Rod Blagojevich

Report: Feds Secretly Taped Blagojevich

Zachary Roth | December 5, 2008, 5:19PM

Federal agents recently worked with one of Rod Blagojevich's closest former aides to secretly tape the Illinois governor as part of a wide-ranging probe into corruption in his administration, reports the Chicago Tribune.

Says the paper:

The cooperation of John Wyma, 42, one of the state's most influential lobbyists, is the most stunning evidence yet that Blagojevich's once-tight inner circle appears to be collapsing under the pressure of myriad pay-to-play inquiries.

Wyma has made frequent appearnaces in the scandal. Adds the Tribune:

Indeed, Wyma's and the Blagojeviches' relationship has always been both personal and professional. The governor routinely reported exchanging personal gifts and often appeared at Wyma-sponsored fundraisers where Wyma's clients hobnobbed with the governor before turning over checks for his campaign fund.

Blagojevich, who will decide on Barack Obama's replacement in the U.S. Senate, has been under federal scrutiny for over three years, but has not been formally charged with wrongdoing.

Norm Coleman

Coleman's Office Won't Say Whether He's Under Investigation In Kazeminy Case

Zachary Roth | December 5, 2008, 3:32PM

Is Norm Coleman under investigation in connection with the claims made in a lawsuit alleging that a longtime supporter, Nasser Kazeminy, used an insurance company that employs Coleman's wife to illegally pass money to Coleman?

Could be...

Last month, a Minnesota good-government group sent letters to the FBI and the Senate ethics committee, calling on both to investigate the charges. Coleman quickly responded by declaring in a statement:

I not only welcome such an investigation, but I am eager to have it move forward immediately.

That forthright response made us wonder whether Coleman -- who currently is locked in a knife-edge recount with Democrat Al Franken to hold onto his Senate seat -- might already have been contacted by investigators, and was trying to get out ahead of the news by appearing to welcome a probe.

Both the FBI and the ethics committee have declined to provide any information about whether they're looking into Coleman.

So we've been calling Coleman's office to ask whether he's heard from investigators. In fact, in the last few weeks, we've left at least ten detailed voicemail messages for Leroy Coleman, the senator's Washington press secretary (and no relation) asking exactly that question. And we've received no response whatsoever.

Which is sort of curious. You'd assume that, had Coleman not been contacted, his press secretary would take 30 seconds to call us back and tell us that.

Draw your own conclusions...

Department of Homeland Security

Homeland Security Official Arrested For Hiring Illegals

Zachary Roth | December 5, 2008, 1:35PM

A top homeland security official has been accused in federal court of hiring multiple illegal immigrants as cleaners for her home, reports the Associated Press.

Lorraine Henderson is the regional director of Homeland Security, Customs, and Border Protection. She is responsible for stopping illegal aliens from entering the U.S. through the port of Boston.

But, reports the AP:

[A]ccording to an affidavit, for several years Henderson employed a Brazilian housekeeper who was an illegal immigrant. She also allegedly hired two other illegal immigrants, even after fellow agents warned her it was against the law.

Henderson was arrested after one of the women wore a wire and recorded Henderson telling the woman to "be careful" because once you're deported, "you will never be back."

Henderson was arrested today and is expected to appear in court shortly.

Alberto Gonzales

Gonzo's Lawyer Quits Civil Case. Another Sign That Prosecutor Is Circling?

Zachary Roth | December 5, 2008, 12:35PM

It's looking more and more like prosecutor Nora Dannehy's investigation into the US Attorney firings has Alberto Gonzales in its crosshairs.

Earlier this week we reported that Dannehy had contacted the ex-AG in connection with the probe.

Now, we've been tipped to legal filings showing that Gonzales' lawyer, George Terwilliger Jr. of White & Case, is no longer representing Gonzo in a separate case, a civil suit alleging that law students were denied DOJ jobs thanks to illegal politicization at the department under Gonzales.

The filing, dated November 25, reads:

Please enter the withdrawal of George J. Terwilliger III as counsel in this case for Defendant Alberto R. Gonzales, pursuant to Local Civil Rule 83.6(b).

Beneath that, Gonzales has signed his name, giving his consent to the withdrawal.

The previous day, in a separate filing, Gonzales had officially introduced a new team of attorneys as replacements, it would appear, for Terwilliger.

Please enter the appearance of Vincent H. Cohen, Jr., Peter Taylor, Lisa Fishberg and the law firm of Schertler & Onorato, LLP, on behalf of Defendant Alberto R. Gonzales.

What does this have to do with the Dannehy investigation?

It would appear that the most obvious reason for Terwilliger to withdraw from the civil suit is to be able to devote additional time to Dannehy's more serious investigation into criminal wrong-doing.

That's certainly the opinion of the veteran Washington lawyer bringing the civil suit in question. Dan Metcalfe, a former DOJ official and now the executive director of the Collaboration on Government Secrecy at American University Washington College of Law, who brought the suit on behalf of the law students, told TPMmuckraker*: "I think it's quite fair to say that the most plausible explanation for what happened is that [Terwilliger] learned he was going to be otherwise occupied on Gonzales' behalf."

That would jibe with the news earlier this week that Dannehy has issued subpoenas through a grand jury -- it would be common practice at this point for targets in the investigation to receive letters from the prosecutor informing them that they are under investigation. And of course it would be in sync with our report that Dannehy appears to have contacted Gonzales or his lawyer in connection with the probe.

A call to Terwilliger was directed instead to Bob Bork Jr., a spokesman for Gonzales, who told TPMmuckraker: "I have no comment about anything to do with Mr. Gonzales' representation." Asked whether he could comment more broadly on the investigation, Bork repeated: "I have no comment about anything to do with Mr. Gonzales' representation."

Late Update: There's additional evidence that Terwilliger is feeling jumpy about the twin cases, and is anxious to draw a distinction between the civil suit and the possible criminal investigation. Within hours of a story being posted by the legal publication AM Law Daily incorrectly stating that DOJ was paying Gonzales' lawyers for their work on the Dannehy investigation, Terwilliger had posted the following comment on the site:

Please correct your story as it is plainly in error to report that the Justice Department is paying Judge Gonzales' legal fees in connection with the Inspector General inquiries. Those fees are a private responsibility. DOJ is reportedly paying fees at governement [sic] rates to another law firm in connection with a civil law suit in which Judge Gonzales has been sued in his individual capacity in connection with events in which he was involved, if at all, in his offical [sic] capacity.

The site quickly posted a correction.

* This sentence has been corrected from an earlier version.

Presidential pardons

Nadler Plans Constitutional Amendment To Curtail Pardon Power

Justin Elliott | December 5, 2008, 11:09AM

Rep. Jerrold Nadler (D-NY) plans to introduce a Constitutional amendment in the coming months to impose limits on the president's near absolute pardon power, he told an NYU-Harper's forum on justice in the post-Bush era Thursday night.

Nadler, who two weeks ago introduced a resolution demanding President Bush not issue 'pre-emptive' pardons of officials in his administration, said his amendment would bar presidents from pardoning members of their own administration for official acts. The president would retain the power to pardon the secretary of state for, say, beating his wife, Nadler said, but not for actions taken in an official capacity.

