Johnson resigns post in Obama camp in flap over home loans

He'll no longer head vice-presidential search committee, a casualty of what DNC Chairman Dean had called 'a Republican-planted story.'

Monitor Breakfast

The head of presumptive Democratic nominee Barack Obama's vice-presidential search committee stepped down Wednesday, amid allegations that he had received favorable loans from troubled mortgage company Countrywide Financial.The resignation of James Johnson, former CEO of Fannie Mae Corp. and a longtime Democratic insider, ended an episode in Senator Obama's presidential campaign that had turned into a major distraction from his message of change and an end to "politics as usual."

At a Monitor breakfast Wednesday morning, before Mr. Johnson's resignation, Democratic National Committee Chairman Howard Dean played down Johnson's role in the campaign and hit back hard at the Republican Party.

"Johnson doesn't get paid, he's a volunteer," Mr. Dean said. "Secondly, since it was a Republican-planted story, obviously it's fair to say that the Republicans are hypocrites, and they are. The guy who's running the McCain campaign is a lobbyist who's on leave, Rick Davis. Then they take plenty of lobbyist money; the RNC [Republican National Committee] takes lobbyist money. So I mean, what is this? This is nuts."

Obama has pledged to take no donations from lobbyists and, as de facto leader of the Democratic Party, has the Democratic National Committee on board with the same policy. The Republicans have not followed suit. But with the Johnson controversy swirling for several days, Obama's attempt at presenting a "clean" campaign had been sullied.

Dean sought to shift the focus back to the GOP.

"The distinction is that Barack Obama does not have any lobbyists on his paid staff," he said. "None. Zero. And John McCain does."

Dean also portrayed Democratic unease about November as a positive. All the predictive political models portend an excellent year for the Democrats, given America's economic woes and the Iraq war. But as polls remain close between Obama and the presumptive Republican nominee, Senator McCain, especially in battleground states, some Democrats are worried that Obama could lose.

"You know what, I'm actually thrilled they're nervous," Dean said. "I think it's about time. Last spring, there was this feeling of confidence that we were just going to roll through everything, and that's how you lose elections. So I'm just delighted that Democrats are really nervous about whether they can win or not. Just delighted. It's the most important thing that's happened, other than the fact that we finally have a nominee."