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Report: Top Obama Transition Staffer Led "Backdoor" Lobbying Campaign For Fannie Mae
Change we can believe in?
Last week, the Obama transition team announced that it had tapped veteran Beltway Democrat Thomas Donilon to help lead its review of operations at the State Department. As multiple news outlets quickly pointed out, until 2005 Donilon helped oversee the aggressive lobbying operation of troubled mortgage giant Fannie Mae.
Now, ABCNews.com has fleshed out the picture a bit, reporting that Donilon oversaw what it describes as a "backdoor lobbying campaign ... to undermine the credibility of a probe into the firm's accounting irregularities."
The details, which center on a campaign to discredit an agency charged with overseeing the company:
The effort -- which reportedly included attacks on the funding for the oversight agency, the Office of Federal Housing Enterprise Oversight, and an attempt to launch a separate investigation into OFHEO itself -- was ultimately unsuccessful, and regulators eventually discovered top Fannie Mae executives had been manipulating the company's financial reporting to maximize their bonuses.
Donilon was not found to be involved in the financial manipulations, but he did help give Fannie's board the misimpression that the company was in good financial health, according to the OFHEO investigation.
Donilon did not comment to ABCNews.com.
Josh
Zachary
The guy is looking at the State Department, no? Obviously this history with Fannie Mae is not all that appealing, but I'm unsure of what, if any, relvance it has to his current job of "reviewing operations at the State Dept." Of course, the larger issue, of what kind of change Obama will actually deliver is what's important, and I'm sure what you are getting at. It would be nice if you could flesh that out for us, rather than leaving us with the snarky "Change we can believe in?"
IMO, of more relevant concern to the financial crisis is the likelihood that Larry Summers or Tim Geittner will be named Treasury Sec. The same Larry Summers, who, while Clinton's Treas Sec., deregulated derivatives, helping lead to our current situation. And, the Same Tim Geittner whose decision as NY Fed Chairman to let Lehman Bros. wasn't all that bright.
There isn't much to this story on Donilon, it's an old association with nothing new to support a story....Unless you want to go ahead and propose one, becuase you haven't done so with this post.
Stick with Summers and Geittner (whose decision as NY Fed Chairman to let Lehman fail was equally shortsighted).
November 17, 2008 12:29 PM | Reply | Permalink
I'm inclined to agree re Donilon. He's only transition team and it's not his old bailiwick.
Since you raise Treasury, I have to say that there is a lot of bashing going on. I don't get it. What exactly did Summers do under Clinton to promote hazardous deregulation? He was there for about 18 months. Gramm wrote the bill I think you're thinking of, and got it in at the last minute in Dec 2000, right?
I don't know about Geittner, but what makes you sure saving Lehman would have been all that bright? Maybe a failure was needed.
In any event, who would you support for Treasury, and why?
November 17, 2008 3:32 PM | Reply | Permalink
We may be seeing the real beginning of a third party if Obama keeps putting Centrists and right leaning people in positions of power.
I'm impressed with much of what Obama has said he plans to do such as closing Gitmo and shutting down torture but some of his other decisions seem questionable at best. We must all remember that important advice of Buyer Beware as we watch Obama fill his cabinet.
November 17, 2008 12:32 PM | Reply | Permalink
What Centrists and Right leaning people has he put into power? Didn't the article say that this fellow was in the tranistion team? A Third Party? Lets count....Dem, Repubs, Libertarian, Green, Constitutional, Socialist (yes, there is one - the leader came on Colbert), am I missing any? We need more? You really think Obama is going to spur a movement to get a viable Nth party going? And can we stop using "Change we can believe in" sarcastically in every article about Obama's transition team? Buyer Beware? Give me a break. Time and time again Obama has said that he is not perfect and will not be a perfect President. He also said that he will make decisions that we may not agree with, but he will always tell you what he thinks. So the next time he makes a decision that is "questionable" (code for: you don't agree with him), remember those instructions before you claim the product is defective.
November 17, 2008 12:49 PM | Reply | Permalink
Dump him, right now.
Don't let this stuff get any more than a single news cycle, just get rid of the guy. Too bad for him, but there are going to be lots of jobs for lobbyists like him in Washington dominated by Democrats.
One wonders how someone in the transition team got through vetting when Fannie and Freddy involvement are specifically asked about in the pre-employment questionnaire.
