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This is my first diary, so be please gentle with me.

We all know Chuck Hagel is Obama's favorite (R) senator. They've worked together in congress. They clearly respect each other. Chuck Hagel is retiring so he doesn't really have much to worry about in terms of backlash. And, of course, Liliburt Hagel has already endorsed Obama.

Now, we have another factor to consider - payback.

More after the jump.

This AP story on MSNBC details a significant, and sneaky campaign run by folks close to McCain to defeat a Freddie Mac, Fanny Mae reform bill sponsored by Chuck Hagel.

WASHINGTON - Freddie Mac secretly paid a Republican consulting firm $2 million to kill legislation that would have regulated and trimmed the mortgage finance giant and its sister company, Fannie Mae, three years before the government took control to prevent their collapse.

The article is a gold mine of information. Here are some key elements it covers.

Tidbits:

  1. McCain has scapegoated Freddie Mae and Fanny Mac for the global credit crisis. I've noticed when a Republican accuses a Democrat of something, it's usually a good lead on something naughty the Republican did...
  1. Since 2004, the political operations of Freddie Mac have been run by Republicans
  1. Chuck Hagel sponsored a bill to reform Freddie Mac and Fanny Mae when accounting irregularities first started to become apparent in 2005
  1. Freddie Mae paid $2M to DCI to run a behind-the-scenes campaign against Hagel's bill. The operation skirted filing lobbying reports by lobbying consitituents in the Senators districts to put pressure on the Senators, rather then lobbying the Senators directly
  1. The DCI campaign was targeted against 17 GOP Senators in 13 states, 9 of whom did not sign the letter, 7 of whom were facing re-election in the 2006 campaign, and 5 of those 7 lost their seat

People:

  1. Chuck Hagel, reform bill sponsor, fan of Obama, retiring Senator. Screwed by the back-door campaign to kill his bill (it died
  1. Hagel's chief of staff Mike Buttry
  1. Freddie Mac Executive Hollis McLaughlin who oversaw the campaign
  1. DCI CEO Doug Gooodman who received some $2M to conduct the campaign
  1. Bill Frist, who kept the bill off the floor of the Senate
  1. McCain campaign manager Rick Davis who received some $2M to lobby for Freddie Mac
  1. John McCain, who appointed Rick Davis campaign manager and tried to hire Doug Goodman to manage the GOP September Convention (when Goodman's ties to the Myanmar junta came up, he ended up taking a pass on that)

Money:

  1. $2M from Freddie Mac to DCI (Doug Goodman)
  1. $2M from Freddie Mac to Rick Davis
  1. $250K from Freddie Mac to sponsor the GOP convention
  1. $2,800 contribution from McLoughlin to McCain

The Democrats opposed Hagel's reform bill, but they were honest enough to say why:

Democrats did not like the harshest provision, which would have given a new regulator a mandate to shrink Freddie Mac and Fannie Mae by forcing them to sell off part of their portfolios. That approach, the Democrats feared, would cut into the ability of low- and moderate-income families to buy houses.

The political backdrop to the debate "was like bizarre-o-world," said the second of three people familiar with the program. "The Republicans were pro-regulation and the Democrats were against it; it was upside down."

Sen. Richard Shelby, the committee chairman at the time, underscored that in a statement Wednesday, saying that with Democrats already on their side, it was not surprising that Freddie Mac and Freddie Mae went after Republicans. "Unfortunately," said Shelby, R-Ala., "efforts then to derail reform were successful."

The DCI campaign was a political plumbing operation:

Once Freddie Mac's in-house lobbyists failed to keep Hagel's bill bottled up in the committee, McLoughlin responded by secretly hiring DCI.

DCI never filed lobbying reports with Congress about what it was doing because the firm was relying on a long-recognized gap in the disclosure law.

Federal lobbying law only requires reporting and registration when there are contacts with a legislator or staff.

Shh. Be vewy quiet...:

"Hollis's goal was not to have any Freddie Mac fingerprints on this project and DCI became the hidden hand behind the effort,"

Mike Buttry is not happy about what happened - and I have to think he is also speaking for his boss:

On Friday night, Hagel's chief of staff, Mike Buttry, said Hagel's legislation "was the last best chance to bring greater oversight and tighter regulation to Freddie and Fannie, and they used every means they could to defeat Sen. Hagel's legislation every step of the way."

"It is outrageous that a congressionally chartered government-sponsored enterprise would lobby against a member of Congress's bill that would strengthen the regulation and oversight of that institution," Buttry said in a statement. "America has paid an extremely high price for the reckless, and possibly criminal, actions of the leadership at Freddie and Fannie."

So, Hagel admires Obama. Hagel is retiring. Hagel saw Freddie Mac headed for the brink and tried to do something about it. McCain's pals undercut the bill by undermining (behind the curtain) Hagel and the other Republicans Hagel was working with. McCain scapegoats Freddie and Fanny. Hagel's chief of staff is pissed about the torpedo. Hagel's wife has already endorsed Obama.

Oh, and McCain is running a campaign right out of Mein Kampf, instead of trying to actually address the nation's economic problems. I know Hagel has a 100% Christian Coalition rating, but I think that may be to Obama's advantage here - perhaps giving some of the evangelicals cover to vote for Obama, as Powell does to many defense-oriented moderates.

I think Hagel might've endorsed Obama anyway, at the right time, like when the Powell endorsement news cycle dies down.

Now that I've read the article, the possibility seems even more possible.

I also wonder how the culpability of McCain's pals in all this has something to do with the way McCain has blamed Freddie and Fannie (above and beyond the normal blame-the-poor attack line on Freddie and Fannie the reich-wing has been promoting). Once again, if the (R) are attacking, it's often associated with a weakness on their side.

Originally posted to island in alabama on Sun Oct 19, 2008 at 08:48 PM PDT.

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