TPMMuckraker September 21, 2008 - September 27, 2008
DOJ Office Of The Inspector General
DOJ Report On U.S. Attorney Firings To Be Issued Monday
The Department of Justice's Office of the Inspector General will on Monday morning release on its website its report into the firing of eight U.S. attorneys, according to David Iglesias, one of the former U.S. attorneys whose firing is at issue.
Iglesias told TPMmuckraker that he had been notified about the report's imminent release by Mark Masling, one of the investigators on the case. Iglesias said Masling told him that the report, which has been in the works since March 2007, is "very long" but wouldn't offer further details.
The probe, which centers on the firing of Iglesias and seven other U.S. attorneys, expanded to address allegations that a DOJ official, Monica Goodling, illegally took party affiliation into account in the hiring and firing federal prosecutors.
In July, Iglesias made some predictions about the reports conclusions, telling Harper's:
I expect them to conclude that there is sufficient evidence to show that former Attorney General Alberto Gonzales and former Deputy Attorney General Paul McNulty committed perjury in their statements before Congressional committees and investigators.PERMALINK | COMMENTS | RECOMMEND RECOMMEND (36)
Topics: DOJ Office Of The Inspector General, David Iglesias, U.S. Attorneys
Ted Stevens
Construction Workers On Stevens' House Say They Worked For VECO
At the center of the case against Ted Stevens, the Alaska Republican senator whose trial opened this week, are renovations to his home that the prosecution alleges were paid for by the oil-services contractor VECO.
And today, four construction workers testified that when they worked on Stevens' home, they either worked for VECO or reported to its staffers.
On of the workers testified that Stevens' wife, Catherine, once brought them muffins. On Wednesday, Stevens' defense lawyer seemed to try to shift responsibility onto Catherine Stevens, by claiming that she was the driving force behind the renovations and handled the project's finances.
Stevens is charged with failing to report gifts, of a value of $250,000, on Senate financial disclosure forms.
Topics: Alaska, Ted Stevens, Veco
Report: Gonzo Told Investigators That Bush Directed Him To Ashcroft's Hospital Bed
Murray Waas reports on the website of the Atlantic that Alberto Gonzales is now telling investigators that he was being personally directed by President Bush when, as White House counsel, Gonzales made a much-discussed late-night visit in 2004 to the hospital room of then Attorney General John Ashcroft, in order to get Ashcroft to certify that the Bush administration's warrantless wiretapping program was legal.
During Congressional testimony last year, Gonzales repeatedly refused to answer persistent questioning from Sen. Chuck Schumer as to whether the president, or Vice President Cheney, had directed him to seek out Ashcroft in the hospital.
Cheney himself told CNN's Larry King shortly afterward: "I don't recall that I gave instructions to that effect."
It's an important question, because its answer would shed light on the extraordinary lengths to which the president was willing to go to see the wiretap program reauthorized. At the time of the hospital-room meeting, Ashcroft, in Waas's words, "had been in intensive care for six days, was heavily medicated, and was recovering from emergency surgery to remove his gall bladder."
Waas adds:
Deputy Attorney General James B. Comey has said that he believes that Gonzales and White House Chief of Staff Andrew Card, who accompanied Gonzales to Ashcroft's hospital room, were trying to take advantage of Ashcroft's grievously ill state--pressing him to sign the certification possibly without even comprehending what he was doing--and in the process authorize a government surveillance program which both Ashcroft and the Justice Department had concluded was of questionable legality.
Gonzales' claim has come to light as part of an investigation being conducted by the Inspector General for the Department of Justice into whether Gonzales lied to Congress. In a separate story posted today, Waas reports that DOJ investigators are also looking into whether Gonzales created a set of fictitious notes to provide a rationale for the president's reauthorization of the program.
Gonzales had claimed during his testimony that at a 2004 meeting just prior to the Ashcroft hospital visit, Congressional leaders had given their support to the program. Four of those leaders have since denied that. President Bush had cited Gonzales' notes of the Congressional meeting as a rationale for reauthorizing the program. But the notes weren't written until days after the meeting, and after Bush and Gonzales had officially reauthorized the program. Gonzales has told the investigators that Bush personally directed him to write the notes, though it is unclear when. Investigators believe that, depending on when they were written, the notes could be evidence of an effort to provide a post-hoc justification for the reauthorization of the program.
Update: Evidence of Bush's involvement in Gonzales visit to Ashcroft's hospital room was previously reported by Barton Gellman, who wrote in his recent book, Angler: The Cheney Vice Presidency: "The phone rang at Ashcroft's bedside. Bush told his ailing cabinet chief that Alberto Gonzales and Andy Card were on their way." It had not been known, however, that Gonzales has told DOJ investigators of Bush's involvement.
Topics:
McCain Aide's Husband Headed Trade Group Lobbying on Bailout
It looks there's another John McCain adviser with a personal background that doesn't exactly jibe with the candidate's recent effort to portray himself as a populist crusader for ordinary folks.
Last week in Green Bay, McCain declared: "At the center of the problem were the lobbyists, politicians, and bureaucrats who succeeded in persuading Congress and the administration to ignore the festering problems at Fannie Mae and Freddie Mac."
Of course, as Barack Obama has pointed out, McCain's campaign is a virtual who's who of former lobbyists for Fannie and Freddie.
But another McCain adviser has close personal ties to one of the industries that, like Fannie and Freddie, spent too long assuring the public that the housing market was in good health, and thereby forestalling efforts that might have protected homeowners and staved off a crisis.