Nadler added he is considering adding a section limiting the pardon power in the final months of a presidential administration.

"This is something the Congressman thinks is very important, and it's a priority for him," Nadler spokesman Ilan Kayatsky told TPMmuckraker today. Kayatsky said Nadler's office is still doing planning and research on how to structure the amendment.

The president's pardon power is drawn from Article II, Section II of the Constitution, which states in part:

[The president] shall have power to grant reprieves and pardons for offenses against the United States, except in cases of impeachment.

Nadler's amendment would have to be passed by a two-thirds vote of both the Senate and the House and then be ratified by three-fourths of the states.

Charles Rangel

Report: Rangel Paid Son's Company For Shoddy Web Design

Zachary Roth | December 5, 2008, 10:27AM

Looks like the man who takes the lead in writing our tax code, Rep. Charles Rangel, could be in more hot water.

Rangel, the New York Democrat who chairs the House Ways and Means committee, already faces an ethics investigation into claims that he didn't pay taxes on income from a rental property and that he got a special deal on a group of Harlem apartments.

Now, Politico reports that, between 2004 and 2007, Rangel paid nearly $80,000 in campaign funds to a company run by his son, Steven Rangel, for two poorly designed websites that, according to an expert, should have cost no more than $900.

The payments to the company, Edisonian Innovative Works, are probably legal, says one campaign finance wonk, but "definitely wrong."

The quality of work on the web site does appear shoddy. Politico describes it as "slapped together in a hurry, intermittently updated and never spell-checked." The site notes:

An apologetic note near the top of the site warns readers that the page is undergoing "routine maintenace (sic)" and cautions that "much of our content is currently unavailable."

Another button urges visitors to "Give Contribuition [sic]."

According to FEC filings looked at by Politico, the sum paid by Rangel for this prodcutwas the most paid for web sites by any House member. And Rangel has not faced a competitive race for his Harlem seat in decades, meaning there would appear to be even less need to spend so much on a campaign website.

Politico adds: "Rangel's 2008 campaign site was designed and run by non-relatives for less than $25,000."

The Daily Muck

The Daily Muck

Natalie Sherman | December 5, 2008, 10:08AM

Some things don't change. The Bush administration has just 46 days before its time expires, but that isn't stopping it from running roughshod over Congress in an effort to loosen environmental regulation. The Interior Department issued a new rule Thursday that prevents Congress from blocking the use of federal land for mining and drilling. The law, invoked just five times since its creation in 1976, was used this summer to place a moratorium on mining and drilling on lands near the Grand Canyon. (New York Times)

The Chicago Tribune reports on U.S. involvement in the indiscriminate roundup and imprisonment in the Horn of Africa of 100 people, including 22 women and children, who fled Somalia last year. The "snatch-and-jail operation," conducted in the name of anti-terrorism, captured some militants, but most of the detainees have been released without charge. Kenya and Ethiopia led the program, dubbed "Africa's Guantanamo," but European diplomats, human-rights groups, and detainees say the C.I.A. and F.B.I. interrogated many of the captives. (Chicago Tribune)

Arizona GOP Rep. Rick Renzi pleaded not guilty Thursday to new charges brought against him alleging that he participated in an insurance scam. He has already been indicted for using his legislative position to engineer a land swap. The new charges accuse Renzi of bilking $400,000 from clients of his insurance company. (MSNBC)

Read more »

Don Siegelman

Justice Reopened Probe Of Siegelman Trial

Zachary Roth | December 4, 2008, 5:08PM

The Department of Justice has reopened an investigation into crucial allegations made by a whistleblower in the Don Siegelman trial, according to documents submitted last week by prosecutors in the case.

Siegelman, the Democratic former governor of Alabama, was convicted in 2006 on corruption charges. (He is appealing the conviction). The whistleblower, who works in the US Attorney's office in Alabama, has claimed that, during his trial, there were inappropriate contacts between members of the jury and the prosecution, including messages passed by jurors revealing that some jury members had developed a romantic interest in an FBI agent attached to the prosecution team.

A DOJ investigation of the claims, launched after the whistleblower came forward and carried out by two US Attorneys, concluded that no such contacts had occurred. But in a letter to Attorney General Michael Mukasey last month, Rep. John Conyers, whose judiciary committee has been looking into the issue, questioned the thoroughness of that probe, noting that investigators had not contacted the jurors themselves, or the federal marshals who allegedly passed notes between the jurors and the prosecution team.

In the recent court filing -- which responds to a filing made previously by Siegelman's defense lawyers in connection with his appeal -- prosecutors referred to that DOJ investigation, then added in a footnote:

Out of an abundance of caution, the Department of Justice recently reopened the investigation into this matter in response to concerns raised about the completeness of the investigation ... It remains the case that we are not aware of any improper contacts.

In other words, DOJ appears to agree that Conyers' concerns have merit, and has reopened the investigation into whether inappropriate contacts between jurors and the prosecution team did indeed occur. That could be good news for Siegelman as his lawyers seek to have his conviction thrown out on appeal.

Almost from the start, there has been evidence that the prosecution of Siegelman was politically motivated. Among other things, documents recently surfaced showing that the US Attorney on the case, Leura Canary -- who had recused herself because her husband is a GOP operative and Karl Rove associate who ran the campaign of Siegelman's opponent for governor -- continued to advise prosecutors on the case. DOJ has been notably unwilling to aggressively look into this and other evidence of politicization.

In a recent interview with TPMmuckraker, Siegelman accused Canary of "outrageous criminal conduct."

Bailout

Source: Senators Assume Bunning Placed Hold On Barofsky Nomination

Zachary Roth | December 4, 2008, 3:54PM

A Senate staffer has confirmed to TPMmuckraker that the hold placed on the nomination of Neil Barofsky to be inspector general for the bailout has now been removed.

Politico had reported the removal of the hold earlier today, as we noted.

So now the focus is squarely on the identity of the GOP senator who placed the hold. And it now seems pretty clear, as we suspected from the start, that it was Jim Bunning of Kentucky.

According to the Senate staffer we spoke to, senators are working on the assumption that Bunning was responsible. And the staffer described a highly semantic argument that a Bunning aide made when asked about the issue, which would appear to only add to the evidence that Bunning was responsible.

The staffer said that a Bunning aide, speaking to an aide to another senator, tried to make the argument that technically, no hold had been placed, because there had been no request for unanimous consent on the floor of the Senate. A "UC request" would need to be made before calling for a voice vote on the issue, and it's at that point that the hold would officially go into effect. But in this case, Chris Dodd, the chair of the banking committee, had already been informed by the GOP cloakroom that one GOP senator wanted a hold put on -- which was what prompted Dodd to issue the statement that first revealed the existence of the hold.

The culprit is under no obligation, the Senate staffer said, to ever come clean. So we may never get official confirmation -- and the more important fact is that a vote on Barofsky's nomination is now set to proceed, probably by tomorrow, according to the staffer.

