Pentagon

Hodes Blasts 'Whitewash' IG Report on Pentagon Pundits

Elana Schor | January 16, 2009, 5:23PM

The Defense Department inspector general has absolved the Pentagon of any guilt for its systematic farming-out of military officials to promote the Iraq war on TV. But Rep. Paul Hodes (D-NH) isn't about to let the issue drop.

From a statement his office provided to TPMmuckraker:

This report is a whitewash and did not ask the right questions. There are factual inaccuracies and a lack of depth to the investigation. It's a nice parting gift to the Bush White House from the Pentagon. I plan to continue to pursue this matter to get the answers the American people deserve to ensure that they are not the victims of propaganda and deception in matters of war and peace.

Given that the IG report essentially declared there to be insufficient evidence to prove whether the pundits program violated anti-propaganda rules, Hodes has a point about the depth of the probe. Perhaps the coming Government Accountability Office report on the military's Iraq marketing will get more substantive answers from the networks.

Wiretapping

Feingold: Wiretap Ruling No Big Deal

Zachary Roth | January 16, 2009, 4:46PM

We wrote earlier about the still-murky significance of a FISA court's ruling that a law passed by Congress in 2007, giving the president the power to conduct warrantless wiretaps, is constitutional.

And now Russ Feingold, the Wisconsin senator who has led Democrats' efforts to oppose Bush on the issue, has weighed in to help make the case that the decision is limited in its implications.

In a statement just distributed to reporters, Feingold declared that the court's decision "in no way validates or bolsters the president's illegal warrantless wiretapping program."

He continued:

It did not support the President's claim of inherent constitutional authority to violate the law. In fact, the court explicitly stated that "we caution that our decision does not constitute an endorsement of broad-based, indiscriminate executive power."

The whole statement and an accompanying "fact sheet" follows after the jump...

Read more »

DOJ Office Of The Inspector General

DOD Pundit Report Finds No Wrongdoing

Zachary Roth | January 16, 2009, 4:30PM

The DOD's just-released report on its TV pundit hiring program finds that the department did not violate prohibitions on using public finds for propaganda by ceding the networks with retired military analysts (RMAs).

Here's the key passage:

The Comptroller General has interpreted the publicity and propaganda riders to prohibit three types of activities--self-aggrandizement or puffery, partisanship, and covert communications. Applying these standards, we found the evidence insufficient to conclude that RMA outreach activities were improper. Further, we found insufficient basis to conclude that OASD(PA) conceived of or undertook a disciplined effort to assemble a contingent of influential RMAs who could be depended on to comment favorably on DoD programs.

With regard to RMAs who had ties to military contractors, extensive searches found no instance where such RMAs used information or contacts obtained as a result of the OASD(PA) outreach program to achieve a competitive advantage for their company.

But it also admits at the end that the report wasn't informed by much information from the networks themselves:

We requested interviews with the official responsible for the news divisions at five networks: ABC, CBS, CNN, FOX, and NBC. All declined our request for an interview. ABC, CNN, and FOX provided formal written responses to our inquiry. NBC forwarded copies of their responses to Congresswoman DeLauro and the New York Times. CBS provided "off the record" remarks.

Given that the networks appear to be just as culpable as DOD here, if not more so, that seems like a serious flaw.

Defense Department

Pentagon Releases Report On TV Pundits Program

Zachary Roth | January 16, 2009, 4:13PM

It's Friday at 4pm on the last business day of the Bush administration.

So of course, the Pentagon has just released its report on its TV pundit program, which it used to promote the Iraq war, that the New York Times uncovered last year.

It's here.

George Bush

Big Surprise: Bush Administration Claims On Missing Emails Likely Overstated

Zachary Roth | January 16, 2009, 4:02PM

Yesterday, the Washington Post reported the claim by a Justice Department lawyer that the White House had, at the eleventh hour, found the famous "missing emails" which for four years it's been claiming that the dog ate -- I mean, that it lost when switching to a new email system after President Bush's re-election.

But it sounds like the Post was overly sanguine about the situation. In reality, the government's claim on behalf of the White House may not be worth much at all.

