Freddie Mac did pay millions to McCain aide's firm despite denial: NYT

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Washington, Sep 24 : Freddie Mac, one of the giant mortgage companies at the heart of the credit crisis, paid 15,000 dollars to a firm owned by John McCain's campaign manager despite earlier claims by Republican presidential candidate that the aide had broken ties with the company.

The disclosure undercuts a statement by McCain on Sunday night that the campaign manager, Rick Davis, had had no involvement with the company for the last several years, The New York Times reported.

Davis's firm received the payments from the Freddie Mac until it was taken over by the government this month along with Fannie Mae, the other big mortgage lender whose deteriorating finances helped precipitate the cascading problems on Wall Street, the people said.

Davis took a leave from Davis and Manafort for the presidential campaign, but as a partner and equity-holder continues to benefit from its income.

No one at Davis and Manafort other than Davis was involved in efforts on Freddie Mac's behalf, the people familiar with the arrangement said.

A Freddie Mac spokeswoman said the company would not comment.

Jill Hazelbaker, a spokeswoman for the McCain campaign, did not dispute the payments to Davis's firm. But she said that Davis had stopped taking a salary from his firm by the end of 2006 and that his work did not affect McCain.

The revelations come at a time when McCain and Obama are sparring over ties to lobbyists and special interests and seeking political advantage in a campaign being reshaped by the financial crisis and the plan to bail out investment firms, the paper reported.

The report also escalated a confrontation between the McCain campaign and The New York Times that flared up a day earlier, when the paper first reported that campaign manager Rick Davis was paid nearly 2 million dollars over five years for defending both Freddie Mac and Fannie Mae against stricter regulations.

McCain adviser Steve Schmidt responded to the first report by lashing out at the newspaper, saying it was "in the tank" for Barack Obama and had "cast aside its journalistic integrity and tradition."

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