But at this point, the mystery seems all but cleared up.

Alberto Gonzales

DOJ Won't Say Whether Prosecutor Has Submitted US Attorneys Report

Zachary Roth | December 4, 2008, 3:32PM

Is the Department of Justice going back on its word about a report on its investigation into whether crimes were committed in the U.S. Attorney firings scandal?

When prosecutor Nora Dannehy was appointed to run the probe, in the wake of another investigation by the department's Inspector General, it was reported that Dannehy was expected to provide Attorney General Michael Mukasey with a status report on her findings within around 60 days.

That timeline was confirmed by DOJ Inspector General Glenn Fine in testimony before Congress at the time:

REP. NADLER: Mr. Fine, it's been reported that Ms. Dannehy was appointed to special counsel, will make a preliminary report to the attorney general within the next two months. Do you know when this report will be made public?

MR. FINE: I think what it is is the status of the investigation at that point to the deputy attorney general or the attorney general to see where she is in the process.

...

I don't think it's sort of a formal report; I think it's more of a status report.

And it was reiterated a few weeks later in a letter from Mukasey to House Judiciary Chair John Conyers. Mukasey wrote:

As the Inspector General testified, Ms. Dannehy is expected to report on the status of the investigation to the Attorney General approximately 60 days after her appointment.

Now that 60-day deadline has come and gone. And DOJ won't confirm that any such report has been provided, instead referring us to a spokesman for Dannehy who wouldn't comment on the issue.

In other words, at first DOJ had been clear that it wanted a report submitted within 60 days. But now it won't even confirm that such a report has been submitted, or give any further information.

So is the department now going back on its requirement that Dannehy submit a report within 60 days? Is it exerting pressure to reduce the likelihood that details about Dannehy's progress -- like the fact that she's contacted Gonzales -- will slip out? What's going on?

A staffer for the House judiciary committee told TPMmuckraker that they haven't been able to get anythign out of DOJ either on whether Dannehy has submitted a report. A call to the Senate judiciary committee was not immediately returned.

We'll keep you posted as we learn more...

Bailout

Schumer: Barofsky Hold Removed

Zachary Roth | December 4, 2008, 12:53PM

Politico reports:

The anonymous hold on Neil Barofsky, the Bush administration's TARP special IG, was lifted late Wednesday, according to Chuck Schumer. That clears the way for (sic) quick voice vote on his nomination.

The government watchdog group POGO had also written on their website this morning that the hold had been lifted.

Still no confirmation on whether Kentucky GOPer Jim Bunning was behind it. But we've posted his photograph anyway.

Duke Cunningham

Who Did Mitchell Wade Finger? And How Much Does It Matter?

Zachary Roth | December 4, 2008, 11:35AM

On Monday we noted a court filing made recently by defense lawyers for Mitchell Wade, the Duke Cunningham crony who's about to be sentenced in connection with his role in bribery scandal that felled the GOP congressman.

In arguing for a lenient sentence, Wade's lawyers claimed that their client had helped prosecutors' probe "at least five other members of Congress" who were under investigation for "corruption similar to that of Mr. Cunningham."

The blogger and Cunningham expert Seth Hettena named Katherine Harris, the former Florida congresswoman, and Virginia Rep. Virgil Goode as two of those members.

And now Hettena says he's identified the other three: Sen. Dan Inouye (D-HI), Rep. Alan B. Mollohan (D-WV), and Rep. Jerry Lewis (R-CA).

Hettena told Marcus Stern, the former San Diego Union-Tribune reporter who broke much of the Duke Cunningham story and now writes for Pro Publica, that those identifications are based on "information I developed and confirmed with two sources with knowledge of the investigation."

But what does all this amount to? According to Stern, perhaps not much. He writes:

No charges have been filed against any of the five lawmakers, and there is no evidence of any current criminal investigations against any of them. Lewis, Goode, Mollohan and Harris have all come up in the case before and have all denied wrongdoing. As for Inouye, we have called his office for comment. (We'll update the post as soon as we hear back.)

Stern also give us a rundown on what we already know about the alleged involvement of all of these lawmakers:

Lewis, former chairman of the House Appropriations Committee, had been under investigation beginning in 2006 by the Office of the U.S. Attorney in Los Angeles. That case, which focused on Lewis' role in helping lobbyist Bill Lowery get earmarks for his clients (including Cunningham co-conspirator Brent Wilkes), is cold without any charges being filed.

Goode and Harris both were beneficiaries of a combined $78,000 in illegal campaign contributions from Wade and helped Wade in his efforts to get multimillion-dollar military intelligence contracts through earmarks.

But prosecutors have repeatedly said there was no evidence the two lawmakers knew the contributions were illegal and they are not the targets of any current investigations. Harris left the House to pursue a quixotic and failed bid in 2006 to win a seat in the U.S. Senate. Goode is awaiting a recount in his 2008 House race, with the initial tally showing he narrowly lost.

Mollohan received $23,000 in campaign contributions and gifts to a family foundation from Wade's company, MZM Inc., and another firm that did business with MZM, Hettena wrote in his blog on Monday, adding that in October 2002, MZM gave $20,000 to Mollohan's Summit PAC. The legality of those contributions has never been challenged.

The link to Inouye, set to take over the powerful Senate Appropriations Committee, is less clear but appears to involve the activities of one of Wade's co-conspirators, defense contractor Brent Wilkes, according to Hettena. There are no known allegations of misconduct against Inouye in connection with the Cunningham scandal.

But don't despair, fellow scandal junkies. Stern notes that a memo filed by prosecutors in the Wade case said that Wade had provided information for a "large an important corruption investigation" unrelated to the Cunningham matter.

Worth keeping an eye on...

The Daily Muck

The Daily Muck

Natalie Sherman | December 4, 2008, 9:45AM

The Texas Ethics Commission will hold a public hearing today to review the case of state Supreme Court Justice Nathan Hecht. Hecht, a Republican, is accused of receiving discounted rates in 2006 from the law firm Jackson Walker when he used the company to defend him before the Commission on Judicial Conduct for promoting the Harriet Miers nomination for the U.S. Supreme Court. Texas judges are forbidden from making public political endorsements. (Houston Chronicle)

Nevada Lt. Gov. Brian Krolicki, a Republican, was charged Wednesday with mismanaging a college savings fund when he was state treasurer." Krolicki, who has said he will challenge Senate Majority Leader Harry Reid in 2010, says the indictment is politically motivated. (USAToday)

Sixteen Indiana National Guardsmen sued defense contractor KBR Inc., a former Halliburton subsidiary, Wednesday for knowingly exposing its employees to toxic chemicals. Some of the plaintiffs now have health problems related to the exposure. This is not the first time the Houston-based company's treatment of employees has come to public attention. McClatchy reported Wednesday that a KBR subcontractor appears to be violating U.S. guidelines on human trafficking, living conditions, and pay in its treatment of 1000 Asian men it employs in Iraq. (AP)

Read more »

Burrowing

Looks Like We've Got Another Burrower

Natalie Sherman | December 3, 2008, 6:11PM

We've told you about the Bush administration's last-ditch efforts to help political appointees burrow into career posts in the bureaucracy -- where they can quietly affect government policy for years to come.