"It's definitely questionable that they're doing something to solve the problem," Meredith Fuchs, a lawyer for the National Security Archive, one of the groups suing to require the White House to recover the emails, told TPMmuckraker.

The emails at issue are from periods that will be crucial in assessing the Bush legacy, including the run-up to the invasion of Iraq, and Pat Fitzgerald's probe of the Valerie plame leak. We'll know more about just how much has been preserved by next Tuesday or Wednesday, when the records will be transferred to the National Archives.

But it doesn't sound like we'll get everything. The new email system that the White House switched to four years ago allowed all staff members to access storage files and delete messages -- unlike the previous system, which was designed to preserve all messages containing official business. Fuchs said that the White House has still declined to make a forensic copy of the records, so any emails that were deleted likely won't be recovered. And since we're talking about millions of emails, it may be impossible to know what we don't have.

"They wait until the last moment and then they try to slam the door," Fuchs added.

Earlier this year, CREW, which is also bringing the suit, asked the FBI to probe whether the deletions of the emails had deliberate, and criminally. But there's no evidence the bureau followed up.

A fittingly disturbing coda to eight years of secrecy and obfuscation.

Bailout

Obama Team: We Promise We'll Do Second TARP Differently

Zachary Roth | January 16, 2009, 1:53PM

Looks like Barack Obama's word is worth quite a lot just now. About $350 billion, in fact.

To explain:

Congress has been talking tough lately, for good reason, about the need to impose strict conditions on the second $350 billion for the bailout -- lest it meet the same fate as the first $350 billion, which, at least for now, appears not to have eased lending or stabilized the housing market.

But yesterday, the Senate went ahead and voted not to block the incoming administration from getting the money -- despite the fact that there are no strings attached. Congress could still add restrictions, of course, but, as we've reported in depth over at Election Central, leaders in both the House and Senate have suggested that they won't. Instead, they're apparently willing to accept the Obama team's voluntary assurances that they'll do things differently from the Bush crew.

As for those voluntary assurances, they're not nothing. As laid out in a letter to Congressional leaders by Larry Summers, who'll run Obama's White House Economic Council, they read as a pointed indictment of the current administration, which failed to do any of them.

For instance, Summers pledged:

The Treasury will require detailed and timely information from recipients of government investments on their lending patterns broken down by category.

and:

Executive compensation above a specified threshold amount [will] be paid in restricted stock or similar form that cannot be liquidated or sold until the government has been repaid.

and:

Prevent shareholders from being unduly rewarded at taxpayer expense. Payment of dividends by firms receiving support must be approved by their primary federal regulator. For firms receiving exceptional assistance, quarterly dividend payments will be restricted to $0.01 until the government has been repaid.

and:

Preclude use of government funds to purchase healthy firms rather than to boost lending.

Limit assistance under the EESA to financial institutions eligible under that Act. Firms in the auto industry, which were provided assistance under the EESA, will only receive additional assistance in the context of a comprehensive restructuring designed to achieve long-term viability.

And perhaps most important:

Implement a sweeping foreclosure mitigation plan for responsible families including helping to reduce mortgage payment for economically stressed but responsible homeowners, reforming our bankruptcy laws, and strengthening existing housing initiatives like Hope for Homeowners.

Those all sound like crucial ideas. But it'd be nice if we didn't have to take anyone's -- even Obama's -- word for it.

Wiretapping

Jury Still Out On Wiretapping Verdict's Significance

Zachary Roth | January 16, 2009, 12:12PM

Yesterday we noted the news that a secret court had ruled that a law passed by Congress empowering the president to eavesdrop without a warrant was constitutional.

But there was debate over the broader implications of the ruling. The New York Times suggested that it could give "legal credence to the Bush administration's repeated assertions that the president has constitutional authority to act without specific court approval in ordering national security eavesdropping."

But other commentators disagreed, arguing that the decision bore only on the law under review.