Nancy Pfotenhauer, a senior economic adviser to McCain, has been all over the airwaves in recent days touting McCain's decision to "suspend" his campaign over the bailout. But her husband, Kurt Pfotenhauer, worked until late last year as the top lobbyist for the Mortgage Bankers Association, a trade group that in recent years downplayed fears of a housing bubble, only to be proved spectacularly wrong.
When MBA released a report in 2005 on the state of the housing market, its chief economist told reporters: "There are risks but they're far less dramatic than the hyperbole of recent months." An MBA vice president added: "We're trying to dismiss the overheated rhetoric on bubbles." Part of the purpose of the ho-hum rhetoric, it would appear, was to discourage government regulators from looking more closely at the problems in the market, and ultimately taking action to protect homeowners. And many experts blame that regulatory inaction in the housing market for the current financial crisis now shaking the country.
Since January, Kurt Pfotenhauer, who did not immeduately respond to a detailed request for comment, has served as the CEO of the American Land Title Association, a trade association representing the title insurance industry. But during the current crisis, his old employer, MBA, has been at the center of lobbying efforts -- successful it appears -- to oppose a provision, sought by Democrats, that would allow bankruptcy judges to modify mortgages on primary residents. The lending industry has long fought such measures, arguing that it would force lenders to increase mortgage rates. In a statement issued yesterday, the MBA asserted that the provision "would throw into question the value of the collateral that backs every mortgage made in this country -- the home." According to one Democratic lobbyist, MBA's current top lobbyist, Francis Creighton, has lately been "living in the halls" of Congress in an effort to influence lawmakers on the bill.
Allies of Kurt Pfotenhauer have lately been willing to tout his ties to the McCain campaign, through his wife, to bolster his professional credentials. An advanced notice of a speech Kurt was to give last week to the Indiana Land Title Association (ITLA), an ALTA affiliate, published in an Indiana newspaper and seemingly written by the ITLA, noted that he would "provide a public policy update from the nation's capital, with an emphasis on the housing and mortgage finance crisis." It added: "His wife, Nancy, is a senior advisor and national spokesperson for presidential candidate John McCain."
Of course, there's no reason why Nancy Pfotenhauer's career should be limited by her husband's lobbying work. But at the very least, Kurt Pfotenhauer's recent role as an advocate for banking interests that discouraged regulators from paying closer attention to the problems in the housing market raises questions about the backgrounds of the advisers John McCain surrounds himself with -- especially in light of the recent populist turn of his campaign rhetoric.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (48)Topics:
Alaska
Alaska AG Files Suit to Quash Subpoenas
The national press may have mostly left Alaska, but the legal maneuvering over Trooper-Gate continues. Yesterday, Attorney General Talis Colberg filed suit to throw out the subpoenas issued to witnesses in the legislature's investigation.
Colberg, who was a little-known assemblyman and private-practice lawyer until Palin tapped him for the AG job, argued that the Senate Judiciary Committee lacks the authority to issue subpoenas. Since early September, the Palin camp has maintained that the state personnel board, whose members are appointed by the governor, is the only appropriate body to conduct an investigation -- though that claim would appear to hold little water.
The list of witnesses currently defying subpoenas includes Todd Palin, and several of the governor's key aides. Nonetheless, the legislators running the probe have said that independent investigator Steve Branchflower will wrap up his report by October 11 and release a report soon after.
In response to Colberg's move, Sen. Hollis French, the Democrat overseeing the legislature's probe, told the Anchorage Daily News: "For over 200 years, legislatures have exercised their right to oversee the activities of the executive branch. Denying us that authority undermines the basic democratic process."
A separate lawsuit filed by five Alaska legislators aims to stop the investigation, which was initiated by a 12-0 bipartisan vote, entirely.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (9)Topics: Alaska, Sarah Palin, Todd Palin, Trooper-Gate
The Daily Muck
The Daily Muck
Sen. Ted Stevens (R-AK), currently on trial for accepting gifts from powerful oil company VECO, netted more than $238.5 million in earmarks for Alaska this year, narrowly edging out Sen. Thad Cochran (R-MS) as the top-scoring politician. In his four decades in the Senate, 84-year-old Stevens has built a reputation for steering funding his state's direction, earning the nickname "Uncle Ted." The ranking, compiled by the non-profit Taxpayers for Common Sense, showed that the special-interest spending included $2 million on a study about hibernation as treatment for battlefield trauma. (Wall Street Journal)
Alaska Gov. and GOP Vice Presidential candidate Sarah Palin returned campaign contributions yesterday after media reports circulated that linked the money to corrupt state legislators, such as the recently indicted state senator John Cowdery. Today, the Washington Post reports that Palin accepted more than $25,000 in gifts while governor from mining and other lobbying interests, including a $1,200 gold-nugget pin. In the 2006 governor's race, Palin campaigned on ending government corruption and special interest dealings. (AP and Washington Post)
Sarah Palin (R-AK) will not release her financial records until the day after her first vice-presidential debate, almost two weeks after the original due date. The Federal Election Commission granted the extension after the Palin campaign said it was confused about the deadline and needed more time. Biden filed the paperwork last week. (AP)
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (4)Topics: The Daily Muck
John McCain
Two NRA Lobbyists Working for McCain; Do They Violate Campaign Rules?
Looks like Rick Davis isn't the only lobbyist problem the McCain camp is dealing with these days.
Mother Jones reports that two actively-registered lobbyists are currently working on John McCain's campaign for president.
