Red State readers are by now well aware that John McCain was a cosponsor of legislation to impose new and tighter regulations on Fannie Mae, which passed the Senate Banking Committee in 2005 with unanimous Republican support. The legislation never made it to the full Senate for a vote because Senate Democrats refused to agree on terms for debate. This is a critical story to which the mainstream media has given short shrift, to the benefit of Barack Obama and the Democrats.

Today the Associated Press shines a little light on the story — but rather than finally examining the role of Democrats like Chris Dodd and Barney Frank in Fannie Mae’s collapse, they again go searching for Republicans on whom to blame the mess, while ignoring and minimizing the Democrats who play a starring role.In this case, the AP hits on an interesting story: the money that Fannie spent lobbying policymakers against new regulation. The story is scandalous — a Government Sponsored Enterprise trying to prevent the government from fixing clear problems, ultimately leading to collapse and an enormous taxpayer bailout. But AP is content to reduce this to an attempt to nail John McCain. Specifically, they report that the man whom McCain selected to run the Republican convention — and who later resigned — was hired by Fannie Mae to lobby against the bill:

The Republican senators targeted by DCI began hearing from prominent constituents and financial contributors, all urging the defeat of Hagel’s bill because it might harm the housing boom. The effort generated newspaper articles and radio and TV appearances by participants who spoke out against the measure.

Inside Freddie Mac headquarters in 2005, the few dozen people who knew what DCI was doing referred to the initiative as “the stealth lobbying campaign,” according to three people familiar with the drive. They spoke only on condition of anonymity, saying they fear retaliation if their names were disclosed. Freddie Mac executive Hollis McLoughlin oversaw DCI’s drive, according to the three people.

The article fails to mention that Fannie Mae paid a slew of lobbyists to defeat the Hagel GSE legislation. They included DNC trustee and Clinton/Gore/Lieberman campaign official Harvey Cauthen, longtime Democratic Congressman Tom Downey, Clinton White House legislative liaison Patrick Griffin, and former Al Gore Chief of Staff Ronald Klain. Between the campaign donations given directly by Fannie’s PAC to Democrats, and the powerful Democratic lobbyists engaged in the effort, it’s no wonder the Senate Democrats marched in lockstep to ensure that Fannie went bankrupt.

Not that you’d know that from reading the Associated Press, of course.