Unsevered Ties?

Rick Davis, John McCain's campaign manager, has remained the treasurer and a corporate director of his lobbying firm this year, despite repeated statements by campaign officials that he had ended his relationship with the firm in 2006, according to corporate records.

The McCain campaign this week criticized news stories disclosing that, since 2006, Davis's firm has been paid a $15,000-a-month consulting fee from Freddie Mac, the troubled mortgage giant recently put under federal conservatorship. The stories, published Tuesday by NEWSWEEK, The New York Times and Roll Call, reported that the consulting fees continued until last month even though, according to two sources familiar with the arrangement, neither Davis nor anybody else at his firm did any substantial work for the payments.

Stefanie Mullin, a spokesperson for the Federal Housing Finance Agency, which has taken over Freddie Mac and its sister entity Fannie Mae, confirmed Wednesday that the Davis Manafort contract is being terminated. "All lobbying activity has stopped and political consulting contracts at Fannie Mae and Freddie Mac are in the process of being terminated," said Mullin. (Democratic strategist Paul Begala also was on the Freddie Mac payroll, according to sources familiar with the arrangement.)

In its initial statements to reporters this week, the McCain campaign said that the disclosure of the payments from Freddie Mac was irrelevant because Davis, who was never a registered lobbyist for the troubled housing corporation, had severed his relationship with Davis Manafort in 2006, and was no longer drawing any income from it. Jill Hazelbaker, the campaign's communications director, said in an e-mail Tuesday that Davis "left" Davis Manafort in 2006. In a statement attacking The New York Times, posted on the campaign's Web site on Wednesday, campaign spokesman Michael Goldfarb said that Davis "separated from his consulting firm, Davis Manafort, in 2006." (A senior campaign official, in an e-mail statement to NEWSWEEK that was not for attribution on Tuesday night, said "Rick is no longer affiliated with the firm.")  

But those statements appear to have overstated the extent to which Davis had severed his relationship with his lobbying firm. Filings made by "Davis Manafort Partners" with the Virginia Corporation Commission as recently as April 1, 2008, show that Davis was still listed as one of only two corporate officers and directors of the firm, according to records on the commission’s Web site reviewed by NEWSWEEK. That filing records Davis as the "treas/clerk" of the firm; his business partner, Paul Manafort is listed as the president and chief executive officer.
Another filing by “Davis Manafort, Inc.” (with the same Alexandria, Va. address, and recorded on Oct. 17, 2007) also lists Davis as an officer and director of the firm, reporting his position as "T/Clerk," a reference to his formal title as corporate treasurer and clerk.

Both filings are annual reports of basic corporate information that are required by Virginia state law. There is no record of any amendments to the filings reporting that Davis's status with the firm has changed. The next annual report by "Davis Manafort Inc.", for the year 2008, isn't due to be filed until next month.

The McCain campaign Wednesday sought to clarify Davis's affiliation with his firm, but insisted that the new information contained in the corporate filings in Virginia didn't alter their basic points. "Rick Davis is functionally not affiliated with the firm," said Hazelbaker, the communications director. "That is to say that, since he left, he in fact has not done any work for Davis Manafort or its clients, and he has not taken a salary or received compensation since 2006. Furthermore, he will not receive any deferred compensation."

Hazelbaker directed all other questions about the matter to Davis Manafort. (Among those questions she said she was not in a position to answer were: whether there was any documentation of Davis's changed relationship with his firm, and why Davis Manafort continued to bill and accept the consulting fees if Davis wasn't performing any work for Freddie Mac.) For the second day in a row, Davis Manafort did not return phone calls about the matter.

Davis himself, on a conference call with reporters on Monday, said that he "had a severed leave of absence from my firm for 18 months." But if the leave is as described by campaign officials, it appears to have stopped short of the steps another senior McCain campaign official, Charlie Black, took to severe his ties to his own well-connected Washington lobbying firm, BKSH & Associates. After controversy arose over the lobbying ties of top McCain campaign officials, Black—one of Washington's most prominent lobbyists—wrote a letter on March 17, 2008, to Scott Pastrick, chief executive officer of his firm, stating: "I hereby resign my position as Chairman of BKSH, effective March 31, 2008." Pastrick confirmed Wednesday that Black has "resigned in full" from BKSH & Associates, serving as neither a corporate officer, director nor partner.