Well it looks like we've found another example.

A spokesman for the Department of Housing and Urban Development told TPMmuckraker today that Darlene Williams, who was appointed by President Bush in 2005 to the post of Assistant Secretary for Policy Development and Research, will return to a career post under the new administration.

Williams had joined the department in 2003 as General Deputy Assistant Secretary for Policy Development and Research, before shifting over in 2005 to become General Deputy Assistant Secretary for Administration. Both of these are career posts. Later that year, she was appointed by Bush to the higher-ranking political job she now holds.

That's slightly different from the usual burrowing dynamic, in which presidential appointees are new to the department. But it would appear to be burrowing all the same.

This is hardly the first sign of muck at HUD under Bush. Former HUD Secretary Alphonso Jackson was found in a 2006 inspector general's report to have urged staff members to favor friends of President Bush when awarding contracts. When Jackson resigned earlier this year, federal authorities were investigating whether he used his position to enrich himself and his friends.

As for Williams, she's drawn criticism from HUD workers and their union for leading a controversial office move, which is transferring members of the Policy Development and Research team into temporary cubicles while part of the office is renovated.

U.S. Attorneys

Probe Finds Ex-US Attorney Retaliated Against Whistleblower

Zachary Roth | December 3, 2008, 5:27PM

The Associated Press reports:

Former U.S. Attorney for Minnesota Rachel K. Paulose retaliated against a top prosecutor in her office who reported her for careless handling of classified homeland security reports, a watchdog agency said Wednesday.

In announcing a whistleblower settlement between Assistant U.S. Attorney John Marti and the Justice Department, the Office of Special Counsel said its investigation found that Paulose retaliated by taking steps to remove Marti as her first assistant. Marti accepted a demotion and returned to being an assistant U.S. attorney.

In a news release, OSC said: "Based on considerable evidence of intent, animus, and motive, OSC concluded that Ms. Paulose constructively demoted Mr. Marti."

Paulose had earlier been the subject of an Office of Special Counsel investigation into whether she'd discriminated against office employees, including allegedly using the words "fat," "black," "lazy" and "ass" in remarks to one employee.

Before that, Marti and three other top lawyers in Paulose's office had voluntarily demoted themselves to protest her Christian-influenced managerial style.

Since last year, Paulose has been an adviser to Attorney General Michael Mukasey at main DOJ.

Ted Stevens

Stevens To Ask For New Trial

Zachary Roth | December 3, 2008, 5:01PM

Looks like we may not have heard the last of Uncle Ted.

Politico reports:

Lawyers for convicted Sen. Ted Stevens (R-Alaska) told a federal judge today that they will soon file a motion seeking a new trial.

Stevens, who was defeated in a bid for a seventh full term, will ask Judge Emmet Sullivan to overturn his conviction on seven federal corruption counts for failing to disclose more than $250,000 in improper gifts.

Stevens' defense team raised numerous objections to the Justice Department's handling of his corruption trial, arguing that the government deliberately withheld potentially exculpatory information and witnesses during the proceedings.

A hearing is scheduled for next month in regard to claims by a witness that he was unofficially promised immunity by prosecutors in exchange for his testimony, and lied about it on the stand.

Several of Stevens' Senate colleagues have recently raised the possibility of asking President Bush to pardon the octogenerian lawmaker.

Curt Weldon

Ret. Gen. Barry McCaffrey's Solutions for Defense Solutions

Matt Berman | December 3, 2008, 4:49PM

Looks like our old friends at Defense Solutions are back in the news.

You remember them. They're the Pennsylvania-based defense company that retained former GOP congressman Curt Weldon -- who's currently under investigation for corruption in regard to his ties to his daughter's lobbying firm -- as a strategic advisor.

Weldon recently pushed deals on behalf of Defense Solutions between Russian and Ukrainian weapons suppliers and the Iraqi and Libyan governments. Brokering such deals is legally murky, according to Wired magazine, because Libya and the Russian arms export agency are on U.S. blacklists.

And Defense Solutions' CEO, Tim Ringgold was accused by a Ukrainian government official of forging his name on a signed letter officiating that deal.

So we were interested to see the company make a special appearance this weekend in the long New York Times story on Ret. Gen. Barry McCaffrey's myriad conflicts of interest.

McCaffrey, the Times reports, was hired by Defense Solutions on June 15, 2007 to advocate for a similar arms deal. But he didn't mention that affiliation, says the Times, when he wrote a letter to General David Petraeus "strongly recommending Defense Solutions and its offer to supply Iraq with 5,000 armored vehicles from Eastern Europe. 'No other proposal is quicker, less costly, or more certain to succeed,' he said."

The paper continues:

Nor did he disclose it when he went on CNBC that same week and praised the commander Defense Solutions was now counting on for help -- "He's got the heart of a lion" -- or when he told Congress the next month that it should immediately supply Iraq with large numbers of armored vehicles and other equipment.

McCaffrey has had no luck so far getting the deal through for Defense Solutions, but they haven't given up hope yet - the Times reports that he is currently back advocating in Iraq on a trip sponsored by the Pentagon.

Alberto Gonzales

Gonzo Contacted By Prosecutor On US Attorneys Firings

Zachary Roth | December 3, 2008, 3:46PM

This morning, as we noted, the Washington Post reported that the prosecutor Nora Dannehy has met with defense lawyers and issued subpoenas, through a grand jury, in her investigation into criminal wrongdoing in connection with the US Attorney firings.

And it looks like Alberto Gonzales, the former Attorney General on whose watch the firings occurred, is among the people she's contacted.

In an interview with TPMmuckraker, Bob Bork Jr., who serves as a spokesman for the ex-AG, initially said that although Gonzales' lawyer, George Terwilliger III, had reached out to Dannehy at the start of her investigation, he didn't believe that Dannehy had formally contacted Gonzales or Terwilliger in connection with the probe.

But Bork Jr. called back an hour later to say that he had been mistaken about that. "We won't be able to talk about any interactions with DOJ," he now said.

In other words, it would appear, Dannehy has contacted Gonzo and/or his lawyer.

Since DOJ released a report in July into politicized hiring at the department, there has been intense speculation that Gonzales could face perjury charges in connection to his 2007 testimony to Congress.

Tom Carson, a spokesman for Dannehy declined to comment on the progress of the investigation.

Bailout

New Rules For Credit Ratings Agencies

Zachary Roth | December 3, 2008, 2:01PM

We told you last month about the under-reported role of the credit ratings agencies in helping to cause the financial crisis. The problem, in a nutshell, is that the major ratings agencies -- Moody's, Standard & Poor's, and Fitch -- are paid by the insurers (often investment banks) who are issuing the bonds. That gives the agencies a clear incentive to produce favorable ratings, or risk seeing the banks hire a different ratings agency that's willing to offer a better rating.

So it's worth noting that the Securities and Exchange Commission today adopted new rules designed to protect against that conflict of interest.

