Republican National Committee - No Accountability: Will Obama Cut Ties With Jim Johnson,...

Republican National Committee - No Accountability: Will Obama Cut Ties With
Jim Johnson, Who Received Millions From Accounting Manipulations and
Sweetheart Mortgage Deals?

WASHINGTON, June 11 /PRNewswire-USNewswire/ -- The following was released
today by the Republican National Committee:

(Logo: http://www.newscom.com/cgi-bin/prnh/20080519/RNCLOGO )

Jim Johnson, A Former CEO Of Fannie Mae And Top Campaign Adviser, Earned Large
Bonuses Due To An Accounting Manipulation:

In 1998, Fannie Mae's Earnings Were Manipulated, Which Resulted In "Maximum
Payouts" To Executives Including CEO Jim Johnson. "As CEO of Fannie Mae,
Johnson, a former chief of staff to Vice President Walter F. Mondale and
chairman of the board of the Kennedy Center, was the beneficiary of accounting
in which Fannie Mae's earnings were manipulated so that executives could earn
larger bonuses. The accounting manipulation for 1998 resulted in the maximum
payouts to Fannie Mae's senior executives -- $1.9 million in Johnson's case --
when the company's performance that year would have otherwise resulted in no
bonuses at all, according to reports in 2004 and 2006 by the Office of Federal
Housing Enterprise Oversight." (Jonathan Weisman and David S. Hilzenrath,
"Obama's Choice Of Insider Draws Fire," The Washington Post, 6/11/08)

The Manipulation Resulted In Johnson Receiving A Bonus Of Over $1.9 Million
When He Otherwise Would Not Have Earned A Bonus. "An Office of Federal Housing
Enterprise Oversight report in September accused the company of improperly
deferring $200 million of estimated expenses in 1998, which allowed management
to receive full annual bonuses. Had the expenses been recorded that year, no
bonuses would have been paid, the report said. Fannie Mae reported paying
bonuses in 1998 to Johnson, who received $1.932 million; Raines, who then was
chairman-designate, $1.11 million; Chief Operating Officer Lawrence M. Small,
$1.108 million; Vice Chairman Jamie S. Gorelick, a former deputy attorney
general, $779,625; Chief Financial Officer J. Timothy Howard, $493,750; and
Robert J. Levin, who was executive vice president for housing and community
development, $493,750." (Albert B. Crenshaw, "High Pay At Fannie Mae For The
Well-Connected," The Washington Post, 12/23/04)

Johnson Also Received Fees And Compensation From Fannie Mae Worth $3.3 Million
Between 2001 And 2006. "Johnson left the company before it was swept up in an
accounting scandal that tarred its reputation, but even during the years of
scandal, Johnson was reaping hundreds of thousands of dollars in consulting
fees and other compensation, $3.3 million in all between 2001 and 2006."
(Jonathan Weisman and David S. Hilzenrath, "Obama's Choice Of Insider Draws
Fire," The Washington Post, 6/11/08)

And Johnson Also Received Special Loans From Countrywide Financial:

Jim Johnson, A Former CEO Of Fannie Mae Chosen To Lead Obama's Vice
Presidential Search Committee, Received Special Loans From Countrywide
Financial CEO Angelo Mozilo. "Countrywide Financial Corp. makes mortgage loans
through a vast network of offices, brokers and call centers. But a few
customers have gotten their loans a special way: through Countrywide Chief
Executive Angelo Mozilo. These borrowers, known internally as 'friends of
Angelo' or FoA, include two former CEOs of Fannie Mae, the biggest buyer of
Countrywide's mortgages, say people familiar with the matter. One was James
Johnson, a longtime Democratic Party power and an adviser to Sen. Barack
Obama's campaign, who this past week was named to a panel that is vetting
running-mate possibilities for the presumed nominee." (Glenn R. Simpson and
James R. Hagerty, "Countrywide Friends Got Good Loans," The Wall Street
Journal, 6/7/08)

While CEO Of Fannie Mae, Johnson And Mozilo Worked Closely And Maintained A
"Close Friendship." "From 1991 to 1998, Mr. Johnson served as CEO of the
Federal National Mortgage Association, also known as Fannie Mae, which worked
closely with Countrywide, one of the nation's leading lenders and loan
servicing companies. In 1996, Mr. Johnson named Mr. Mozilo as chairman of
Fannie Mae's national advisory council. A 1999 article in the American Banker
said the two men had a 'close friendship.'" (Josh Gerstein, "Top Talent Scout
For Obama Tied To Subprime Lender," The New York Sun, 6/9/08)

