Prometheus 6

Vetting a Vetter: Obama’s Pick Fuels G.O.P. Criticism
By LESLIE WAYNE

In choosing James A. Johnson for his vice-presidential selection committee, Senator Barack Obama tapped the ultimate Washington insider: a nationally recognized business executive who also helped Walter F. Mondale and John Kerry pick their Democratic running mates.

But now some of the business ties that made Mr. Johnson so attractive to Mr. Obama are being used against him.

Republicans and their presumed presidential nominee, Senator John McCain, have criticized Mr. Johnson, the former chairman of Fannie Mae, accusing him of getting favorable rates on three home mortgages totaling $1.7 million as a friend of the chief executive of the Countrywide Financial Corporation, the troubled mortgage lender that has became a symbol of the excesses that led to the crisis in subprime mortgage.

Mr. Johnson was also involved in some of the more controversial executive compensation decisions in recent years, serving on the board of five companies that granted lavish pay packages to their executives — and often playing a key role in approving them.

One of the more well-known cases involves UnitedHealth Group, a Minnesota company, where Mr. Johnson was a board member and later head of the compensation committee.

The company came under fire after the chief executive was granted more than $1.4 billion in stock options — some $618 million of which was returned as a result of settlements with federal regulators and shareholders.

The executive, William McGuire, resigned, but he kept $800 million from the package.

Because of cases like UnitedHealth Group, Mr. Obama, Democrat of Illinois, introduced legislation in the Senate last year to restrict runaway compensation.

The measure, informally called “Say on Pay,” would give shareholders an advisory role in setting executive pay packages. It passed the House and is pending in the Senate.

In introducing the measure, Mr. Obama said it was intended to “force corporate boards to think twice before signing over millions of dollars to C.E.O.’s.”