Now the Times has modified its take in a new story, which cautions higher up that the ruling "did not directly address whether President Bush was within his constitutional powers in ordering domestic wiretapping without warrants, without first getting Congressional approval,"

Still, the picture remains murky. One law professor tells the paper that "while the ruling did not address Mr. Bush's surveillance without warrants directly, 'it does bolster his case' by recognizing that eavesdropping for national security purposes did not always require warrants."

But a national security law expert disagrees, saying: "I think this kind of maintains the status quo. I don't think it is a surprise that the FISA court found that the legislation was constitutional."

Bailout

TARP: What Did We Get For Our Money?

Zachary Roth | January 16, 2009, 11:54AM

Remember how, back when Congress was negotiating with the Bush administration over the terms of the bailout, one of the major sticking points was Rep. Barney Frank's insistence that taxpayers receive equity in the companies we were saving, so that we could at least get our money back down the road? Well, Frank largely won on that point. We're now all part owners of Goldman Sachs, Bank of America, Citigroup, and all the rest.

But that only leaves more questions. What kind of a deal did Treasury Secretary Henry Paulson strike on our behalf with these firms? And more broadly, given the astronomical amount of money we're talking about and the massive deficits we already face, we need to know how we should think about what we've done. Have we invested the $350 billion that Congress has given so far, with a realistic expectation of at least being re-paid -- as Paulson, who has called it "an investment, not an expenditure," argues. Or is it more accurate to think of that sum as already spent and unrecoverable, simply the cost of preventing financial armageddon?

It's too soon to know how much of that money we'll get back, because the answer depends on the fate of the market -- something we all know better than to try to predict. But it's worth considering some of the key factors that will determine that answer.

In terms of Treasury's investment, it seems clear we got a bad deal.

TARP injected capital into the banks largely by buying preferred stock at a dividend rate of 5 percent per year -- that rises to 9 percent after 5 years -- in return for an equity stake in the companies. We also got warrants to buy common stock in the future at a fixed price.

But given the risk involved in the transaction -- investing in banks that were on the brink of collapse -- experts say we should have gotten more than 5 percent. "We could have gotten better terms," Simon Johnson, the former chief economist for the IMF, and now a fellow at the Peterson Institute for International Economics, told TPMmuckraker.

Demetri Papademetriou, president of the Levy Economics Institute, agrees. He points out that the governments of Britain, France, and Greece all conducted similar stock purchases, and got a dividend rate of 10 percent.

And Bloomberg recently calculated that, although Treasury invested twice as much as Warren Buffett did in Goldman Sachs, it gained only one fourth of the value.

Papademetriou believes that an ideological aversion to anything that smacks, however mildly, of central planning, partly explains why Paulson failed to drive a hard bargain. "There is a reluctance from the US government to be very involved in the private sector," he said.

Barry Ritholtz, the chief market strategist for Fusion IQ, an institutional research firm, says "incompetence" on Paulson's part is as much to blame. "There no such thing as half pregnant, and there's no such thing as half a virgin," he says. "If you're gonna do it, you can't say, we're gonna do it but we're gonna do a shitty job."

Of course, the department has argued from the start that making a good investment wasn't its goal. In a December speech to mortgage bankers, Treasury's bailout czar, Neel Kashkari, declared: "We're not day traders, and we're not looking for a return tomorrow. We are looking to try to stabilize the financial system, get credit flowing again."

But that gets us into the broader question -- for which there's no easy answer -- of how to think about the TARP money.

It's not right, say most experts, to think of this simply as government spending, akin to spending on, say, the Iraq war. The idea, of course, is that once the mortgage market stabilizes, the companies in which we've invested will eventually be able to write down their toxic assets, sell them off, and return to profitability. That will allow them to liquidate -- essentially, to buy back -- the stock we've bought, (something they're required by the terms of the deal to do before they can raise more capital). We'll have profited from the dividends, and will also be able to exercise our warrants to buy more stock at an advantageous price. That's why Frank insisted on equity in the first place.

But some say that may not happen. We simply don't know the true amount of bad debt that these banks have on their books -- and it's not clear that Treasury did either when it struck the deals.