The Associated Press has the rundown on the new rules:

Among other things, the conflict-of-interest rules ban the rating agencies from advising investment banks on how to package securities to secure favorable ratings. Gifts over $25 from clients also will be prohibited.

Rating agencies will be banned from making ratings in cases where the agency made recommendations to the company issuing securities or the investment bank underwriting them concerning the corporate structure, assets or activities of the issuing company.

In addition, rating agencies will be required to disclose statistics on all their upgrades and downgrades for each asset type. They also will have to disclose how much verification they performed on the quality of complex securities, such as those underpinned by mortgages, student loans or auto loans, in determining ratings for them.

Investors will receive detailed information on the ratings process for complex securities, thereby exposing potential conflicts of interest for the agencies, SEC officials said.

The SEC commissioners also voted to propose and open to public comment other rules that would require rating agencies to disclose in interactive electronic format the ratings history information for all of their assessments that companies issuing the securities pay them to do.

But the AP adds that the rules don't go far enough for some critics of the agencies, who want "new requirements to govern how the rating agencies are paid and to provide for the suspension of their licenses if they engage in unfair practices."

The Senate investigations committee has launched a probe of the ratings agencies. And we're going to be doing our own digging, so you'll hear more on this...

Bailout

More Evidence That Bunning Is GOP Senator Blocking Barofsky Nomination

Zachary Roth | December 3, 2008, 11:39AM

It's looking more and more like -- as we suspected -- Kentucky GOP senator Jim Bunning is the guy who placed the anonymous hold on the nomination of Neil Barofsky to the crucial post of special inspector general for the bailout.

Bunning's spokesman, Mike Reynard, wouldn't return any of our several calls on the subject. But the Associated Press appears to have reached him. It reports:

Republican Sen. Jim Bunning of Kentucky, a member of the Senate Banking Committee who opposed the bailout bill, has said he had "serious concerns" with Barofsky's nomination, though he has praised his experience. Bunning spokesman Mike Reynard would not comment on whether Bunning had placed the hold.

We'll let you draw your own conclusions...

Bailout

Top Dems React To GAO Report

Zachary Roth | December 3, 2008, 11:29AM

Looks like top Congressional Democrats didn't find yesterday's GAO report on how Treasury is implementing the bailout program any more encouraging than we did.

In a statement, Speaker Nancy Pelosi said:

The GAO's discouraging report makes clear that the Treasury Department's implementation of the (rescue plan) is insufficiently transparent and is not accountable to American taxpayers."

And Rep. Barney Frank, who chairs the House Financial Services Committee, agreed, saying in his own statement:

The American people received two kinds of news about the TARP program - bad and worse news.

The bad news was confirmation by the GAO in its first report about the program that Treasury has no way to measure whether taxpayer funds invested in banks are being used in accordance with the purpose of the law - to increase lending. The much worse news is Treasury's response that it does not even have the intention of doing so.

Frank added: "A public hearing on the issues raised by the GAO report is now essential."

Alberto Gonzales

Prosecutor On US Attorneys Case Seems To Be Going All Out

Zachary Roth | December 3, 2008, 10:05AM

A report in the Washington Post suggests that Nora Dannehy, the prosecutor assigned by Attorney General Michael Mukasey to look into the U.S. attorney firings, is taking an aggressive approach to the job.

The Post says Dannehy "has been meeting with defense lawyers, dispatching subpoenas and seeking information about the events, according to legal sources familiar with the case."

It adds: "A grand jury in the District has issued subpoenas, the sources said."

And there's another interesting nugget:

D. Kyle Sampson, who served as the chief of staff to Gonzales until his March 2007 resignation, recently took a leave from his job as a partner at the law firm Hunton & Williams while the investigation proceeds. A spokeswoman for the law firm said he is on leave "pending admission to the D.C. bar."

DOJ's Inspector General report, released in late September, found that Sampson's testimony was "not credible" and "unpersuasive."

Dannehy was appointed September 29 to determine whether crimes had been committed in the affair. She was given 60 days to submit a preliminary report on her findings. The Justice Department did not immediately respond to a request for comment from TPMmuckraker about the report's status.

More on this soon...

The Daily Muck

Natalie Sherman | December 3, 2008, 7:14AM

The ACLU, which has sued to overturn retroactive immunity for telephone companies that illegally cooperated with the Bush administration's domestic surveillance program, appeared to receive support Tuesday from U.S. District Judge Vaughn Walker, according to Wired. Vaughn said that the law being challenged gave "attorney general carte blanche to immunize anyone" and was unprecedented. The trial began yesterday in San Francisco. (Wired)

President Bush issued an executive order Tuesday loosening the regulation of coal mining waste, a decision that was quickly condemned by environmentalists. Miners had lobbied heavily for the change, but greens say the new rule will endanger "mountains, forests and streams throughout Appalachia." The new law is one of a series of "midnight orders" issued by the president, many of which loosen environmental or labor standards.(New York Times)

Give credit where it's due. The CEOs of Ford, GM, and Chrysler said Tuesday they would accept $1 salaries in return for federal bailout funds. (Ford CEO Alan Mulally told the Wall Street Journal earlier, "I think I'm ok where I am.") Two weeks ago, the auto executives retreated home with their tails between their legs after their decision to fly private jets to Washington doomed their bid for federal funds. This time they drove or flew commercial. (CNN)

Read more »

Bailout

GAO Report: Now It's Your Turn

Zachary Roth | December 2, 2008, 5:10PM

In the sequence of posts below, we've tried to pick out the most interesting parts of the GAO report on the Treasury's administration of the bailout money. But we were working fast, so we might have missed stuff.

So if you feel like it, as usual, please review it yourself and let us know what else you find. It's here...

Bailout

Bailout Contractors Hired By Treasury Not Subject To Conflict Of Interest Rules

Zachary Roth | December 2, 2008, 4:56PM

The GAO report sheds light on another interesting angle to the conflict of interest problem with Treasury's administering of the bailout.

The department has hired outside private contractors to administer parts of the bailout program, notes GAO. Given the reports we've seen about Treasury lacking staff -- and lacking the right staff -- to implement the program, that may be a good move.

But as the report explains, outside contractors aren't subject to the conflict of interest rules that govern Treasury staff. As a result, Treasury asked the contractors to identify potential conflicts. There were many:

From the report:

In their responses to Treasury's requirements, six of the eight service providers selected as of November 25, 2008, identified potential or actual sources of conflict. According to our review, the identified conflicts generally involve organizational conflicts of interest, though some also involve personal conflicts of interest:

Five contractors indicated that they either already had clients or could have clients who were receiving TARP assistance.

• One contractor indicated that a potential conflict of interest would arise if it received information proprietary to multiple clients with competing investment interests.

• One company identified conflicts regarding troubled assets owned either directly by the company or by clients that were eligible for assistance under TARP.

Treasury also asked contractors to explain how they would work with Treasury to avoid such conflicts. And it sounds like some didn't exactly go the extra mile in that regard.