Maybe the questionnaire wasn't ready when he was hired on, maybe he lied or withheld info, or maybe Podesta's team decided to let him slide on the involvement. Whatever the reason, just dump him.
Bonus, if they dump him today, McCain visiting Chicago to kiss the ring will step all over this story.
November 17, 2008 12:49 PM | Reply | Permalink
And another thing, so what if he puts centrists or right leaning people in his cabinet? Republicans can have good ideas too. I'm giving you a heads up on this, but Obama doesn't think Democrats have a monopoly on good ideas and there will be Republican(s) in his cabinet. Both of those statements are not speculation, he said them in an interview.
November 17, 2008 12:55 PM | Reply | Permalink
Feel free to describe here any of those great Republican ideas with which you are so familiar. Be sure to include the great Republican ideas that have served this country so well over the last eight years. For extra credit you could also describe the great Reagan Republican ideas such as, for example, supply-side, "trickle down" economics.
November 18, 2008 2:49 AM | Reply | Permalink
We all know how the beltway functions, don't we? You can't spit without hitting a lobbyist. And in some cases, the lobby is for something decent like renewable energy.
Unless he only hires 5 or 6 people, Obama can't do much better than getting folks who aren't on current rosters or those who haven't formerly been associated with horror stories like Blackwater mercenaries or something. His choices aren't going to suit everybody all of the time. Obama is hardly the free-wheeling liberal the GOP painted him to be. (In fact, he's far from it, he's a compromiser not a hard liner.) He's a politician, didn't anyone notice that before? He will be a disappointment to many on the left. So what? It's politics. Politics is never a pure as the driven snow enterprise.
In juxtaposition with the cloak and dagger, bait and switch Cheny reign, I have nothing to gripe about. By comparison, few should.
November 17, 2008 1:57 PM | Reply | Permalink
I think one problem that every new administration faces is the availability of experienced, talented and knowledgeable people. Mr. Donilon is just one example of the dilema that PE Obama is in. Yes, Donilon lobbied FMay. But, PE Obama is mitigating that experience by assigning Donilon to review State Department operations.
November 17, 2008 2:08 PM | Reply | Permalink
He said they won't run his White House. That's the standard that I'll hold him to. We'll know soon enough who's actually writing the policy. Until then, things like this are silly, and only really exist to fill up print space. This guy helping with the transition doesn't bother me at all.
Somebody wake me in February.
November 17, 2008 2:10 PM | Reply | Permalink
I think these kinds of stories are entirely appropriate. Obviously, the parallel should be how we would react to finding out the same about a key Bush or McCain staffer. This guy's position might cause a reasonably suspicious person of the opposite party to think "hey, Obama's OK with that kind of back-door lobbying against the American people's interests." Since I consider myself reasonably (OK, rabidly) suspicious of the Bush administration, this is the kind of mild taint I don't want anywhere near Obama's administration. Remember, this is the kind of thing that might cause an independent voter to shake their head and say "politics as usual - I was foolish to think Obama's administration would be anything different" ... and that's what we want to avoid.
November 17, 2008 2:32 PM | Reply | Permalink
Oh, jehosephat, I love your Graham/Brian picavatar. What a sweetie he was. I miss him very much.
November 17, 2008 3:30 PM | Reply | Permalink
Why are so many people here giving this kind of thing a pass? This is the exact same sort of crap that we would have ROASTED Bush over.
This isn't a very high bar. If someone worked or lobbied for Fanny, Freddie, AIG, or the other bailout recipients, they positively, definitely should NOT work for the Obama administration, at least not for the next few years. Barack Obama set a high standard in his hiring practices, it's a standard he should stick with.
It's ridiculous to suggest that there are a lack of people to fill these jobs or that "everyone" is somehow connected to these companies.
If you haven't noticed, the unemployment rates are rather high. The truth is that there are dozens of people scrambling for each and every position in the Obama administration. I would be shocked if any sizable percentage of these job seekers had any professional connection to that small handful of financial firms.
There are so many good people seeking administration jobs who do not have the taint of those frims, there is simply no reason to even consider job seekers that do have a Fanny problem, no reason at all.
November 17, 2008 3:14 PM | Reply | Permalink
Like who?