Wayne Berman, co-chairs McCain's national finance committee. James Jay Baker co-steers McCain's National Steering Committee of Sportsmen for McCain. Both work for the lobbying firm, Ogilvy Government Relations as managing directors.
This month, the NRA -- a client of Baker and Berman's -- launched attack ads against Barack Obama. MoJo points out that besides conflicting with McCain's claims for running a straight-shooting, non-lobbyist campaign, Berman and Baker's presence also could come into conflict with the actual campaign rules that banned active lobbyists from working full time for the campaign, or participating in 527s or groups that "oppose any presidential candidate."
From Mother Jones:
Asked whether he might be in violation of the campaign's conflict rules, Berman told Mother Jones, "Hmmm, I hadn't thought of that." He said he was currently lobbying for the NRA but not involved in the group's campaign activities. "I'm in full compliance with campaign policy," he maintained. "I will check over there....I will continue to be in compliance. If that requires me to make changes, I'll make them." He added, "You've done me a favor" by raising this issue.PERMALINK | COMMENTS | RECOMMEND RECOMMEND (13)
Topics: John McCain, Lobbyists, Rick Davis
Bailout
Davis Still an Officer at Lobbying Firm, Docs Show
We knew we hadn't seen the last news report on McCain campaign manager Rick Davis' ongoing ties to the lobby firm he founded, Davis Manafort.
Newsweek has taken a look at annual filings made by the company to the Virginia state government. Those filings, the most recent of which is from April of this year, list Davis as one of two officers and directors of the firm.
As the magazine notes, that information suggests that in recent days, the campaign "appear[s] to have overstated the extent to which Davis had severed his relationship with his lobbying firm." A statement posted on the McCain campaign website by a spokesman Wednesday morning -- in response to reports that Davis's firm was being paid by the home-loan giant Freddie Mac as recently as this month -- asserted that Davis "separated from his consulting firm, Davis Manafort, in 2006." And a campaign spokeswoman wrote in an email to Newsweek Tuesday that Davis "left" the firm that year.
Of course, the fact that someone is listed as an officer on a corporate filing doesn't prove that he was involved in the day-to-day running of the company during the period in question. But Newsweek's find will certainly keep the heat on Davis, who yesterday skipped lunch with reporters, at a time when McCain would prefer the focus to be on his own efforts, belated and vainglorious as they may be, to help avoid a financial meltdown.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (6)Topics: Bailout, John McCain, Rick Davis
The Daily Muck
The Daily Muck
The FBI yesterday released new evidence in their prosecution of Bruce E. Ivins, who is accused of sending the 2001 anthrax mailings, presenting an e-mail and more details about his conduct in the lab. The case, which began in 2001, has come under attack for failing to conclusively link Ivins to the anthrax attacks. Ivins committed suicide in July. (Washington Post)
Investigation of troubled insurance giant American International Group began in March, prompted by the company's record losses in Feb. The probe, one of 25 currently in process, is meant to determine if company leaders misrepresented their holdings to the public. This month the federal government funneled $85 billion to AIG, which has faced federal investigation in the past, to prevent the firm from going bankrupt. (Washington Post)
The House ethics committee yesterday initiated a formal investigation of Rep. Charles Rangel (D-NY), who has been accused of a range of abuses, including misusing the House's garage to store an old car and questionable real estate dealings. The allegations have led to calls that Rangel resign from the powerful Ways and Means Committee, which he chairs. Last week Rangel maintained his innocence and invited the committee to look into his affairs. (The Hill)
Topics: The Daily Muck
Ted Stevens
Opening Statements Start In Ted Stevens' Trial
The trial of Sen. Ted Stevens has officially begun, with attorneys making their opening statements at 9:30 this morning to the jury of mostly white-collar professionals.
It has been just under two-months since the sitting senator was indicted on seven counts of false statements for allegedly lying on his financial disclosure reports on gifts he received from the oil pipeline company, VECO. Stevens demanded a speedy trial and attempted to have the case moved to Alaska in part to accommodate his ongoing re-election campaign in Alaska. District Court Judge Emmet Sullivan complied with a quick court date, but declined to move the trial out of the jurisdiction in which the charges were filed -- Washington, D.C.
Among the witnesses scheduled for today, is John Hess, a former VECO engineer whose initials are on the renovation plans to Stevens' home, the Anchorage Daily News reports.
The star witness in the case is former VECO CEO Bill Allen. In attempts to discredit Allen, Stevens' attorneys have requested his medical history and recently alleged in court filings that Allen is receiving a windfall of $40 million for his cooperation with the case, a charge which has been disputed in subsequent filings.
Stevens own appearance on the stand has been the subject of much debate, with Stevens saying he intends to testify but will follow the advice of his lawyers.
We'll be bringing you updates throughout the day on this historic trial, so stay tuned.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (4)Topics: Alaska, Bill Allen, Ted Stevens, Veco
Guantanamo
Gitmo Prosecutor Quits Over Lack of Due Process
A prosecutor in the trial against a prisoner who is on trial for war-crimes, has quit the case because of concern over the defendant's lack of due process, defense attorneys claim.
Lt. Col. Darrel Vandeveld filed a four page declaration stating that "potentially exculpatory evidence has not been provided" to the defense.
The prisoner, Mohammed Jawad, has been awaiting trial since his arrest in 2002 for attempting to commit murder for allegedly throwing a grenade into a jeep filled with troops. A judge recently set his trial for December.