The submitted plans provided few details, however, on how the companies would notify and communicate with Treasury if conflicts were identified during the course of performance:

• Two firms' plans indicated that they would either maintain an "open dialog" or would "work in good faith" with Treasury should conflicts of interest emerge.

• Two other plans did not describe how the firms would address conflicts of interest or how they would notify Treasury.

By comparison, one plan indicated that the company would provide information on conflicts of interest to Treasury in its weekly reports and offer recommendations for addressing each issue.

Treasury relies on its financial agents and contractors to disclose conflicts of interest. Treasury officials stated that while under current procedures, they might not know if an agent or contractor did not disclose a conflict, they believed that the consequences for nondisclosure were sufficiently severe to deter such behavior. Finally, Treasury has noted in its solicitations that it intends to oversee and enforce compliance with conflict of interest mitigation plans. For example, Treasury noted in one of its solicitations for legal services that it would incorporate the offeror's final negotiated conflict of interest mitigation plan into the contract and then oversee and enforce the contractor's compliance with the plan. At the time we conducted our work, however, Treasury was still in the process of developing an oversight mechanism for enforcing financial agents' and contractors' mitigation plans. (our itals.)

Bailout

Regulator: Banks Can Enforce Exec Pay Limits Themselves

Zachary Roth | December 2, 2008, 4:21PM

It looks like the limits on executive compensation that Democrats in Congress fought to include in the bailout bill aren't a top priority for Treasury.

From the GAO report:

[A]t this point, the officials have not determined how Treasury will monitor executive compensation compliance. Bank regulators varied in their views about their oversight responsibilities related to compliance with executive compensation requirements and other required terms of CPP. For example, one regulator noted that it would rely on the institution's board of directors to assess compliance, and another regulator stated that it was Treasury's responsibility to provide such oversight. Without a consistent process for monitoring participating institutions, Treasury's ability to identify and address any potential problems in these institutions' compliance with program requirements will be limited.

In other words, Treasury officials aren't even on the same page with each other about how to enforce the limits -- and some think it can be left to the banks, fox-henhouse concerns be damned.

Bailout

Bailed Out Banks: "Money Is Fungible" So Don't Ask What We're Doing With It

Zachary Roth | December 2, 2008, 3:59PM

Here's a bit more detail, from page 25 of the GAO report, on what seems like the Treasury's utter aversion to requiring banks to offer any information whatsoever on what they're doing with the billions of dollars of taxpayer money they're getting.

[I]t is unclear how OFS and the banking regulators will monitor how participating institutions are using the capital investments and whether these goals are being met. The standard agreement between Treasury and the participating institutions does not require that these institutions track or report how they plan to use, or do use, their capital investments.

...

With the exception of two institutions, institution officials noted that money is fungible and that they did not intend to track or report CPP capital separately.

...

The banking regulators indicated that they had not yet developed any additional supervisory steps, such as requiring more frequent provision of certain call report data for participating institutions, to monitor participating institutions' activities.

So it seems to come down to this: the banks won't say what they're doing with the money, and Treasury is too polite to ask.

Bailout

GAO: Treasury "May Not Be Able To Ensure That Conflicts Are Fully Identified."

Zachary Roth | December 2, 2008, 3:47PM

The authors of the GAO report don't appear impressed by Treasury's efforts to avoid conflicts of interest -- one of the prime concerns raised by some observers, given the number of top Treasury officials who used to work for companies receiving money under the bailout program.

From the report:

Lacking a comprehensive and complete system to monitor conflicts of interest, Treasury runs the risk that it may not be able to ensure that conflicts are fully identified and appropriately addressed.

Bailout

GAO: Treasury Not Ensuring That Bailout Money Is Being Spent As Intended

Zachary Roth | December 2, 2008, 3:39PM

The GAO report makes clear that the urgency of the crisis has meant that oversight procedures have taken a backseat. It concludes in part:

Because TARP is relatively new, and because the crisis makes immediate action imperative, Treasury is operating on a number of fronts concurrently. It is setting up programs and establishing oversight policies and procedures at the same time. As a result, we are seeing some lag in administrative efforts -- for example, internal controls -- as the programs proceed.
...

Treasury has not yet set up policies and procedures to help ensure that [Capital Purchase Program] funds are being used as intended.

And it recommends that those procedures be set up as soon as practicable.

The report is now available online (pdf).

Bailout

Treasury May Not Make Banks Report Back On How They're Spending Bailout Money

Zachary Roth | December 2, 2008, 3:29PM

Check out this nugget from page 15 of the GAO report on how Treasury is spending the bailout money:

[Treasury's Office of Financial Stability] has not yet determined if it will impose reporting requirements on the participating financial institutions that could enable OFS to monitor, to some extent, how the financial institutions are using capital infusions.

More to come...

Bailout

GAO: "Treasury Has Yet To Address A Number Of Critical Issues" On Spending Bailout Money

Zachary Roth | December 2, 2008, 3:19PM

A just-released report by the Government Accountability Office on how the Treasury Department is using the $700 billion allocated to it by Congress for the financial bailout reaches some discouraging conclusions.

It finds that:

Treasury has yet to address a number of critical issues, including determining how it will ensure that CPP is achieving its intended goals and monitoring compliance with limitations on executive compensation and dividend payments. Moreover, further actions are needed to formalize transition planning efforts and establish an effective management structure and an essential system of internal control.

We're looking through the report here at TPMmuckraker and will bring you more detail as we find it...

Bailout

Barofsky Hold: Not Johnny Isakson, And Probably Not George Voinovich

Zachary Roth | December 2, 2008, 10:06AM

A staffer for the Georgia senator says unequivocally that Isakson isn't blocking a vote on the nomination of Neil Barofsky to be bailout IG.

As for Voinovich of Ohio, a reader reports that a staffer in his office "said that he has not done it as far as they are aware and feel that if he had done it he would have announced that he did it. They said he is pro-oversight and just sent a letter to Pelosi and Reid requesting that a bailout overseer be assigned for the auto industry package."

That's 13 out of 49 largely ruled out. Keep making those calls!

The Daily Muck

The Daily Muck

Natalie Sherman | December 2, 2008, 10:04AM

Birmingham mayor Larry Langford was arrested Monday on charges of steering sewer contracts to a friend while on the commission of Jefferson County, which is now near bankruptcy. The FBI handed down a 101-count indictment for the Democratic "Mayor LaLa" as well as Montgomery investment banker Bill Blount and lobbyist Al LaPierre, who both had posts in the local Democratic party, accusing the men of a "pay to play" scheme involving bribes of $12,000 watches and spa treatment. Langford, elected in March, has earned a reputation for an unorthodox approach to urban revitalization, which has included handing out a $10,000 contract to a 13-year-old girl interested in improving parks. (AP)

Trial opens at 10am today for the high-profile case that pits civil liberty groups against the Bush administration and telephone companies, who are being sued for illegally granting the government access to consumer records. Congress passed a bill in July that would give the businesses immunity, a move prosecutors say is unconstitutional. (Wired)

The indictments brought against Dick Cheney and Alberto Gonzales by a south Texas district attorney were dismissed yesterday on a legal technicality, with the judge ruling that "two alternate jurors had not been properly substituted." Willacy County District Attorney Juan Angel Guerra, who had charges against him for extorting money from a bail bond company and using his office for personal business dismissed last month, had accused Cheney and others of prisoner abuse. The judge issued a warning to Guerra -- who will step down from his post in January -- to be more judicious in his criminal prosecutions. (AP)

Read more »

David Safavian

Potential Safavian Jurors Asked Whether They Play Golf

Zachary Roth | December 1, 2008, 6:29PM

Jury selection began today in the retrial of David Safavian, the Jack Abramoff crony who served as the top procurement official in the Bush White House.