Your bar is absolutely high, in this case.
November 17, 2008 3:59 PM | Reply | Permalink
You're saying Obama will be forced to selected people with such connections because there are no qualified applicants available except for those with professional connections to that short list of black-listed financial bad actors?
Yeah, right. Those sort of claims didn't pass the smell test in previous administrations, and they don't pass it now.
I don't deny there are people with such connections who are truly concerned about their ability to get jobs in an Obama administration, (maybe even someone you know?) but such is life. Decisions have consequences.
I find it laughable to suggest that a statistically significant number of applicants for Obama administration jobs have had professional relationships with that small group of black-listed financial concerns. Although I won't deny that there are certainly some well connected individuals with such connections. I expect it's just those sorts of connections that have brought the Obama administration this nascent scandal.
In this economy, with this level of unemployment and given the historic nature of Obama's pending administration, there are certainly, definitely, unquestionably, a far greater number of qualified applicants than there are jobs.
High level professional relationships (including lobbying) with Fannie, Freddie, and AIG should be clear cut disqualifiers for any and all Obama administration positions. Given the plethora of applicants, there's simply no reason for the administration to "settle" for those who are saddled with such unsavory connections.
November 17, 2008 4:34 PM | Reply | Permalink
OMG! Centrists in the Obama administration! The world is coming to an END!
Gee, it seems the far left has learned nothing from the far right.
When ideologues from either party control the agenda, the American people lose.
I for one am glad that Obama is looking to centrists and non-ideologues to fill his administration.
Gobama!
November 17, 2008 4:06 PM | Reply | Permalink
The pom-poms are over there. You might want to pick up a spare set; yours are in danger of wearing out.
November 18, 2008 2:09 AM | Reply | Permalink
He's using the guy to assist with his transition, not be part of his policy team. He's using this guy in a position that's not related to his lobbying ties. This is entirely consistent with what he said running for President.
I agree with those people that are looking to hold Obama to his promise to reform the way his White House will govern, and I'm with that 150%. However, I honestly don't see anything to get excited about here. Nothing about this one goes against Obama's promise unless you thought that he would simply ban lobbyists writ large.
November 17, 2008 4:47 PM | Reply | Permalink
dammit, this should have been attached to M Stevens.
November 17, 2008 4:47 PM | Reply | Permalink
Yet I tend to read these transition team appointments as balloons being floated for permanent positions.
This appointment suggests to me that someone in the administration wants this guy, but doesn't want to create a sh_tstorm of bad publicity.
So they appoint him to a transition job. If the transition appointment doesn't create much of a fuss, they then give him a position in the administration proper. If it does create bad PR, they dump him and say "We were never going to hire him permanently, this is much ado about nothing".
I'm not in any way suggesting that anyone who has ever worked for a lobbying firm be denied jobs in the Obama administration. I am saying that those who had high level relationships with a VERY short list of bad actors in the financial community should be out.
Fanny? Freddie? AIG? How is this hard? Why is there any pushback? The thought of hiring people with such connections so soon after the bailouts is so unseemly that it shouldn't require any thought at all. Such hires are politically daft.
If this guy is still around at the end of the week, it will tell me that political connections are winning out over common sense.
November 17, 2008 5:02 PM | Reply | Permalink
The "target rich environment" posed by some comments to this story pose the dilemma of which ones to go after, and which to simply forego responding to. But, let's take a crack at culling a few.
First, I disagree with the suggestion that one's conduct as a lobbyist for the "Macs" has no bearing on, or relevance to an appointment dealing with the Department of State. If he leaves a trail of slime behind him in one place it is fair to ask why one would invite a slug into the DOS, regardless of his level of talent and acumen. That said, there is little to suggest that Mr. Donilon is either unethical or a law-breaker, ABC's gratuitous, vague and loaded use of "backdoor lobbying" to describe his activities notwithstanding.
The assertion that "Donilon was not found to be involved in the financial manipulations, but he did help give Fannie's board the misimpression that the company was in good financial health" is potentially more problematic. However, the relevant question is: "What does that mean, 'help give'?"
Raising red flags is essential to oversight. However, floating implications and insinuations without facts to back them up is not only sloppy, lazy reporting, it is irresponsible. Smoke does not always mean fire.
November 18, 2008 12:40 PM | Reply | Permalink