pathetic story. Half of California has their loans at Countrywide - even Ed McMahon - and he's in foreclosure.

Fox News has invaded the WSJ - what a shame. An attempt at a Murdoch hit job.

[toby]

I have to say, for being the "New" type of politicians, he sure does have a lot of sleazy friends.

[tiddle]

Would Obama do anything differently, given his critique on "special interests"? Not one bit.

He's just another politician, with special connections to special interests groups. Only Obama supporters are naive and stupid enough not to know that; perhaps, they willingly look the other way, cuz the cold truth is too hard to swallow.

[Christopher Robin]

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.)

[Brian Smith]

I got here from a headline on my Google homepage. How this story is "news" is beyond me.

[Pauly]

I heard Obama is also connected to Kevin Bacon

[I live in L.A., too]

Tommy:

I like your "logic," except for one thing: Bush and McCain are far from friends. If Bush weren't president right now, I doubt you'd see any pictures of him and McCain at fundraisers. You remember that VIP barbecue he threw at his ranch? George and Laura were not invited.

[Rainman]

It's hard to see why this should be a big deal for Obama. A guy who's part of a team charged with finding a vice presidential nominee had a special deal with Countrywide. That's embarrasing now that Countrywide has cratered, but it's hardly damning. To me, the bigger deal is that Obama and company couldn't find anyone else do their VP vetting. Is Jim Johnson the only person in Washington able to do this? It's not as if he's been a stunning success at it either. He missed John Zaccaro's real estate problems when he signed off on Geraldine Ferraro's pick in 1984. It seems a grad student with a laptop, Google and a Lexis/Nexis account could do as well.

[Patriot]

Hey! why don't you talk about the 40,000 jobs McCain's friends gave away to Airbus (France, Europe...)?

So, where is the Patriotism?

This is the worst bias article i ever seen.

very unprofessional jornalist :-)

Sorry :-)

[Intel Agents]

I think this just proves that Presidential Nominees should only befriend or associate themselves with people who never do anything even remotely questionable.

Wait a second, that leaves NOBODY!

[gerald]

This is stupid. Obama just selected (last week) this dude because he has done past searches for a VP in 1984 and 2004. Apparently the guy got a sweet loan from Countrywide, but isn't Countrywide the biggest home lender in the US? I had a countrywide loan too. The guy was the former CEO of Fannie Mae, you think he had good credit? At any rate, what does that have to do with Obama?
I guess this is the only thing Republicans have on Obama, like he was on the board of a non-profit with a former 60s terrorist radical (ignore that Republicans and Mayor Daily served on the same board). If I were a Republican I would be scare and would be engaging in yellow journalism as seen here, but things are changing.
If this gives Obama a "Countrywide connection", I can think of ways McCain has terrorist connections, drugs connections, and lets talk about some real connections to the Keating five and the savings and loans debacle. McCain is after all the one standing actually taking money from PACs and lobbyists.
- Peter, you republican? Is this what your column is going to turn into?

[Fandeboris]

If You Obama fanboys don't get the connection. Don't let it ruffle your feathers any. Obama is nothing more than the wolf in sheep's clothing. AFTER it is to late and Obama (heaven forbid!) get elected, will you see his true side.

[Joker Jo]

If Obama calls his opponent Bush-McCain - we should call him Crook-Hussein

[newageblues]

Joker Jo: I support Obama. Please call him Crook-Hussein as often as you can.

[Hula Girl]

So, what?

Bush holds hands (literally) with the Saudi's and hangs out with Cheney and Condi.

I fail to see the Obama/CW scandal.

[Header]

Geez - this is moronic. The power of the internet is not only can truth come out, but a lot of unsubstantiated crap can as well. In this case, the connection is substantiated to exist, but the "evil" is not necessarily present.

To Joker-Jo and fandeboris and toby and tiddle and piddle and the anachronism know as Victor Knopp and gromit:

Looking for bogeymen is a nice hobby but not a fruitful endeavor.

And especially to gromit - you dimwit - Obama didn't say squat about Mark Penn. But know that Mark Penn was in charge of the firm that OWNS McCain's campaign manager's firm. Now, how's that for a connection? Parroting McCain: That's not change I can believe it.

And why we're on the subject of home loans, remember a guy named Charles Keating? Maybe you aren't mature enough to remember what happened with the S&L meltdown in '89. There was a group known as the Keating Five, five Senators — Dennis DeConcini, Alan Cranston, John Glenn, Don Riegle and John McCain — who had received, for both themselves and for groups they supported, well over $1 million from Keating in the 1980s as favors and political contributions. They all had to answer to the Senate Ethics Committee.

[Gromit]

Header wrote:
"And especially to gromit - you dimwit - Obama didn't say squat about Mark Penn."

Wrong.

Obama's chief campaign strategist and principal talking-head, David Axelrod, blasted Penn only two months ago for having worked with Countrywide.

Axelrod said this in early April: "[Hillary]'s stuck with [Penn] through the revelation that his firm was working for Blackwater and working for Countrywide, and, you know, so, it’s kind of stunning. Remember that the embassy said they weren't sure whether he was there as a representative of his firm or a representative of Senator Clinton. I mean, I think there are issues associated with this. I'm not - you can use the word hypocrisy, but there are certainly questions that arise from this."
(MSNBC's "Countdown," 4/7/08)

Whoops. Looks like this "dimwit" is smarter than a Header. And a lot less in the tank for Obama!

It's folks like you -- who are willing to deny any negative comment about Obama whether or not it is true (and, obviously and more troublingly, not CARING whether it is true) -- who give the many genuinely thoughtful Obama backers like David Geffen a bad name.

I'd play with you more, but this is a battle of wits, and I'm obviously fighting someone who's unarmed.

