Looking Out For Themselves

Steve has already written about the discovery that yet another key McCain staffer was hired by Freddie Mac specifically to influence McCain. I just wanted to draw attention to one detail of the article:

“Freddie Mac’s interest in Buse dates back to mid-2003. That May, McCain presided over a hearing on executive pay at which he condemned “a disconnect between CEO pay and performance at many of America’s corporations” and said that “these kinds of excesses are making a lot of Americans angry.”

Freddie Mac became a target of criticism the following month when the company announced it had fired its president and forced out two other top executives. Soon Freddie Mac revealed that fired president David W. Glenn would get stock options worth nearly $6 million. Leland C. Brendsel, who was forced to retire as chief executive after 21 years at the company, walked away with compensation worth $24 million.

Concern over the golden parachutes sparked calls in Congress for tougher oversight. McCain told a newspaper in August 2003 that he planned to hold hearings on executive compensation oversight and on Fannie Mae and Freddie Mac.

“Senator McCain was talking about limiting executive compensation, and Buse was retained to nip that in the bud,” said a former lobbyist who insisted on anonymity because of continuing relationships with the companies.”

That is: Buse wasn’t hired to lobby about some important matter or policy. He was hired because executives at Freddie Mac were worried that McCain might put limits on their own salaries.

I wonder how their shareholders, now largely wiped out, feel about the fact that Freddie’s management was spending shareholders’ money simply to protect their own salaries.

Did it work? It depends on who you ask. The McCain campaign:

“McCain campaign spokesman Brian Rogers said the hiring of Buse did not influence McCain. “I think the reality is that John McCain takes positions, you know, based on what he believes is in the public interest, period,” Rogers said. “If these folks thought they were getting something out of John McCain . . . it’s not based in fact.””

Freddie Mac:

“McCain continued to talk about the compensation issue. But inside Freddie Mac, Buse’s effort was viewed as “hugely successful,” a former Freddie Mac lobbyist said. “The statements didn’t go away completely, but in terms of Senator McCain doing anything about it, it just never materialized. As far as I know, Buse was the only person working that issue for Fannie or Freddie, so he got a lot of credit internally for the results.””