From the Los Angeles Times:
"He was uncomfortable being a prosecutor under the conditions, and [his superiors] told him to do his job," [Michael] Berrigan [deputy chief defense counsel for the commissions] said, adding that Vandeveld then took his concerns to higher authorities but was rebuffed.Both defense lawyers said Vandeveld had spelled out his allegations in the sealed affidavit. Vandeveld said in his declaration that prosecutors knew Jawad may have been drugged before the attack and that the Afghan Interior Ministry said two other men had confessed to the same crime.
The lead prosecutor has denied that "ethical qualms" with the trial were behind Vandeveld's motives, describing him as a "disgruntled" prosecutor "who was disappointed that his superiors did not agree with his recommendations in the case."
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (18)Topics: Guantanamo
Torture
Condi Admits White House Role in CIA Interrogation Talks
In a big admission from the Bush White House, Condoleezza Rice has admitted to Senate investigators that senior administration officials met repeatedly between 2002 and 2003 to discuss the CIA's use of harsh interrogation methods on detainees.
In written statements to Senate investigators looking into the use of torture against detainees, Rice gives new details about administration members who were involved, and their consideration of a military training program, SERE (Survival, Evasion, Resistance and Escape) to be used in interrogation.
From the L.A. Times:
In particular, Rice wrote in the Sept. 12 statement that officials discussed simulated torture techniques that elite U.S. soldiers were subjected to as part of a survival training program, and that she and other officials were told that such methods "had been deemed not to cause significant physical or psychological harm."PERMALINK | COMMENTS | RECOMMEND RECOMMEND (11)Rice, who was serving as national security advisor at the time of the discussions, did not identify the source of that assertion. She was referring to a U.S. military program known as Survival, Evasion, Resistance and Escape, or SERE, which at times has included waterboarding and other controversial methods subsequently employed by the CIA.
. . . Rice did not disclose who at the meetings, but said that she had "asked Atty. Gen. [John] Ashcroft personally to review and confirm the legal advice" being prepared by the Department of Justice on the CIA's interrogation plans.
Other senior officials who routinely attended so-called principals meetings included then-Defense Secretary Donald H. Rumsfeld; Alberto R. Gonzales, then the presidential counsel; and David S. Addington, the vice president's counsel.
Topics: Condi Rice, Torture
Nancy Pelosi
House Dems' Bailout Plan
A source just sent us a copy of the working draft of the bailout plan circulating, as of about two hours ago, in the House.*
Based on our quick look, it includes a strong provision for congressional oversight, limits executive pay, and would allow bankruptcy judges to adjust mortgages in order to help homeowners, among other items. In other words, the major Democratic priorities.
Things have been changing so quickly on the Hill -- even before McCain's dramatic announcement -- that there's no telling what's occurred in the intervening period.
The source, who's a well-connected Democratic lobbyist, added in an email to TPMmuckraker that "the deal on the "bail out" is 98 percent done. Treasury has capitulated on almost every point. A draft is circulating on the Hill now. No one needs McCain to help do the remaining 2 percent."
Late Update: As we should have mentioned earlier, the draft plan also contains a provision designed to "maximiz[e] taxpayer benefits" by requiring that the Treasury "obtain warrants" (i.e. stock futures) if it makes a direct purchase of a company. That's intended to ensure that taxpayers get a share of any future profits, and it's another element Democrats have been insisting on.
*Ed. Note: A well-placed Hill source subsequently tells us that this version has actually been circulating for a couple of days, and that while it's still mostly operative, it is not the latest iteration of the alternative to the Bush plan.
Topics: Bailout, John McCain, Nancy Pelosi
John McCain
Questions Linger on McCain Campaign Manager Tied To Freddie Mac
Last night, The New York Times -- followed by a slew of other outlets -- reported that the lobbying firm of Rick Davis, John McCain's campaign manager, has been collecting $15,000 from mortgage giant Freddie Mac. On Monday, The Times had reported that Davis had been paid to run Freddie Mac's advocacy group, the Homeowner's Alliance, until 2005.
But there's a set of questions that still remain unanswered.
The McCain campaign told the Times that Davis had stopped taking a salary from the firm, Davis-Manafort, by the end of 2006. (Davis took a leave of absence from the firm to work on the campaign.) But the Times points out that, as an equity holder, Davis continues to benefit from his firm's income.
But it's unclear exactly what the Times means by that.
Let's stipulate, first of all, that since Davis is an equity holder, he has a long-term interest in Davis-Manafort's success. The McCain camp hasn't disputed that.
But could Davis be benefiting in a more direct sense?
For instance, could Davis' agreement with Davis-Manafort allow for his share of profits to simply be deferred until he rejoins the firm? Nothing that the McCain camp has said on the subject -- including this lengthy response to the Times story from the campaign's in-house blogger -- has ruled that possibility out.
We also know that in 2007, the McCain campaign did not have Davis on the payroll, and was paying Davis Manafort for "consulting" services. Did none of that money make its way back to Davis?
It's also worth noting that the McCain camp hasn't offered any backing for its claim that Davis did indeed stop getting paid by his firm in 2006. The campaign declined a request from TPMmuckraker to provide such backing.
The bottom line is that none of the reports have fully fleshed out Davis' relationship worth Davis Manafort, and how his compensation agreement actually works.
Seems like that might be worth looking into.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (3)Topics: John McCain, Rick Davis
BMW
BMW Direct Re-Surfaces With Ties to Anti-Obama Ads
Remember BMW Direct, that sketchy direct mail company that raised money for down ballot candidates, but kept most of it in "fees"?
Well, they're back.
