Rick Davis, Yet Again

Remember the Rick Davis story? The one about how Davis, John McCain’s campaign manager, was hired by Freddie Mac to do virtually nothing? The one that McCain’s decision to pretend to suspend his campaign crowded out of the news? It’s back (h/t TPM):

“Last week, though, McCain’s trust in Davis was tested again amid disclosures that Freddie Mac, the troubled mortgage giant that was recently placed under federal conservatorship, paid his campaign manager’s firm $15,000 a month between 2006 and August 2008. As the mortgage crisis has escalated, almost any association with Freddie Mac or Fannie Mae has become politically toxic. But the payments to Davis’s firm, Davis Manafort, are especially problematic because he requested the consulting retainer in 2006 — and then did barely any work for the fees, according to two sources familiar with the arrangement who asked not to be identified discussing Freddie Mac business. Aside from attending a few breakfasts and a political-action-committee meeting with Democratic strategist Paul Begala (another Freddie consultant), Davis did “zero” for the housing firm, one of the sources said. Freddie Mac also had no dealings with the lobbying firm beyond paying monthly invoices — but it agreed to the arrangement because of Davis’s close relationship with McCain, the source said, which led top executives to conclude “you couldn’t say no.””

Savor that last bit, as you recall McCain railing against the culture of corruption in Washington. I don’t know whether shaking Freddie Mac down for a $15,000 a month to do nothing violates any laws, but it’s certainly not the way straightforward people do business. It’s also not a way it’s possible to do business if you don’t have pretty serious connections, and the willingness to abuse them. Asking someone to pay your firm $180,000 a year for nothing, when you know, or should know, that they will feel that they “can’t say no”, is exactly the kind of corruption that John McCain spends his days pledging to fight. It’s rather peculiar that he does not begin that fight by sacking his campaign manager.

Moving right along:

“The McCain campaign told reporters the fees were irrelevant because Davis “separated from his consulting firm … in 2006”, according to the campaign’s Web site, and he stopped drawing a salary from it. In fact, however, when Davis joined the campaign in January 2007, he asked that his $20,000-a-month salary be paid directly to Davis Manafort, two sources who asked not to be identified discussing internal campaign business told NEWSWEEK. Federal campaign records show the McCain campaign paid Davis Manafort $90,000 through July 2007, when a cash crunch prompted Davis and other top campaign officials to forgo their salaries and work as volunteers. Separately, another entity created and partly owned by Davis — an Internet firm called 3eDC, whose address was the same office building as Davis Manafort’s — received payments from the McCain campaign for Web services, collecting $971,860 through March 2008.

In an e-mail to NEWSWEEK, a senior McCain official said that when the campaign began last year, it signed a contract with Davis Manafort “in which we purchased all of [Davis’s] time, and he agreed not to work for any other clients.” The official also said that though Davis was an “investor” in 3eDC, Davis has received no salary from it. As to why Davis permitted the Freddie Mac payments to continue, the official referred NEWSWEEK to Davis Manafort, which did not respond to repeated phone calls. One senior McCain adviser said the entire flap could have been avoided if the campaign had resisted attacking Barack Obama for his ties to two former Fannie Mae executives, which prompted the media to take a second look at Davis. “It was stupid,” the adviser said. “A serious miscalculation and an amateurish move.” Still, this adviser said, McCain’s faith in his campaign manager remains unswerving.”

Josh Marshall has more on 3eDC.

Remember the McCain campaign’s response to the last round of Davis stories?

“As has been previously reported, Mr. Davis separated from his consulting firm, Davis Manafort, in 2006. As has been previously reported, Mr. Davis has seen no income from Davis Manafort since 2006. Zero. Mr. Davis has received no salary or compensation since 2006. Mr. Davis has received no profit or partner distributions from that firm on any basis — weekly, bi-weekly, monthly, bi-monthly, quarterly, semi-annual or annual — since 2006. Again, zero.”

I suppose it’s possible that his salary, which has been paid to Davis Manafort, has been distributed entirely to its other partners, while Rick Davis subsists on air and dewdrops and curls up each night in a flower petal, like a fairy. Somehow, however, I doubt it.

Here’s a question: did Rick Davis tell John McCain about his arrangement with Freddie Mac before last week? If not, then I would expect Davis to be fired within days: you just don’t keep information like that from your boss and expect to keep your job. But if Davis did tell McCain, then when McCain approved his ad slamming Obama for supposedly having an advisor who had been the chairman of Fannie Mae — though both he and the Obama campaign deny that he advised them, and his connection to Obama would have been tenuous in any case — McCain knew that his own campaign manager had been retained by Freddie Mac until it was taken over by the government. That would be dishonorable, though not, unfortunately, surprising.

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