[LA]

I'm all for Obama, but it's a fair story. He picks three people to head up his VP search, currently the most high-profile matter of his campaign. One is Caroline Kennedy (because she is the daughter of JFK), the second is Eric Holder (because he was one of the highest-ranking/highest-profile African Americans in the DOJ during the last Democratic administration), and third is James Johnson.

It's not a friend-of-a-friend-of-a-friend, guilt by association, right-wing media thing. It is what it is. Poor vetting on Obama's part, but nothing he can't get past.

Obama is not perfect, but he's the best we've got. And I say that inspite of all these Obamaton comments, not because of them.

Obama/Democrat '08

[O no u didnt!]

And why we're on the subject of home loans, remember a guy named Charles Keating?

Posted by: Header

I was afraid someone would educate these guys and gals about that...in the Journalism 101 for Dummies that means another equally vaporous article on McCain's connections to nefarious elements associated (well...) with the LA Housing market.

For the sake of all of us readers, Let's pray that Carly Fiorina buys a house in Playa Del Rey, or God knows what will be posted....

[Jennifer Suits]

Have any of you actually read the full WSJ article? The only facts they found is that an Obama advisor had 3 mortgage loans with the country's largest lender and apparently knew the president. One of those loans was not at a rate below the national average while two were below the national average (although the article goes on to admit that they didn't know whether the advisor paid points to reduce the rate, whether the rates were average for the area and similarly situated Countrywide borrowers). For the LA Times to report on stories from other publications without confirmation of facts, especially when the initial articles are lacking facts is irresponsible and frustrating. Your article picks and chooses seemingly damning content from those articles and inflames the issue with a conclusory headline. Shame on you!

Please read the copy of the letter I wrote to the WSJ specifically questioning their facts, their rush to publication and their motives:

Gentlemen,

I don't even know what to say other than your article was irresponsibly published. Your research was incomplete and made implications that I can only assume were intended to harm a candidate. Your article has spawned tens of other articles which picked up on your implications and ran with them. This was clearly foreseeable and I can only assume it was intentionally published in an attempt to create a scandal.

The only fact you have that might raise questions about the loans to James Johnson is that he had 3 loans and that the interest rates for 2 of them were below the national average. Is that it? You obviously know that there could be other factors which could explain that single fact since the rest of your article discusses those "possible" factors. If someone only skimmed your article (which many people do) it looks as though the WSJ has dug up some juicy dirt. But a reading of your article basically throws the implication out there then slowly adds caveats which if carefully read leads to the conclusion that you haven't finished your research and that there is nothing out of the ordinary with those loans.

As some one with a real estate law background I read your first few paragraphs and assumed you would provide further insight. Instead, you did no geographic research to determine whether the lower rates were made due to a more competitive market at the time. Were those loans at a lower rate than similar loans in that market? I don't know because you didn't address that issue. Were those loans at a lower rate than comparable Countrywide loans? I don't know because you didn't provide me with that information. Comparing to a national average is no comparisan at all.

Did James Johnson have stellar credit and significant income and net worth which would have allowed him the luxury of shopping around for the best rate? I don't know because you didn't provide me information in that regard. Doesn't it make sense that someone who works in the mortgage industry would have superior knowledge of how to shop for the best rates?

The most important question: were those loans held by Countrywide or sold on the secondary market. If they were sold on the secondary market that would indicate that they met certain underwriting standards and that they were processed as any other Countrywide mortgage. Unfortunately, you didn't provide that information either.

You don't know whether either of James Johnson or Franklin Raines paid points to lower their rates?!

Implying that several loans with the same mortgagee indicates some kind of dubious relationship is silly. Mom and pop ironworker in the Midwest tend to stay with the same bank/banker for their entire lives. Bankers work hard to establish relationships with their customers. Look to EVERY bank in the US and you will find that there are loans made to people the bank president personally knows.

Tying an Obama adviser to Franklin Raines who "a onetime Clinton administration budget director, who left Fannie Mae amid an accounting scandal in 2004" is also irresponsible. Apparently, you found no other commonalities between these guys other than they both knew Countrywide Chief Executive Angelo Mozilo and both had loans at rates lower than the national average. There is an obvious attempt here to discredit a presidential candidate by tying one of his advisors to someone unrelated who "resigned amid" a scandal.

I must disclose that I currently support Obama, but I want to hear facts about both candidates. In the coming months there will be a good deal of mud slinging by the parties and the PACs. There are few sources I look to for honest, investigative journalism to help me sort truth from mud. I expect more from the WSJ. Shame on the two of you and your editor for allowing such an incomplete and obviously biased item to be published.

[Charles Queen]

Not suprising in the least to me. Obama has been caught talking out of both sides of his mouth on more than one occasion already and he isn't even in office yet. The first 1-2 years should prove to be very interesting. He will have a rough time of it trying to get anything by the congress and the senate. I don't look to see him last the entire four years

[Charles Queen]

Not suprising in the least to me. Obama has been caught talking out of both sides of his mouth on more than one occasion already and he isn't even in office yet. The first 1-2 years should prove to be very interesting. He will have a rough time of it trying to get anything by the congress and the senate. I don't look to see him last the entire four years

[MyLessThanPrimeBeef]

Now, for something completely different: Grand Avenue Project delay rejected, ses LATimes.

[EthanQ]

Sounds like the WSJ is desperate trying to dig up dirt on Obama. Like they used to say, this dog won't or can't hunt. As soneone else said, since when is doing a friend a favor illegal?

And why is it all we hear about are "Friends of Obama"?

Lets see some hit pieces on Friends of McCain, I'm sure they'd be doozies. Let's start with Charles Keating!

Better yet, how about if every newspaper person got up in the morning and recited, "I will not besmirch democracy with phony guilt by association stories."