Normally I would not front page this as it’s a detail in the national presidential race – no Colorado angle and not that big. But ColoradoPolitical (our most active recent sockpuppet) was a one-man spew-a-thon on this issue.
And it looks like the story against James Johnson may be nothing more than a bunch of smoke from the WSJ.
From David Federer at HuffPo we have:
How The Wall Street Journal Fabricated a Scandal to Impugn an Obama Supporter, James Johnson
Ok, the original article said:
“A comparison of the Fannie Mae officers’ terms with interest rates prevailing when they got their loans raises the possibility Countrywide gave them preferential terms. But it’s impossible to tell for sure from public documents. An array of other factors also can account for lower-than-average rates, including a borrower’s income, total assets and credit score; how big the loan is compared with the home’s value; and how many “points” a borrower may have paid upfront in order to get a lower rate.”
In fact, the 3 loans were:
October 23, 1998: Amount: $393,000; Initial Rate: 6.375%; Market Average: 6.2%. Rate was .175% above market average.
November 8, 2001: Amount: $1,300,000; Initial Rate: 5.250%; Market Average: 6.0%. Rate was .75% below market average.
June 20, 2003: Amount: $972,000; Initial Rate: 3.875%; Market Average: 4.3%. Rate was . 4125% below market average.
Based on that what was the conflict of interest?
James Johnson was the CEO of Fannie Mae, the biggest buyer of Countrywide’s mortgages, until December 1998. Consequently, the only mortgage Johnson obtained when there was a potential conflict of interest was a $393,000 mortgage that was 17.5 basis points “above” the market average.
So where’s the problem? Well there is a big one. The major papers took a story that said there might be an issue. Repeat, might be. And the summed it up as:
“Jim Johnson, the man Barack Obama has picked to lead his vice-presidential vetting team, has gotten preferential treatment for personal loans from Countrywide Financial, a company Sen. Obama and others have blamed for helping to create the subprime mortgage mess.”
Lazy-assed reporting took something where it looks like there is nothing there and instead of doing the hard work of truly checking it out, jumped to the conclusion that would sell the most papers.
Did Jim Johnson do nothing wrong? It’s not clear. But in this country there should be a presumption of innocence and there is nothing here other than some maybes.
Unfortunately this encourages nimrods like ColoradoPolitical because they do see that repeating something ad-naseum will make enough people believe it regardless of the facts.