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Breaking News: Jim Johnson resigns from Obama campaign

June 11, 2008 | 11:54 am

Jim Johnson, the former head of Fannie Mae who was leading Barack Obama's vice presidential search when his favorable loans with Countrywide Financial were revealed, is stepping down from the Obama campaign, he says, to avoid becoming a distraction.

In a statement just issued from the Obama campaign headquarters in Chicago momeJim Johnson, former head of Fannie Mae and veteran Washington insider who was heading the vice presidential search team for Barack Obama has resigned under firents ago, the candidate sought to minimize the impact of the embarrassing episode. He said:

“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. 

"We have a very good selection process underway, and I am confident that it will produce a number of highly qualified candidates for me to choose from in the weeks ahead.  I remain grateful to Jim for his service and his efforts in this process.”

The fact is the situation was untenable for a campaign that parades itself as an agent of change prepared to invade Washington and reform its sleazy insider ways. There are few other modern Democrats who are more savvy or insider than Johnson, who also happens to be a significant fundraiser for Obama.

He and the campaign could sense the lasting legs this story of the wealthy Johnson getting special insider loan rates from Countrywide as a "friend of Angelo's," Angelo Mozilo, the co-founder of Countrywide. That's the company Obama has criticized by name as bearing a large responsibility for the current loan crisis.

Obama tried to make it clear yesterday that he couldn't vet everybody and that Johnson really was not "working" for him, he was merely helping with the VP search and did not have a formal campaign position. But by this morning even in Chicago they could tell that wasn't washing.

Special deals for others also bring back memories of Obama's early Illinois connections with now-convicted political insider, Antoin Tony Rezsko.

So Johnson, D.C. veteran that he is, knew he had to walk the plank. He offered to resign early today or late last night. And the campaign said, gee, well O.K. So long.

--Andrew Malcolm

Photo Credit: AP

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