This morning, the New York Times ran a story mentioning BMW Direct, whose COO is also chairman of the Freedom's Defense Fund -- a PAC which has been running ads with "racial overtones" in a pivotal swing county in Michigan.
Well here at TPMmuckraker, we've been talking about BMW Direct and its office-and- employee-sharing PAC since early July:
BMW Direct, a direct-mail fundraising firm, has been raising money for groups called Freedom's Defense Fund and The Madison Project.It's not clear what Freedom's Defense Fund supposedly does. It shares an address at the same office as BMW Direct. It does not appear to have a Web site.
So we already knew that Michael Centanni was working overtime to be Chief Operating Officer of BMW Direct while he was holding down a job as the chairman of the Freedom's Defense Fund, but we weren't quite sure what it was that the FDF did exactly.
Well, it looks like they're funding targeted, swift-boat like TV campaigns against Obama in the small swing county of Macomb, Michigan.
If Macomb seems familiar, that's because it's a highly visible battleground in a swing state. As the Times describes, Macomb is populated with "white, unionized auto workers who believe Democrats [have] abandoned them for, in part, the poor and African-Americans."
And just a few weeks ago, the county was thrust into the spot-light when the Macomb GOP chair told the Michigan Messenger they'd be using foreclosure lists as a way to challenge voters on election day.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (5)Topics: BMW, Barack Obama
John McCain
McCain Camp Won't Talk About Ersatz Trooper-Gate Probe
The McCain-Palin campaign is now refusing to answer questions about the one Trooper-Gate investigation they're cooperating with.
That's the investigation, of course, that's being conducted by the state personnel board, whose members are appointed by the governor.
Referring to the state's investigator, Timothy Petumenos, campaign spokeswoman Meg Stapleton told reporters Tuesday: "He has asked to keep things confidential, so we will respect those wishes."
The McCain-Palin camp's tight-lipped approach stands in contrast to its willingness to talk freely about the state legislature's independent investigation, which the campaign has refused to cooperate with.
In recent weeks, the campaign has sent a team of lawyers and PR pros to Alaska to badmouth the probe as politically motivated -- despite a bipartisan 12-0 vote to launch the investigation. McCain aides, including Stapleton, have publicly questioned the impartiality of Hollis French and Kim Elton, the Democratic legislators overseeing the investigation, as well independent investigator Steve Branchflower. They have disparaged the record of Walt Monegan, the veteran and widely respected former public safety commissioner whose firing is at the heart of the case. And they have argued that the legislature lacks jurisdiction to pursue the matter -- an argument that appears to have little legal standing.
It's also worth noting that CNN has been taken in a bit by the McCain camp's spin. The headline and lead two paragraphs of the CNN story fail to make clear that the investigation in question is the state probe -- which likely won't be completed until after the election, and is being overseen by state employees ultimately answerable to the governor -- rather than the independent investigation being conducted by the legislature. A CNN story from Monday fell into a similar trap.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (9)Topics: Alaska, John McCain, Sarah Palin, Trooper-Gate
The Daily Muck
The Daily Muck
Former New York City Police Commissioner Bernie Kerik's defense lawyer filed a motion in court yesterday to dismiss many of the charges against Kerik. Kerik's lawyer said that the 16-count indictment against Kerik violates rules and is generally unfair. Kerik, who is accused of accepting bribes, tax fraud, and making false statements, is due in court in January. (Newsday)
Jury selection continued yesterday for the trial of Sen. Ted Stevens (R-AK), with lawyers selecting 29 of 36 possible candidates they are required to consider before narrowing to 12. Stevens, a presence in the Senate for four decades, was indicted in July for lying about hundreds of thousands of dollars worth of gifts he had received during his tenure. Lawyers said they would conclude the process today and begin opening arguments Thursday, one day later than originally planned. (The Hill)
The FBI yesterday revealed 6 of the 24 financial institutions under investigation, naming mortgage giants Fannie Mae and Freddie Mac, insurer AIG Inc., and Lehman Brothers Holding Inc. among them. The probe, which begins as lawmakers hammer out details of the $700 billion bailout, will examine company leadership and attempt to determine if they misled the public about their holdings. (AP)
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (5)Topics: The Daily Muck
Bill Allen
Stevens' Defense: Allen Gets $40M for Cooperation
Attorneys for Sen. Ted Stevens are doing their best to discredit Bill Allen, the former VECO CEO and key witness in the government's prosecution.
In documents filed yesterday, the defense claimed that Allen would receive a windfall of $40 million in return for his cooperation with the investigation.
"Defense counsel have recently learned that Mr. Allen stands to gain an additional $40 million of a total of $70 million in 'hold back' cash from the sale of Veco to CH2M Hill if he continues to cooperate with the government and if Veco continues to avert indictment," court documents filed Monday said.
But CH2M, the company that acquired the VECO from Allen, rebutted Stevens' attorneys' claims stating that the defense "misconstrues the terms" of CH2M's agreement with Allen.
From court documents filed today:
The principal purpose of the holdback, which is a common provision in the context of typical acquisition transactions, is to cover CH2M HILL for undisclosed liabilities, such as those relating to tax, environmental, and human resources.PERMALINK | COMMENTS | RECOMMEND RECOMMEND (7)Use of the holdback in connection with a breach of Mr. Allen's cooperation agreement or an indictment of VECO is available only upon a showing of damages, and then only in the amount of the damages resulting from the event.
The Allen family's right to the holdback funds is not conditioned, as the defense suggests, on Bill Allen's cooperation or VECO not being indicted.