But the signs aren't good. In early December, the Associated Press calculated that the warrants we bought via TARP, valued at a total of $27 billion, are now worth less than $18 billion. So if we exercised those warrants in December, we'd have been out over $9 billion.

And since then things seem to have gotten worse. Bank of America announced this week it needed a second bailout -- in the end, $20 billion -- because it hadn't realized just how toxic were the assets it took on in when it bought Merrill Lynch.

So even though Treasury says its goal wasn't to turn a profit but rather to stabilize the market, it's unclear whether it'll succeed in that -- right now, most signs suggest it hasn't yet. And that's the key question: If that longer-term stabilization doesn't happen, of course, we won't get much of our investment back, because the companies in which we've invested will fail, or be unable to turn a profit.

"These companies are insolvent. They have more liabilities than assets." says Ritholtz. The exact situations differ from firm to firm, but Ritholtz says that Citigroup, for example, in which we've invested $45 billion, "is sitting on tens of billions of toxic assets. So why would stock go up?" Ritholtz calls it "highly unlikely" that Citigroup will eventually have something to pay back. As for AIG, for which we're in $85 billion, he believes it's "inconceivable."

The situation isn't helped by the low level of transparency about their true positions that many of these companies appear to practice. Audit Integrity, which conducts accounting and governance risk analysis for public companies released a report last month finding that many of the big banks we've lent to -- including Citigroup, Goldman Sachs, Bank of America, and JP Morgan Chase -- "are likely in worse condition than publicly disclosed," because of the high likelihood that they'll restate their earnings, or provoke government regulatory action or stockholder litigation.

As if to prove the point, on Tuesday Goldman raised its estimate of expected losses stemming from its toxic assets to $2.1 trillion, up from $1.2 triillon last March.

So where does all this leave us? Congress is getting set to hand over another $350 billion for more bailouts, but this time it's insisting on more help for homeowners facing foreclosure. By stabilizing the mortgage market, that could also help Wall Street -- allowing us potentially to recoup our investment.

So that $350 billion already spent may not be gone. But it's by no means clear what we'll end up getting for it.

Bradley Schlozman

Berry: Tanner's "Supposed Apology" Is "Even Funnier"

Zachary Roth | January 16, 2009, 10:28AM

Mary Frances Berry, the target of a racist "joke" by then-DOJ voting-rights chief John Tanner, has responded to the insult, and to Tanner's credulity-straining semi-apology.

Berry, the former chair of the US Commission on Civil Rights, spoke Wednesday at a legal conference held by the American Constituion Society, entitled: "The Road from Lincoln to Obama: The Constitution and the New Birth of Freedom."

She began her remarks like this:

Welcome. Today I have to tell you that even though I am black, I am not bitter. (Scattered laughter).

Bitter some of the time, but not here.

And I would tell you that the guy who made the comments sent me an email last night, in a supposed apology, which is even funnier, but I won't take up the time.

Here's the video:

According to a Justice Department report released this week, Tanner told a colleague over email that he liked his coffee "Mary Frances Berry style -- black and bitter."

Seems like the right way for Berry to play it.

The Daily Muck

The Daily Muck

Chris Black | January 16, 2009, 9:56AM

An employee of the U.S. Department of Agriculture is accused of running a prostitution ring from her work computer in the agency's Kansas City office. Laurie Lynn McConnell, a 26-year-old statistician, allegedly ran the ring in three states with the help of a 36-year-old co-defendant who does not work for the USDA. The pair faces between five and 20 years of jail time if convicted. (Kansas City Star)

The White House has found 14 million missing email messages, according to a lawyer with the Justice Department. The announcement came just hours after a federal judge ordered White House employees to do a comprehensive search of computer workstations, preserve portable hard drives and look over any emails sent between 2003 and 2005. The emails will be transferred to the National Archives, as is legally required of the White House. The emails were sought after because they may contain details of the Valerie Plame affair and the firing of U.S. attorneys. (Washington Post)

The same Pentagon official who went on record as saying that the U.S. government tortured a terror suspect now says that that suspect will likely never be prosecuted. Susan Crawford, the convening authority of military commissions at Guantanamo Bay, said the treatment of Saudi detainee Mohammed al-Qahtani fit the legal definition of torture and so she did not refer his case for prosecution. Qahtani was allegedly meant to be the 20th hijacker on 9/11. (AFP)

Read more »

Chuck Schumer

Schumer On Tanner's Racist Email: "Shocking"

Zachary Roth | January 15, 2009, 3:03PM

In a move that piqued our interest here at TPMmuckraker, Sen. Schumer, during his questioning of Eric Holder, cited the racist email sent by John Tanner, who was at the time the head of the voting rights section, about Mary Frances Berry, the then-chair of the US Commission on Civil Rights.