"Property Records Show Mr. Johnson Has Received More Than $7 Million In Loans
From Countrywide Since 1998, The First Coming In The Waning Days Of His Fannie
Mae Tenure." (Glenn R. Simpson and James R. Hagerty, "Countrywide Friends Got
Good Loans," The Wall Street Journal, 6/7/08)

At Least Two Of The Mortgages Were At Rates "Below Market Averages." "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." (Josh Gerstein,
"Top Talent Scout For Obama Tied To Subprime Lender," The New York Sun,
6/9/08)

Johnson Did Not Inform Fannie Mae's Board Of His "Sweetheart Mortgage Deals."
"Fannie Mae tells us that Mr. Johnson did not inform the company's board of
these sweetheart mortgage deals, nor did his CEO successor Franklin Raines,
who also received such loans." (Editorial, "Friends Of Barack," The Wall
Street Journal, 6/11/08)

As Recently As 2003, Johnson Has Praised Mozilo's Leadership Of Fannie Mae,
Calling It "Remarkably Impressive." "Since leaving Fannie Mae, Mr. Johnson has
lavished praise on Mr. Mozilo's performance, calling it 'remarkably impressive
' in a 2003 interview with BusinessWeek. 'By strengthening servicing in good
times, Countrywide has done a brilliant job of insulating itself for the down
cycle,' Mr. Johnson told Fortune in 2003." (Josh Gerstein, "Top Talent Scout
For Obama Tied To Subprime Lender," The New York Sun, 6/9/08)

NOTE: "In Recent Months, The Job Has Been Looking Less Than Brilliant, As
Countrywide Reported Billions In Losses, Much Of It From So-Called Subprime
Loans Made To Borrowers Unqualified For Typical Loans." (Josh Gerstein, "Top
Talent Scout For Obama Tied To Subprime Lender," The New York Sun, 6/9/08)

NOTE: Johnson Is Also A Bundler For Obama's Presidential Campaign And Has
Committed To Raising $100,000 To $200,000. (Obama For America Website,
www.barackobama.com, Accessed 5/19/08)

FLASHBACK: Obama's Campaign Attacked Sen. Clinton's Campaign For Its
Countrywide Ties:

Obama Senior Campaign Strategist David Axelrod Criticized Sen. Clinton For
Employing Mark Penn, Whose Firm Once Represented Countrywide. MSNBC's Keith
Olbermann: "Senator Clinton not stopping to hear a reporter's question about
Mark Penn, let alone answer it, leading Penn's counterpart in the Obama
campaign to fill in the vacuum about Penn's non-departure departure this
morning on MSNBC." David Axelrod: "She's stuck him with him through the
revelation that his firm was working fro 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)

Watch David Axelrod Here: http://www.youtube.com/watch?v=PIJQUgH11M0

Axelrod: "Penn's Business Dealings Have Always Been An Issue." "Last week, she
turned her fire on a huge proposed pay-out to the founder of Countrywide
Financial, the mortgage company at the centre of the storm. Yet two months
ago, Countrywide turned for temporary help with its tattered image to the
public relations firm Burson-Marsteller, whose president is Mr Penn. ... Mrs
Clinton's criticism of lenders also raised fresh questions over the role of Mr
Penn. Mr Obama's chief strategist, David Axelrod, said: 'Penn's business
dealings have always been an issue. The Clinton campaign is clearly not too
worried who its chief strat-egist does business with.' Burson-Marsteller said
it was no longer working with Countrywide and that Mr Penn did not have a
hands-on role with many of its 2,000 clients." (Philip Sherwell, "Clintons'
Pain And Gain In Housing Crisis," The Sunday Telegraph, 1/20/08)

The Obama Campaign Criticized Sen. Clinton For Accepting Contributions From
Representatives Of Countrywide. "Obama aides also said Clinton is in no
position to stiffen oversight after taking contributions from mortgage
industry lobbyists, including funds from representatives of Countrywide, which
has been at the center of the mortgage meltdown. 'If we're really going to
crack down on the practices that caused the credit and housing crises, we're
going to need a leader who doesn't owe these industries any favors,' campaign
manager David Plouffe said." (Anne E. Kornblut, "Clinton Unveils Plan To Ease
Housing Crisis," The Washington Post, 3/25/08)

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