What’s the Take-Away of the Jim Johnson Saga?

So James A. Johnson has resigned from Barack Obama’s vice president search committee in the aftermath of the Wall Street Journal’s revelations that Johnson, a former chief executive of Fannie Mae, according to The New York Times “received mortgages on favorable terms from the Countrywide Financial Corporation, the mortgage company that was a central player in the subprime lending crisis. Mr. Johnson also faced questions about his role on compensation committees that awarded large payouts to corporate executives.”

The Times report continues:

In Mr. Johnson’s tenure at Fannie Mae, he became close to Countrywide, the hobbled mortgage lender now at the center of the subprime mortgage crisis. Countrywide was Fannie Mae’s largest mortgage provider, which brought Mr. Johnson into contact with Angelo R. Mozilo, Countrywide’s chief executive.

Through that relationship, Mr. Johnson received three home mortgages totaling at least $2 million at rates that appear to be lower than the prevailing mortgage rates at the time. When the story about the personal mortgages broke in The Wall Street Journal last weekend, Mr. Johnson’s business relationships began to draw greater scrutiny.

Here’s what the Obama campaign is saying about the matter. Obama said that Johnson’s Countrywide connection was not a problem for his campaign, since his role, along with Caroline Kennedy and former Deputy Attorney General Eric Holder, was to vet potential vice presidential running mates and therefore was a “discrete task,” that Johnson was an unpaid volunteer, and that he was not to have a role in an Obama administration.

I hope some of you will offer your interpretations of this matter.

Is this a good-news story, revealing that Obama knows how to move swiftly to deal with people on his team whose behavior is counter to his values and his intention to change the way Washington is run?

Or is it troubling, given Johnson’s role as a consummate Washington insider?

Or is it even more troubling, in another way, given that the whole sequence of events seems to be part of an attempt to swift-boat Obama even before he formally gets the nomination?

Note that CNN reports tonight that putative GOP nominee Sen. John McCain has already started to go after a second Obama vp vetter, Eric Holder, charging that Holder was responsible for recommending that then-President Bill Clinton pardon commodities trader Marc Rich, accused of tax evasion.

In a piece on the Huffington Post titled How The Wall Street Journal Fabricated a Scandal to Impugn an Obama Supporter, James Johnson, David Fiderer argues that the WSJ “laid a flimsy foundation” for its allegations against Johnson in its news report, setting the stage of a full-throated attack against Obama’s integrity and judgment on its editorial page.

Alice Chasan served as editor and associate publisher of Shelterforce from 2007 to 2008.


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