Schumer called the statement "all the more shocking becasue it's a supervisor in the civil rights division who said this."

Tanner sent a letter of apology to Berry earlier this week.

Here's the video:

Alberto Gonzales

Schumer To Holder: You and Obama Are "Both Very Handsome"

Zachary Roth | January 15, 2009, 2:48PM

Ok, so that headline wasn't really on point. But now that you're reading...

In his questioning of Eric Holder this morning, Sen. Chuck Schumer really doubled down on the theme of politicization at DOJ under Alberto Gonzales -- a theme that, as we noted, has served as the constant backdrop to the hearings so far.

Schumer declared that "the likes of Alberto Gonzales and Bradley Schlozman sullied and demoralized a great legal institution, probably the finest civil service institution in the country, that they really dragged through the mud.

As for GOP efforts to suggest Holder could act similarly, Schumer called the comparisons "ludicrous," then initiated the following clever and enlightening exchange to demonstrate Holder's comparative independence:

Schumer: As I look at your background and your record, it's clear that you are less connected and less beholden to the new president than most attorneys general in the last fifty years. Let's review for the moment. I have a few quick questions for you.

Have you ever been President-Elect Obama's personal lawyer, like William French Smith had been for years for Ronald Reagan?

Holder: No, I have not.

Schumer: Have you ever been a staffer for Barack Obama, like Ed Meese had been for Reagan?

Holder: No, I have not, senator.

Schumer: Have you ever served as official counsel to Barack Obama, like Alberto Gonzales had for George Bush?

Holder: No, I have not, senator.

Schumer: And has Barack Obama ever dispatched you to the hospital room of a sick government official, to get him to authorize an illegal wiretap program?

Holder: No, he has not.

Schumer: Yeah I didn't think so. Alright, and I take it you're not a close relation to the new president, like Bobby Kennedy was to Jack Kennedy?

Holder: No, we're not related by blood though people to say we look alike.

Schumer: I don't think so. Although you're both very handsome.

Holder: I'd heard he's handsome and was going to try to draft on that.

Schumer: OK, let me ask you this, have you ever been a professional politician like John Ashcroft or Dick Thornburgh?

Holder: No, I've never run for office.

Here's the video of the exchange:

George Bush

UPDATED: Court: Bush Can Eavesdrop Without Warrant

Zachary Roth | January 15, 2009, 1:53PM

In its waning days, the Bush administration has suffered a few adverse rulings from the courts on the broad issue of executive power.

But it looks like it's about to get a major one in its favor on the issue of warrantless wiretapping. The New York Times reports:

A federal intelligence court, in a rare public opinion, is expected to issue a major ruling validating the power of the president and Congress to wiretap international phone calls and intercept e-mail messages without a court order, even when Americans' private communications may be involved.

In other words, at least according to this court, the administration didn't need to get a warrant after all for its controversial domestic spying program. As the Times puts it, the decision "may offer legal credence to the Bush administration's repeated assertions that the president has constitutional authority to act without specific court approval in ordering national security eavesdropping."

The Times explains that the court did not directly rule on the legality of the NSA's controversial secret wiretapping program, conducted between 2001 and 2007, which the same paper first revealed in 2005. Rather, in 2007, Congress passed the Protect America Act, which gave the executive branch the power to listen in on international communications. The constitutionality of that law was challenged by a telecom company. The FISA court, in a secret decision last year, upheld the law, and now an appeals court has agreed.

