Barack Obama's foes sought to sully the Democratic presidential nominee on Thursday by alleging in a new television ad that he takes advice from former Fannie Mae executive Franklin Raines.
"Obama has no background in economics. Who advises him? The Post says it's Franklin Raines, for 'advice on mortgage and housing policy.'"
"Shocking," continues the ad's narrator. "Under Raines, Fannie Mae committed 'extensive financial fraud.' Raines made millions. Fannie Mae collapsed. Taxpayers? Stuck with the bill."
Watch the ad of unspecified size which is set to air on national cable and unidentified broadcast television stations: LINK
An hour after the McCain ad was released to the press, the Obama campaign pushed back with a statement from Raines himself.
"I am not an advisor to Barack Obama, nor have I provided his campaign with advice on housing or economic matters," said Raines in a statement released by Obama's campaign.
The McCain charge stems from a July 16, 2008 story in The Washington Post in which Raines is described as having "taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters."
The Obama campaign says that it is now seeking a correction from the Washington Post but it will not say whether it sought a correction back in July before McCain made Raines an issue in the campaign.
With Obama slated to meet Friday with his economic team in Miami, Raines is not the only Democrat whom Republicans are trying to use against Obama.
The Republican National Committee sent a missive to reporters on Thursday saying that Friday's meeting with Larry Summers and Bob Rubin is a "good opportunity" for Obama to ask his advisors "why they fought for the 1999 regulatory reforms that Obama now blames for the current crisis."
The RNC's invocation of Gramm-Leach-Bliley is potentially dicey because it may serve to remind voters of McCain's ties to its principal author.
Phil Gramm, the former Texas Republican senator, was a top McCain economic adviser until he was forced to step down earlier this year after referring to the U.S. as a "nation of whiners."
Beyond his work on legislation that broke down the firewalls between commercial and investment banks and insurance companies, Gramm played a key role in the deregulation of derivatives.
On Dec. 15, 2000, Gramm had a 262-page amendment slipped into an appropriations bill.
It blocked federal agencies from regulating financial derivatives. Analysts have said that this led to risky mortgage-backed securities being passed to investors.
During a July 24 NPR interview, McCain economic adviser Douglas Holtz-Eakin sought to separate McCain on procedural grounds from Gramm's 2000 amendment.
Holtz-Eakin said McCain is a "long-standing critic of that style of doing business, large omnibus spending bills that aren't scrutinized, provisions dropped into bills in the dead of the night without proper vetting."
"His view," said Holtz-Eakin, "of the way that Congress should work is defend a proposal on its merits in the House, defend it in the Senate, agree on it in a conference, have it passed by both houses and signed by the president of the United States. And to do things in any other way is to really betray the trust of the American public."
While McCain can argue that he favors a more transparent legislative process, it's much more difficult for him to substantively differentiate himself.