CHICAGO (Reuters) - The chief of Democrat Barack Obama’s search for a vice presidential running mate stepped down from that role on Wednesday over questions about loans he received from a company involved in the U.S. housing crisis.
The Illinois senator said in a statement that Jim Johnson had decided to quit the unpaid position in order to avoid being a distraction from the process of gathering information about possible vice presidential candidates.
Obama clinched the Democratic presidential nomination last week and will face Republican John McCain in the November election.
“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,” Obama said.
Obama appointed Johnson last week to a three-member team heading his search for a No. 2. Other members of the team include Caroline Kennedy, daughter of the late President John Kennedy, and former Deputy Attorney General Eric Holder.
“We have a very good selection process under way, and I am confident that it will produce a number of highly qualified candidates for me to choose from in the weeks ahead,” Obama said.
The Wall Street Journal had reported Johnson, former head of the mortgage giant Fannie Mae, received private loans at below-market rates from Countrywide after he left Fannie Mae.
Countrywide has been accused of helping fuel the subprime mortgage crisis with risky loans.
Illinois Democratic Sen. Richard Durbin told MSNBC that it was Johnson’s decision to step down and was the right move.
“He’s willing to step aside from this line of fire. And it appeared that this was going to be a bigger story than it really should have been. I think he made the right choice,” said Durbin.
The campaign of Republican presidential candidate John McCain had heaped criticism on Johnson in response to weeks of attacks from Democrats over McCain’s ties to lobbyists.
“Jim Johnson’s resignation raises serious questions about Barack Obama’s judgment,” said McCain spokesman Tucker Bounds.
Obama campaign spokesman Bill Burton fired back, saying, “We don’t need any lectures from a campaign that waited fifteen months to purge the lobbyists from their staff.”
Obama had given Johnson a vote of confidence on Tuesday, dismissing Republican criticism of him. Johnson had performed the same role for Walter Mondale in 1984 and John Kerry in 2004.
“I am not vetting my VP search committee for their mortgages,” Obama had told reporters on Tuesday.
Obama’s search for a running mate is casting a wide net. Former NATO commander James Jones surfaced this week as a name on his list.
Among other possibilities are his vanquished rival, New York Sen. Hillary Clinton; former Senate Majority Leader Tom Daschle of South Dakota, a close adviser to Obama; Virginia Sen. Jim Webb, a decorated Marine veteran of the Vietnam War; among others.
Johnson stepped down even as Obama was criticizing credit card companies for what he called predatory lending practices and accused McCain of turning a blind eye to them.
On a two-week tour focusing on problems in the U.S. economy, Obama held a round-table discussion with three people who have seen their credit card debt skyrocket due to a relentless cycle of interest rate increases and fees.
Obama said “John McCain has been part of the problem,” accusing the presumptive Republican nominee of siding with banking industry lobbyists on credit issues and voting against an effort to increase transparency on credit card bills.
“When he had the chance to help families avoid falling into debt, John McCain sided with the credit card companies,” Obama said of the Arizona senator.
(Additional reporting by Deborah Charles; Editing by David Wiessler)
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