Topics: Alaska, Bill Allen, Ted Stevens, Veco
Voting
WI Attorney General Battles State Over Voter Registration Checks
As the presidential election nears, and Wisconsin proves itself to once again be a battleground state, J.B. Van Hollen, the state attorney general and co-chair of the Wisconsin McCain campaign, is raising the specter of voting fraud.
Van Hollen filed suit earlier this month, against the state Government Accountability Board (GAB) which oversees elections in Wisconsin, demanding that they verify all of the voter registrations made since January 2006 against a new state database created under the federal Help America Vote Act (HAVA) -- a Herculean task that the board had decided to forgo with just six weeks to go until the election.
The GAB claims to be in full compliance with HAVA, stating that retro-active voter registration checks through the database are not mandated by federal law.
The database compares registration data with drivers license records. It just got up and running in Wisconsin a few weeks ago, but the program seems to still be working out the kinks -- one of the reasons the GAB is hesitant to hold the database accountable for validating registrations.
"In its deliberations, the Board was concerned about preliminary data that
showed more than a fifth of voters' data mismatched due to variations in names,
differing data entry standards, or typographical errors," a GAB press release responding to Van Hollen's suit said. "A check conducted of GAB members' data resulted in four of six Board members' information mis-matching."
The result, state Democrats say, would be widespread disenfranchisement and suppressed voter turnout. They claim Van Hollen's demands for database checking are motivated by his role in the McCain campaign, an allegation Van Hollen has denied.
"There was no discussion with anybody involved in leadership with the Republican Party (or the McCain campaign) about this lawsuit before it was brought," Van Hollen said last Thursday.
But yesterday, the Wisconsin Republican Party chairman came forward to say he had multiple conversations with Van Hollen's deputy attorney general, Ray Taffora, specifically discussing the handling of the lawsuit, the Wisconsin State Journal reported. The Friday before, another Department of Justice attorney in the lawsuit admitted meeting with Republican Party representatives in the week before the suit was filed.
The Dane County Court will hear motions for the case tomorrow, including a motion to disqualify Van Hollen. The attorney for the GAB argues that because Van Hollen represents the state, and the GAB is a state entity, Van Hollen cannot sue a party he represents. Both the Democratic and Republican parties of Wisconsin have filed motions to intervene in the lawsuit.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (27)Topics: Voting
Alaska
AK Lawmakers Fire Back on GOP Bid To Shut Down Trooper-Gate Probe
The Alaska lawmakers overseeing the Sarah Palin Trooper-Gate investigation have hit back at the GOP-led effort to shut down the probe.
Last week, Republican legislators filed suit to halt the investigation, arguing that it had been inappropriately politicized by Democratic senators Hollis French and Kim Elton. This afternoon, Peter Maassen, an attorney representing French and Elton, as well as independent investigator Steven Branchflower, announced in a press release that he will be asking a judge to throw out that lawsuit.
The press release points out that the investigation was launched in July after a 12-0 bipartisan vote of the legislative council. And it asserts that the original GOP complaints "suggest that Alaska legislators with open political views should be prohibited from participating in any legislative function that might -- might -- reflect badly on Governor Palin."
The release refers to "powerful and increasingly heavy-handed national interests" as being opposed to the investigation's continuance.
And in a bid to fight back against Republican efforts to remove French from his position overseeing the probe, the release adds: "The legislature is allowed to decide for itself what it will investigate, who it will employ as investigator, and which of its members will oversee the investigation."
Maassen is with the Anchorage-based firm Ingaldson, Maassen & Fitzgerald.
It appears all but certain that the investigaiton will go forward, and that Branchflower will release a report on or aorund October 11th, as scheduled. However, it's unclear how comprehensive the report will be, thanks to efforts by the McCain-Palin campaign to ensure that Branchflower won't be hearing directly from several key witnesses, including Sarah and Todd Palin.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (11)Topics: Alaska, John McCain, Sarah Palin, Trooper-Gate
Bailout
Conservative GOPers Release Alternative Plan on Financial Crisis
The Republican Study Committee (RSC), a faction of small-government House conservatives led by Rep. Jeb Hensarling of Texas, has released an alternative plan for dealing with the Wall Street crisis, in opposition to the $700 billion bailout being proposed by the Treasury Department.
The stripped-down plan advocates a two-year suspension of the capital gains tax and calls for pull privatization of Fannie Mae and Freddie Mac, which were taken over by the federal government earlier this month.
The RSC's opposition to the bailout -- coupled with concern among progressive Democrats that the measure doesn't do enough to help homeowners -- could complicate efforts by House leaders to quickly pass legislation.
According to The Hill, the RSC argues that the bailout plan "fundamentally alters the nation's free-market system in that it broadly socializes firms' money-losing mortgage assets and places the U.S. on a slippery slope whereby profits will also be nationalized."
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (4)Topics: Bailout
Dick Cheney
Cheney Heads to Hill to Quell Republicans
From FoxNews.com:
The White House dispatched Vice President Dick Cheney to Capitol Hill Tuesday morning to help shore up support for the financial bailout of Wall Street.PERMALINK | COMMENTS | RECOMMEND RECOMMEND (9). . . House conservatives are seething about the "big government" approach that they say President Bush is taking in the financial crisis. They don't like how much power it cedes to the Treasury or the price tag.
"[Cheney] is going to walk into a firing squad. I hope he brought his hunting rifle," an aide to one House conservative told FOX News.
