The Guardian,  Morra Aarons, 22/7/2008

In the midst of the Fannie Mae/Freddie Mac debacle is one constant refrain: the Washington system created the problem. Lobbyists (who used to work on or near Capitol Hill) doled out Fannie's political action committee money to their former bosses and colleagues. Lawmakers and their staff, upon receiving the money, did not attempt to regulate or rein in the two enterprises, which guarantee about half the home mortgages in the US. The New York Times reported that for the past two decades, "Fannie and Freddie were careful to include powerful Democrats and Republicans as executives, board members and lobbyists to make sure they had access to top government officials and clout on Capitol Hill, no matter which party was in power." A small anecdote serves to note the ubiquity of Fannie and Freddie's presence among Washington insiders: for years, Freddie Mac has sponsored ABC News' political digest, The Note, which everyone in Washington reads to get the daily scoop, every day.

And now that the chickens have come home to roost, Congress will now save the monster it helped create, letting US taxpayers foot the bill.

Even Obama, who trumpets the fact he does not accept lobbyist or PAC money, had ties at the top of Fannie Mae. Senator Obama's initial pick for his vice-presidential search team was Fannie's former CEO and a major player in the pre-meltdown conditions, and Obama has accepted lobbyist and PAC donations in the past.

Still, two recent moves signal that perhaps Obama's promise of change is real. Back in June, the Obama campaign moved large chunks of the Democratic National Committee (DNC) from their headquarters near Capitol Hill to Chicago. The Politico's Ben Smith reports: "As part of the efforts to fully integrate DNC operations with the Obama campaign here in Washington, in Chicago and in the states, political, field and constituency operations are moving to Chicago to work in the Obama headquarters. The goal is to consolidate these efforts into one operation and effectively drive one national strategy."

I hope the goal is to focus operations away from the needs of Beltway staffers and to those of the American people. In a similar move, the DNC announced in June that it, like Obama, would not longer solicit donations from PACs or lobbyists. Especially significant are traditional Democratic donors such as labour union PACs, but corporate entities play their role too, and almost every corporation has a PAC. Individuals who work at lobbying firms or as in-house lobbyists may still donate. In 2004, 10% of the DNC's total fundraising came from PACs.

I'm happy about these two steps because they signal a power shift away from business as usual in DC to a new, electorally-driven movement that just happens to be smack dab in the middle of our country. Perhaps if staffers drink after work with Chicagoans instead of DC's usual happy hour crowd of Capitol Hill employees, PR folks, fundraisers and lobbyists (and I write this having been several of the above) things could change around here.

I respect Obama for his repeated attempts to remove his campaign from the current political system. In US politics, the ability to raise large amounts of money symbolises one's leadership potential. It's unfortunate, but there it is. At least Obama is changing the dialogue around such massive intakes of cash. Take, for example, the June fundraising numbers for McCain and Obama. McCain chose to announce his June fundraising numbers couched in the context of a joint account set up between the McCain campaign and the Republican National Committee (Obama has a similar arrangement with the DNC). The Wall Street Journal reports: "The average donation, however, was $5,800, far below the $70,100 individual contribution that senator McCain's campaign had solicited for the joint fund-raising account. … More than 30 executives, their spouses and other wealthy donors did give $70,000 or more, with many others approaching that amount. Their checks helped senator McCain and the Republican party raise $62.3m through the account in the second quarter," which ended June 30.