All the same, this is the first time that an appeals court has ruled on the constitutionality of the president's power to eavesdrop, and the decision could be a boost for other telecom companies who are being sued for cooperating with the program.

Late Update: The ruling itself has now been released, and several commentators, including Salon's Glenn Greenwald, make the case that the Times erred in its characterization, and that the ruling bears on a narrower question. Writes Greenwald:

[I]t merely concluded that the warrantless eavedsdropping powers authorized by Congress under the (now-expired) Protect America Act do not violate the Fourth Amendment because, the court found, there is an exception to the Fourth Amendment's warrant requirement for foreign intelligence gathering. It's a bad ruling (and should be reviewed by the Supreme Court), but it has nothing to do with the President's authority to override statutes generally or violate FISA specifically...

So this ruling may not be as far-reaching as the Times appeared to suggest.

John Tanner

Tanner Sends Letter To Berry Apologizing For Racist Email

Zachary Roth | January 15, 2009, 1:31PM

So you'll remember that on Tuesday, a DOJ report found that John Tanner, the former chief of the department's voting rights section, had told a colleague over email in 2004 that he liked his coffee "Mary Frances Berry style -- black and bitter." Berry, an African-American, was at the time the chair of the US Commission on Civil Rights.

Now Tanner is trying to make amends. Moments ago he forwarded to TPMmuckraker a letter of apology he sent to Berry dated January 13.

Tanner -- who has a history of questionable racial remarks and appears still to be working on voting issues on DOJ's payroll -- explains that he only used the phrase because he had recently heard an African-American customer at a coffee shop order coffee "black and sweet -- like me."

Still, he says, it was "a very poor choice of words," "flippant" and "ill-considered."

Then -- in kind of a stretch -- he further explains: "The term bitter, of course, meant no sugar in the coffee, and was not meant as a reflection on you or your attitude towards a challenging situation."

And Tanner adds: "I am well aware of your many significant contributions to our country's racial equality and justice."

See the full letter here.

Alberto Gonzales

Holder: "I Will Review That Determination" Not To Prosecute Schlozman

Zachary Roth | January 15, 2009, 12:19PM

Not that it's likely, but Brad Schlozman may want to hope that Eric Holder's confirmation somehow gets derailed.

That's because Holder just told the Senate Judiciary committee that he wants to reconsider the Bush Justice Department's curious decision not to bring criminal charges against Schlozman, a former top department official who was found by a DOJ investigation to have politicized hiring decisions, then lied about it to Congress in an effort to cover it up.

Asked about the issue moments ago by Sen. Dianne Feinstein -- one of the lawmakers to whom Schlozman was found to have given an untruthful answer during testimony -- Holder declared: "I want to know why the determination was made not to pursue charges."

Here's his answer in full:

I understand that prosecutors in the US attorney's office in DC -- again, just based on the press reports, actually reviewed the report and then made a prosecutive determination.

If I am fortunate enough to be confirmed as Attorney General, I will indicate to you that I will review that determination. I don't know all the facts of the case, but given the findings in the Inspector General's report that are consistent with what you have said, I want to know why the determination was made not to pursue charges, criminal charges.

Asked by Feinstein about the report's findings more broadly, Holder responded:

I have not had a chance to read the report, Senator, and yet I have read the news accounts of it. What's contained in the report is very disturbing. The notion that the Justice Department would ever take into account a person's political affiliation or political beliefs in making hiring decisions is antithetical to everything the department stands for and everything I'm familiar with.

I served very proudly in the Justice Department, under Republican Attorneys General, Democratic Attorneys General, and it was never a thought given to what your party affiliation was, what your political beliefs were in hiring, in promotion decisions. What we have seen in that report I think is aberrant, but is also I think one of the major tasks the next Attorney General is going to have to do. You have to reverse that.

So we may not have seen the last word on this.

Late Update:
Here's video of the exchange between Feinstein and Holder about Schlozman:

Alberto Gonzales

Ghost Of Gonzo Stalks Holder Hearing

Zachary Roth | January 15, 2009, 11:52AM

"I want to assure you and the American people that I will be an independent Attorney General. I will be the people's lawyer," Eric Holder told the Senate judiciary committee moments ago, in response to a question form Sen. Herb Kohl.