Topics: Bailout, Dick Cheney
Ted Stevens
Stevens' Request to Attend to Senate Business Could Give Jury "Negative Impressions," Judge Warns
With Congress working around the clock to stave off the collapse of the U.S. financial market, indicted Sen. Ted Stevens (R-AK) doesn't want his constituents to think he's not representing them in the midst of crisis.
So even though Stevens is in a crisis of his own -- the federal trial to determine whether he failed to report over $250,000 in gifts and home repairs on his financial disclosure forms began yesterday -- he asked permission from the judge to be excused from courtroom appearances so he can attend to Senate business on the bailout.
Judge Emmet Sullivan warned Stevens and his attorneys that this might give the jurors the idea that Stevens didn't care about his trial.
"We don't want to have any negative impressions going on," Sullivan told Stevens, according to an article by The Hill. "People reach the wrong impressions for the wrong reasons."
From the AP:
Being absent as Congress considers a historic $700 billion bailout of the financial market could make it look like the corruption charges have made it impossible for Stevens to do his job.PERMALINK | COMMENTS | RECOMMEND RECOMMEND (8)Prosecutors didn't oppose Stevens' plan to leave court but they said Stevens shouldn't be able to use the crisis to cast himself as a dedicated senator in front of jurors. The judge said Stevens could leave court but jurors would not be told why.
Topics: Alaska, Ted Stevens
The Daily Muck
The Daily Muck
Former acquaintances of Veco CEO Bill Allen came up yesterday as possible witnesses in Sen. Ted Stevens (R-AK) federal trial. The witnesses, one of whom is an underage woman alleged by some to have had a sexual affair with Bill Allen, are intended to diminish Allen's credibility as a witness against Stevens. Stevens' lawyers have also been able to successfully acquire Allen's medical records in hopes of further undermining Allen's testimony. (McClatchy/AP)
Over $13 billion dollars from the American government meant for Iraqi reconstruction projects has been wasted or stolen according to a former Iraqi official. The former official told the Senate Democratic Policy Committee yesterday that although a report on the subject was sent to Iraqi Prime Minister Nouri al-Maliki, there was never any follow up. A separate Iraqi agency has estimated that $9 billion has gone missing. (Washington Post)
Political contributions from the financial sector have the potential to shape the final bailout plan, the L.A. Times reports this morning. Gifts from financial companies outstrip donations by other groups, including lobbyists, by nearly a factor of two. In addition to contributions to the presidential candidates -- $22.5 million to Obama and $19.6 million to McCain -- the industry has given heavily to members on the committees in charge of the legislation. (LA Times)
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (6)Topics: The Daily Muck
Nancy Pelosi
Source: Pelosi Focusing Bailout Plan on Exec. Pay, Bankruptcy
According to a senior House staffer, Speaker Nancy Pelosi is likely to insist that any Wall Street bailout bill contain two specific items from the Democrats' wish-list: limits on executive compensation, and a measure to protect homeowners by allowing mortgages to be renegotiated in bankruptcy proceedings.
Things may not go smoothly on those fronts, however. House Republicans have signaled their firm opposition to executive pay limits. And the Blue Dogs, a faction of fiscally conservative Democrats, may be "uncomfortable" with changing bankruptcy laws, said the staffer.
There are a number of Democratic proposals circulating right now aiming to attach strings to the Treasury Department's $700 billion Wall Street package.
In the Senate, the draft legislation being offered by Banking Committee chair Chris Dodd appears, which would give the federal government an equity stake when it helps banks with debt, (and which Paul Krugman describes as "a big step in the right direction) appears to be the most prominent.
But in the House, things are a bit more chaotic. Rep. Barney Frank, who chairs the Financial Services committee, has circulated his own proposal, which is slightly closer to the Treasury Department's own, though, like Dodd's, it aims to limit executive pay.
Rep. Brad Sherman this afternoon released to TPMmuckraker an outline of his own plan, which goes further than either Dodd's or Frank's.
And an unlikely coalition of conservative deficit hawks and liberal populists may be taking shape to oppose any bailout at all.
Pelosi's office did not immediately respond to a request for further information.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (6)Topics: Bailout, Nancy Pelosi
New Democratic Bailout Proposal
There are various plans being circulated right now by Hill Democrats, laying out alternative frameworks for a Wall Street bailout.
We just obtained one from Rep. Brad Sherman (D-CA), a member of the House Financial Services Committee. According to Sherman's press secretary, the congressman just presented this proposal at a meeting with other members.
Sherman's plan covers all of the major points that Democrats have been insisting on -- strong Congressional oversight of any agreement, limits on executive pay, protection for homeowners. It also adds some more provisions, including an economic stimulus, and a measure to make it easier and quicker for Congress to enact future corporate governance reform.
This morning, Rep. Sherman told The Hill, referring to the Bush administration's bailout proposal: "This is a bill for Wall Street, not a bill for Main Street."
He added: "Wall Street and the administration are going all out to tell constituents, 'Make your congressman vote for our bill, or your 401(k) [retirement plan] is toast.' "
Sherman's complete proposal follows after the jump...
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (8)Topics:
Bailout
GOP Financial Services Committee Member Strongly Opposes Bailout
Rep. Scott Garrett (R-NJ), a member of the House Financial Services and Budget Committees, is strongly opposed to the administration's plans to bail out Wall Street an aide confirmed to TPMmuckraker.
"There aren't any amendments that I have heard of that would make him turn around and support it," said Erica Elliott, Garrett's press secretary.
