Obama aide steps down amid mortgage queries

The Wall Street Journal said James Johnson received more than $7 million in special loans.

A leader of Barack Obama's vetting team for possible running mates stepped down yesterday after days of controversy over loans he received from Countrywide Financial Corp.

James Johnson had been on Capitol Hill this week getting advice from members of Congress about whom Obama should pick.

"Jim did not want to distract in any way from the very important task of gathering information about my vice presidential nominee, so he has made a decision to step aside that I accept. We have a very good selection process under way, and I am confident that it will produce a number of highly qualified candidates for me to choose from in the weeks ahead. I remain grateful to Jim for his service and his efforts in this process," Obama said in a statement issued by his campaign.

John McCain's campaign and other Republicans have been hammering Obama over Johnson, the former CEO of Fannie Mae, the federal mortgage guarantor that works closely with Countrywide, one of the nation's largest mortgage lenders. The Wall Street Journal reported on Saturday that Johnson, received more than $7 million in special loans from Countrywide with the help of the firm's chief executive, Angelo Mozilo, including one while he was at Fannie Mae.

Critics said Obama, who is running against special interests in Washington, was being hypocritical in relying on Johnson for such an important task. Questions have also been raised about Johnson's work on executive compensation committees that recommended sizable pay packages for CEOs - while Obama has been railing against excessive CEO pay on the campaign trail.

Obama's campaign had been defending Johnson, who has denied any wrongdoing and who did the same VP vetting for Democrats Walter Mondale in 1984 and John F. Kerry in 2004. Obama said as recently as Tuesday that Johnson was an unpaid volunteer who hadn't been offered a job in a future administration.

"I am not vetting my VP search committee for their mortgages," Obama told reporters Tuesday. "I would have to hire the vetter to vet the vetters."

And just hours before the announcement about Johnson, Kerry defended him in a conference call with reporters, describing him as a "very experienced, very discreet, very capable individual."

The McCain campaign responded to Johnson's departure by continuing to question Obama's judgment.

"By entrusting this process to a man who has now been forced to step down because of questionable loans, the American people have reason to question the judgment of a candidate who has shown he will only make the right call when under pressure from the news media," McCain spokesman Tucker Bounds said in a statement. "America can't afford a president who flip-flops on key questions in the course of 24 hours."

Obama did not immediately say whether he would replace Johnson on his vetting team, which also includes former deputy attorney general Eric Holder and Caroline Kennedy.