Holder's answer suggests the extent to which the shadow of Alberto Gonzales hangs over the curent nominee's confirmation, which began this morning. Much of Senate Judiciary chair Pat Leahy's opening statement was an argument that Holder is the man to fix the problems of politicization at DOJ under Gonzales that we've chronicled at TPMmuckraker over the last two years.

Said Leahy, after noting the department's report, released Tuesday, into politicized hiring under Gonzales:

Americans must be able to trust their Justice Department. That trust must not be squandered or taken for granted. We need leaders who are prepared to take the laboring oars of a Justice Department whose dedicated law enforcement professionals have been misused and demoralized. Eric Holder is such a leader.

Just as revealingly, Republicans have centered their opposition to Holder on the claim, without much evidence, that, in fact, he's likely to be a second Gonzo. Earlier this month in a speech on the Senate floor, ranking GOPer Arlen Specter laid out the argument:

Mr. Gonzales left office accused of politicizing the Justice Department, failing to restrain Executive overreaching, and being less than forthcoming with Congress ... I am convinced that many of Attorney General Gonzales' missteps were caused by his eagerness to please the White House. Similarly, when Mr. Holder was serving as DAG to President Clinton, some of his actions raised concerns about his ability to maintain his independence from the president.

As their main exhibits in this case, Specter and other GOPers have cited Holder's 2001 pardon, as a top DOJ official in the Clinton administration, of the fugitive financier Marc Rich, which it appeared was supported by the president. GOPers have also condemned Holder's support for clemency for members of the FALN, a Puerto Rican nationalist group, at a time when Hillary Clinton was seeking a Senate seat in New York, which has a large Puerto Rican population.

Already this morning, Specter has grilled Holder on these issues, declaring, in reference to Rich: "The indicators are that you were very heavily involved and yet you testified that you were only casually involved. So there's a question of candor there."

Holder responded:

I made mistakes ... in the Rich matter. I've accepted the responsibility of making those mistakes...I should have made sure that all the prosecutors in that case were informed of what was going on. I made assumptions that turned out not to be true ... I've learned from that experience. I think that, as perverse as this might sound, I will be a better Attorney General should I be confirmed, having had the Marc Rich experience.

It's great that Holder has learned from his mistakes. But, Specter's grandstanding notwithstanding, the entire attack is pretty bogus to begin with.

There's just not much of a comparison between the level of politicization that DOJ saw under Gonzales -- when US Attorneys were removed for not bringing cases that reflected the White House's political priorities, and officials actively sought to avoid hiring liberals -- and Holder's sins during the last administration. And that excludes the numerous examples, cited by Leahy and other Holder supporters in recent weeks, of Holder acting in ways counter to the president's interest while at DOJ.

But leaving aside the minor political theater over Holder, the prominence of Gonzales' record in these hearings, as a negative marker against which to measure Holder, is perhaps the strongest testament to the unprecedented damage that the former Attorney General, and the president, did to the department.

The Daily Muck

The Daily Muck

Chris Black | January 15, 2009, 10:02AM

A former military prosecutor filed a declaration yesterday claiming that the system for handling evidence at Guantanamo Bay is so chaotic that it makes a fair prosecution nearly impossible. In his work on one detainee's case, Darrel Vandeveld found that evidence was often missing, false, or unreliable. The declaration was made in support of the release of a detainee held at the facility for six years. (Washington Post)

A federal judge has issued an order for the Bush administration to preserve electronic messages. U.S. District Judge Henry Kennedy has ordered that employees of the Executive Office of the President turn over any emails from March 2003 to October 2005. The issue of missing emails arose during the scandal involving the leak of Valerie Plame's identity as a CIA employee, and this time frame will cover the first two years of the investigation into that affair. The White House has previously claimed to have "lost" emails from this period that could possibly relate to the scandal. (Associated Press)

