Firm top McCain aide 'quit' was paid $90K by campaign
Nick Juliano
Published: Thursday September 25, 2008

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John McCain's presidential campaign has become increasingly adamant this week that campaign manager Rick Davis has had nothing to do with the consulting and lobbying firm he founded since signing on for the White House bid two years ago.

So why does it look like McCain's own campaign paid Davis's firm in lieu of putting him directly on their payroll?

The Arizona senator's presidential campaign paid at least $90,000 to Davis Manafort Inc., the firm Davis founded with Republican lobbyist Paul J. Manafort, during the first six months of last year, while Davis was serving as CEO for the campaign. Five payments were made for "communications consulting" in increments of $10,000 to $40,000, according to a Raw Story review of campaign finance records maintained by the Center for Responsive Politics.

The payments stopped in July 2007, when Davis and some other top McCain aides reportedly began working for free, as McCain's campaign struggled to raise money. Davis himself never received a personal salary from the campaign, although he reportedly earned $20,000 per month from the campaign.

Neither McCain's campaign nor Davis Manafort returned calls seeking an explanation for the payments to Davis's firm Thursday. A well-connected Republican operative told Raw Story the payments to Davis Manafort appear to have been in exchange for Davis's service to the campaign.

Davis previously faced questions over another firm he owns, 3eDC, and its work on behalf of the McCain campaign. That group billed the campaign $175,000 in early 2007 to build the McCain Web site, all while Davis was serving as the campaign's CEO.

More recently, the McCain campaign manager's connection to Davis Manafort has come under scrutiny because of the firm's connection to embattled mortgage giants Freddie Mac and Fannie Mae.

In a pair of articles this week, the New York Times revealed that the companies had paid Davis nearly $2 million to fight off federal regulations, and then Freddie Mac kept his firm on a $15,000 per month retainer when it became clear he'd be working for the McCain campaign.

The disclosures infuriated McCain's campaign, which unleashed a slew of attacks on the Times and any reporters who tried to point out inaccuracies in their denials.

Newsweek's Michael Isikoff on Thursday further undercut the campaign's attempts to argue that Davis the campaign manager was fully separated from Davis Manafort the consulting firm.

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 article contradicted a lengthy memo released the day before that attempted to make the case that Davis was completely disconnected from his firm.

"As has been previously reported, Mr. Davis has seen no income from Davis Manafort since 2006. Zero. Mr. Davis has received no salary or compensation since 2006," McCain spokesman Michael Goldfarb wrote in the memo. "Mr. Davis has received no profit or partner distributions from that firm on any basis -- weekly, bi-weekly, monthly, bi-monthly, quarterly, semi-annual or annual -- since 2006. Again, zero. Neither has Mr. Davis received any equity in the firm based on profits derived since his financial separation from Davis Manafort in 2006."

The statement was meant to counteract implications of a conflict of interest on Davis's part because of his previous work on behalf of the mortgage lenders, which last month had to be bailed out by the federal government.

If the statement is true, though, it seems it would also mean Davis collected no salary from his time as campaign CEO.