As Congress struggles to understand the implications of the Treasury Department's $700 billion bail-out solution proposed last Friday, there is considerable uncertainly on Capitol Hill about the alternative measures that will be proposed and where individual lawmakers stand.
"It really is a big ongoing conversation with a lot of different members," Elliott added. "Trying to get everyone together who says 'We don't like the $700 billion bailout, what do we like in place of that.'"
This afternoon, the House Republican Study Committee, of which Garrett is a member, held an emergency meeting to discuss alternative plans to the administration's proposal.
Earlier this morning, Garrett also stepped into the fray currently overtaking Capitol Hill, circulating an email with three attached articles by economists with bailout alternatives.
Last week, Garrett and Rep. Marcy Kaptur (D-OH) came across the aisle to call for the formation of a bi-partisan Select Committee on Bailouts to investigate the actions taken by the Federal Reserve and Treasury Department with regard to bailouts.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (8)Topics: Bailout
Ted Stevens
Ted Stevens' Trial Begins with Jury Selection
The trial of Alaskan Sen. Ted Stevens on seven counts of false statements begins today in Washington, D.C. Stevens, a seven term Republican, arrived in court this morning for jury selection. Opening statements are expected to begin either Tuesday afternoon or Wednesday morning.
The trial, which Stevens requested be as speedy as possible, is expected to last a month, ending shortly before the election. Originally, Stevens attempted to have the trial moved to Alaska, to accommodate his campaign for re-election. The motion was overruled, but the judge has stated that the trial will recess for Fridays, to allow the sitting Republican time to return to the campaign trail in Alaska.
Potential witnesses in the trial include Stevens himself, as well as former-VECO executive Bill Allen. Democratic Senators Ted Kennedy (MA), Patrick Leahy (VT) and Daniel Inouye (HI), as well as Sen. Orrin Hatch (R-UT) and former Secretary of State Colin Powell were also listed to jurors as possible witnesses this morning.
Stevens pleaded not guilty to making false statements on his financial disclosure forms relating to gifts he received from Allen for renovations on his home in Girdwood, Alaska, among others. Between 1999-2006 he accepted gifts from VECO, include substantial amounts of material and labor in his private residence. These allegations include addition of new first floor, new bedrooms and bathrooms, a grill, as well as failing to report other gifts, such as a $29,000 bronze statue of a fish. The total amount of gifts is valued at over $250,000.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (7)Topics: Alaska, Bill Allen, Ted Stevens, Veco
Alaska
Trooper-Gate: For Now, GOP Mission Accomplished
As the flurry of news breaks over the Trooper-Gate investigation slows, at least for the time being, it's worth making a point that may have gotten lost in the shuffle:
The McCain-Palin camp appears to have been successful in its all-out effort to stifle the probe at any cost.
By preventing Steve Branchflower, the independent investigator in the case, from speaking with many of the key witnesses -- including Sarah and Todd Palin, and several of the governor's top aides -- the McCain campaign has severely limited the amount of information the investigation will have access to.
In the view of the Associated Press: "Although the Legislature's investigator still plans to issue a report in October, the probe is effectively killed until January, when Sarah Palin will either be vice president or return to the governor's mansion in Juneau."
That assessment may turn out to go too far. Branchflower has succeeded in questioning several of the witnesses, including Walt Monegan, the former public safety commissioner whose firing is at the center of the case, and John Bitney, formerly a top Palin aide. Branchflower also has access to the cell phone records of Frank Bailey, the Palin aide who earlier this year was recorded pressuring a trooper official about Mike Wooten. So it's possible that his report, even lacking input from crucial players, may yet prove damaging.
Palin may also pay a political price for her abrupt shift from pledging co-operation to out-and-out stonewalling. Over the weekend, the LA Times reported that Palin's "political capital at home is eroding," as a result of the hardball tactics used to stop the probe -- a subject we got into on Friday. If nothing else, her stonewalling -- along with the slew of reports about Palin's checkered record on seeking federal earmarks -- has significantly complicated the McCain-Palin campaign's effort to present her as a reformer who will help bring a more accountable form of government to Washington.
Still, it's hard not to conclude, at least for now, that the McCain camp has used its muscle to significantly limit the damage that Trooper-Gate could do to Palin. Which doesn't exactly bode well when it comes to the approach a McCain White House might take on issues of openness and transparency.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (29)Topics: Alaska, John McCain, Sarah Palin, Todd Palin, Trooper-Gate
The Daily Muck
The Daily Muck
An Alaskan road that would have connected the small Gravina Island to the infamous and non-existent Bridge to Nowhere has been opened. The road, built with $25 million in federal tax dollars, was pushed by Gov. Sarah Palin's (R-AK) administration despite sizable opposition. Palin has highlighted her supposed opposition to the Bridge to Nowhere on the campaign trail for the vice presidency. (AP, Pro Publica)
Vice President Dick Cheney was ordered by a federal judge Saturday to preserve records of his time in office. Lawyers for the Bush administration had attempted to curtail Cheney's responsibilities under the Presidential Records Act, arguing in part that Cheney is not covered by the law as he is not in the executive branch. The decision follows a suit filed by Citizens for Responsibility and Ethics in Washington. (AP)
Sen. Ted Stevens' (R-AK) federal corruption trial begins this week with jury selection starting today. On Friday, Stevens said that he plans on testifying at his trial if his lawyers approve. Stevens also has a busy week ahead of him in Congress where he will have to defend his roughly $215 million in earmarks in the new defense bill. (Anchorage Daily News)
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (5)Topics: The Daily Muck
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