Safavian was convicted in 2006 of obstructing justice and lying to investigators about his work with Abramoff, as well as concealing information about a golf junket he took to St. Andrews, Scotland with Abramoff and convicted former GOP congressman Bob Ney, among others. But that conviction was thrown out on appeal. He was then re-indicted in October, on charges of obstructing justice, lying on a financial disclosure form and providing false statements to various investigators.

The Washington Post reports that, in addition to the standard questions, the judge in the trial today asked potential jurors whether they played any golf. It's unclear whether that would increase or decrease their chances of being picked.

Regular readers may remember that Safavian's alleged love of golf was a major focus of the original trial.

Barack Obama

Holder: I'm No Gonzo -- And I'll Go After Corporate Crime

Zachary Roth | December 1, 2008, 4:26PM

Earlier we noted that, in speaking this morning about Eric Holder, his pick for Attorney General, Barack Obama seemed to go out of his way to suggest that Holder would reverse the politicization of DOJ that we saw under President Bush and Alberto Gonzales.

Holder's own remarks backed up that notion. He said:

It is incumbent upon those of us who lead the Department to ensure not only that the nation is safe but also that our laws and traditions are respected. There is not a tension between those two. We can and we must ensure that the American people remain secure and that the great constitutional guarantees that define us as a nation are truly valued. For example, working with Republicans and Democrats in Congress, should I be confirmed, we look forward to actually structuring policies that are both protective and consistent with who we are as a nation.

And Holder included an interesting hint suggesting that he may be more aggressive than his predecessors under Bush in going after corporate malfeasance -- specifically, one would assume, in regard to the current financial crisis:

National security concerns are not defined only by the challenges created by terrorists abroad, but also by criminals in our midst, whether they be criminals located on the street or in a boardroom.

Holder's full remarks follow after the jump...

Read more »

Bailout

Barofsky Hold: Not Orrin Hatch, Or Bob Corker...So Where Does That Leave Us?

Zachary Roth | December 1, 2008, 4:05PM

Staffers for both GOP senators have told our readers unequivocally that it wasn't Hatch or Corker that placed the hold on the nomination of Neil Barofsky to be inspector general for the bailout money.

So what have we learned so far?

Seven senators' offices have said unequivocally that they're not responsible: Coburn, Dole, Allard, Coleman, Warner, Hatch, and Corker.

In addition, staffers for four more -- Shelby, Sessions, Inhofe, and Bond -- have given versions of "not to my knowledge", meaning these senators probably aren't prime suspects, though they can't be definitively struck from the list.

That leaves 38 more from whom we've yet to hear anything. (Remember, until January there are still 49 GOP senators.)

Meanwhile, we've left two messages with the office of Jim Bunning, the Kentucky GOP senator who during a recent hearing expressed his opposition to Barofsky's appointment, but have heard nothing back.

Maybe our Bluegrass state readers will have more luck...

Bailout

Law Could Force Disclosure Of Mystery Senator's Identity

Zachary Roth | December 1, 2008, 3:45PM

In response to our quest to figure out which GOP senator is blocking the nomination of Neil Barofsky to be inspector general for the bailout money, Paul Blumenthal of the Sunlight Foundation, a good government organization, provides some key background on how these Senate holds work:

We've had our fair share of experience with secret holds, having fought to reveal the identities of those secretly blocking the Coburn-Obama bill (FFATA) and the campaign finance e-filing bill (S. 223). The first thing of note is that secret holds were, for the most part, abolished during the 110th Congress. The Honest Leadership and Open Government Act mandated the disclosure of the identity of a senator secretly blocking a "measure or matter" "not later than 6 session days" after the initiation of the hold.

The Barofsky nomination provides a good example of the loopholes in this mandate of disclosure. If a bill or, in this case, a nomination comes up prior to a long recess, the disclosure of the offending senator's identity will have to wait until the Senate reconvenes for at least 6 session days, not calendar days. So far, since the nomination was blocked, the Senate convened for two session days. While they are expected to convene tomorrow for a pro forma session, it is unknown whether the Senate will convene for four more days by the end of the year.

In other words, if the Senate does end up convening for four more days this session, we could soon find out the mystery senator's identity -- though how that would actually play out in practice remains unknown.

But if, on the other hand, the Senate doesn't meet for four more days this session, we could never know, and the hold could remain in place at least until the new Congress convenes.

Meanwhile, reports from readers continue to pour in -- more soon.

Bailout

Barofsky Hold: Not John Warner...

Zachary Roth | December 1, 2008, 3:27PM

A staffer for the outgoing Virginia senator confirms to a reader that he didn't put a hold on Neil Barofsky's nomination to be bailout IG.

Alberto Gonzales

Obama: Holder Won't Be Another Gonzo

Zachary Roth | December 1, 2008, 2:33PM

Given our coverage of the unprecedented politicization of the Department of Justice under President Bush, we thought this passage from Barack Obama's prepared remarks this morning -- at which he announced Eric Holder as his pick for Attorney General, among other selections -- was worth noting:

Eric also has the combination of toughness and independence that we need at the Justice Department. Let me be clear: the Attorney General serves the American people. And I have every expectation that Eric will protect our people, uphold the public trust, and adhere to our Constitution.

In other words, Obama is sending a message that Holder won't see his role as being the president's personal lawyer -- which was how Alberto Gonzales, who had been Bush's lawyer both in the White House and in Texas, seemed to view the job.

Bailout

Barofsky Hold: Not Norm Coleman...

Zachary Roth | December 1, 2008, 2:13PM

A staffer for Sen. Norm Coleman unequivocally denied to a TPMmuckraker reader that the Minnesota senator is blocking Neil Barofsky's nomination to be inspector general for the bailout, and said that Coleman wants the appointment to go forward.

Bailout

Barofsky Hold: Not Wayne Allard...

Zachary Roth | December 1, 2008, 1:54PM

A staffer for the outgoing Colorado senator has told a reader that Allard isn't blocking Neil Barofsky's nomination to be inspector general of the bailout.

That's six on the record...

Duke Cunningham

Lawyers: Wade Helped Prosecutors Probe Five Other Members Of Congress

Zachary Roth | December 1, 2008, 1:50PM

Could we see more members of Congress charged in connection with the investigation into the Duke Cunningham bribery scandal?

Lawyers for Mitchell Wade, the former defense contractor who pleaded guilty in 2006 to bribing his friend Cunningham, filed a "sentencing memo" last week claiming that Wade had helped prosecutors' efforts to look into "at least five other members of Congress" who were under investigation for "corruption similar to that of Mr. Cunningham."

The Washington Post adds:

Although none of those members is named, two are under investigation, according to the memorandum, and "three others have come under scrutiny for their receipt of straw contributions" from former Wade employees and one for the possible receipt of undisclosed gifts.

The existence of the memo -- which argued for a more lenient sentence for Wade -- was first reported on the blog of the investigative reporter Seth Hettena, who has published a book on the Cunningham scandal.

Hettena writes that former GOP Florida congresswoman Katherine Harris (yes, that Katherine Harris), and Virginia Republican Rep. Virgil Goode -- who has apparently lost his Virginia seat -- are likely on that list of five. (We told you about Harris' and Goode's connections to the scandal back in 2006).

Hettena adds: "Wade wanted to open facilities in their districts and made $78,000 in "straw" contributions to grease the wheels. Neither Harris nor Goode has been charged with wrongdoing."

Bailout

Barofsky Hold: Not Elizabeth Dole...

Zachary Roth | December 1, 2008, 1:22PM

A member of the recently-ousted North Carolina senator's staff tells a reader that she didn't put a hold on the nomination of Neil Barofsky as inspector general for the bailout.

We've already all but ruled out four other GOP senators: Coburn and Inhofe from Oklahoma, and Sessions and Shelby from Alabama.

Bailout

Barofsky Hold: Readers' Reports Coming In

Zachary Roth | December 1, 2008, 12:35PM

An hour ago, we asked readers to call their GOP senators and ask whether they put a hold on the nomination of Neil Barofsky to a key post overseeing the Treasury Department's use of bailout money.

We've already heard back from readers on four senators...

Sen. Tom Coburn (OK) -- A reader reports that Coburn's office "was absolutely categorical. They publicize all their holds and they have not placed one on Barofsky."

Sen. James Inhofe (OK) -- "His staff said that they 'didn't believe' that the Senator had placed such a hold.

Sen. Jeff Sessions (AL) -- Sessions' legislative director told a reader: "Not to my knowledge."

Sen. Richard Shelby (AL) -- A staffer told our reader: "I don't think so. If he had, I would have heard about it." (Shelby is the ranking Republican on the Senate banking committee, which cleared Barofsky's nomination two weeks ago.)

Keep letting us know what you hear...

Jim Bunning

Is Kentucky GOPer Blocking Barofsky Appointment?

Zachary Roth | December 1, 2008, 12:09PM

Here's one possible suspect in the mystery of which Republican senator put a hold on the nomination of federal prosecutor Neil Barofsky for the key post of special inspector general for the bailout.

During Barofsky's appearance before the Senate banking committee November 19, Kentucky GOP senator Jim Bunning -- who from the beginning has been a staunch opponent of the bailout as a whole -- made clear that he opposed the nomination. Bunning expressed concern about the Treasury's decision last month to change its plan for how to use the bailout money, and about Barofsky's apparent reluctance, at a previous hearing, to question that decision by Treasury.

From the hearing:

Bunning: The bailout law also allows $50 million for your office, and so you will have a very ample amount of resources.

But I have serious concerns with your nomination. The nominee may be a dedicated public servant. He appears to be a skilled prosecutor and a man of integrity. But I wonder why taxpayers should have to pay $50 million to a watchdog who will have nothing to watch. How willing (sic) the IG performs (sic) his statutory role when the secretary has rewritten the law already, less than two months after it was enacted.

...

In his testimony earlier this week, Mr. Barofsky did not question Secretary Paulson's unlikely interpretation of the bailout law. Now, that's the money that is spent; if he does not question it, he will have little to do but watch the preferred stock positions mature.

...

Ultimately, I believe Mr. Barofsky, with his impressive legal skills, can serve the public far better in the Southern District of New York, where he can continue to prosecute mortgage fraud.

To be clear: Bunning, or any other senator, has a perfect right to oppose Barofsky's nomination for the reasons he suggests above. But anonymously preventing a free vote on the issue, especially at a time of such urgency, hardly offers a model of the kind of openness and transparency that Congress is calling for from the Treasury Department.

We've put in a call to Bunning's office, and will let you know what we hear.

Bailout

Senate GOPer Blocking Appointment Of Key Bailout Overseer: We Need Your Help!

Zachary Roth | December 1, 2008, 11:20AM

Last week we noticed that at least one unnamed Republican senator has put a hold on the nomination of Neil Barofsky as the Treasury's Department's special inspector general for the bailout.

This is a crucial post for ensuring that the department spends its $700 billion wisely and without favor -- all the more so because Treasury Secretary Henry Paulson, and the man running the bailout, Neel Kashkari, are both former executives at Goldman Sachs, which has already received $10 billion from Treasury. And no one has seriously questioned Barofsky's personal fitness for the job.

Senators have the right to anonymously put a hold on any nomination to a federal post for any reason whatsoever. But given what's at stake here, it's worth trying to find out who's responsible for the hold, and why. We've put in a call to Senate GOP leader Mitch McConnell's office. But we could use your help too.

So if you live in a state with at least one Republican senator, we're asking you to call their office, tell them you're a constituent, and politely ask whether they put a hold on Barofsky's nomination, and if so, why. Then email us and let us know what you find out -- even if it's a 'no' or an inconclusive answer. If nothing else, your information can help us narrow down the list.

And in case it helps, here's the statement put out by Sen. Chris Dodd, the chair of the banking committee, that first mentioned the hold.

One final point: in Friday's post, we noted a jurisdictional dispute between the Senate banking and finance committees, mentioned in a Washington Post story before the hold was put on, as a possible explanation for the move. But a Hill staffer in a position to know tells us that the issue has been resolved. So you can scratch that idea.

We'll be watching for your emails...

The Daily Muck

The Daily Muck

Matt Berman | December 1, 2008, 10:03AM

Former President Bill Clinton will disclose the names of over 200,000 donors to the William J. Clinton Foundation, which supports efforts to combat poverty, disease, and global warming, according to Democratic sources. Clinton has agreed to publicly reveal the names so that his wife, Sen. Hillary Clinton, will be able to serve as Secretary of State. President-Elect Barack Obama insisted on this disclosure to avoid charges of conflict of interest due to foreign donations to the foundation. (New York Times)

Despite Barack Obama's vows to avoid ties between his White House and the lobbying industry, Tom Daschle, his expected pick for Health and Human Services secretary, serves as a policy adviser for the lobbying firm, Alston & Bird, which represents interests in the health industry. Daschle has advised clients for the firm on health care issues, as the New York Times has also reported. The Obama team said Daschle's prior work would not present a conflict of interest. (Politico)

Christine Beatty, who had been accused of having an affair with Detroit's ex-mayor, pleaded guilty Monday to obstruction of justice during the investigation of their sex scandal. Beatty, who had served as chief of staff to Kwame Kilpatrick, now in jail, made a deal with prosecutors and will receive four months in prison. (AP)

Read more »