A federal judge ordered the release of a detainee from Guantanamo Bay yesterday, arguing that the evidence is too weak to warrant further detention. One of the prosecution's claims, that Mohammed El Gharani was a member of an al Qaeda cell in London in 1998 has come under suspicion, as Gharani was only 11 at the time. (Washington Post)

Read more »

Bradley Schlozman

DOJ Kept Tanner Working On Voting Rights -- Even After Racist Comments

Zachary Roth | January 14, 2009, 11:23AM

Yesterday we picked out a shocking excerpt from the DOJ report on politicized hiring, in which then-Voting Rights chief John Tanner told Brad Schlozman over email in 2004 that he liked his coffee "Mary Frances Berry style -- black and bitter." Berry, an African-American, was at the time the chair of the US Commission on Civil Rights, which works, among other things, to protect Americans' right to vote.

As we noted, this wasn't the first known case of Tanner making racially insensitive remarks. He left the voting-rights section soon after sparking a furor by saying that voter ID laws discriminate against the elderly, and therefore not against African-Americans, because African-Americans die younger.

But it turns out that Tanner didn't stop working on voting issues for DOJ -- he just found a new perch from which to do it. After a short stint with the Office of Special Counsel for Immigration-Related Unfair Employment Practices, he showed up again last April working on election-related issues for the Alabama Law Institute, and still being paid by the Justice Department under a federal program, the Associated Press reported at the time. (Thanks to reader Ally for the catch.)

What exactly has Tanner been working on? Says AP:

At the institute, his work will include writing about getting Justice Department approval of city annexations and new boundaries for political districts, such as legislative districts.

In other words, DOJ's response to the outrage provoked by Tanner's racist comments was to ... send him to Alabama to help with the racially charged work of redrawing political districts. Great idea!

Is the department still paying Tanner's salary today? DOJ's press office didn't immediately get back to us on that, claiming it didn't have access to the information right away.

But it looks like the answer is yes. According to that AP story from April:

[Tanner] is participating in the federal government's program to loan personnel to other government agencies. The Justice Department is paying Tanner's salary and benefits to be in Alabama through next spring.

We reached Tanner at the Law Institute. When we said we were from TPM, he told us he'd call us back, but hasn't yet.

Dick Cheney

Top Military Official: We Tortured

Zachary Roth | January 14, 2009, 10:38AM

George Bush and Dick Cheney are continuing to insist we haven't committed torture. But that's now been contradicted by the Bush administration official whose job is to decide whether to bring Guantanamo detainees to trial.

"We tortured [Mohammed al-] Qahtani," the convening authority of military commissions, Susan Crawford, told the Washington Post's Bob Woodward. "His treatment met the legal definition of torture. And that's why I did not refer the case" (for prosecution).

Al-Qahtani is a Saudi national who allegedly planned to participate in the 9/11 attacks.

According to the Post, the techniques used included sustained isolation, sleep deprivation, nudity and prolonged exposure to cold, which left al-Qahtani in a "life-threatening condition."

Crawford told Woodward:

The techniques they used were all authorized, but the manner in which they applied them was overly aggressive and too persistent. . . . You think of torture, you think of some horrendous physical act done to an individual. This was not any one particular act; this was just a combination of things that had a medical impact on him, that hurt his health. It was abusive and uncalled for. And coercive. Clearly coercive. It was that medical impact that pushed me over the edge (to call it torture).

The Post adds:

[Crawford] is the first senior Bush administration official responsible for reviewing practices at Guantanamo to publicly state that a detainee was tortured.

The Daily Muck

The Daily Muck

Chris Black | January 14, 2009, 10:01AM

An Associated Press review of Secretary of State nominee Hillary Clinton's official correspondence found that she directly intervened six times on behalf of companies who donated to her husband's foundation. The issue of the Clinton Foundation has already created a headache for the senator, with Sen. Richard Lugar (R-IN) insisting that the foundation no longer accept donations from foreign governments. (Associated Press)

The trial of Guantanamo detainee Omar Khadr was essentially reset after U.S. military commission officials secretly withdrew and then re-issued charges against the defendants in the case, according to Khadr's defense lawyer. The move is known as "withdrawal and re-referral" and nullifies all prior proceedings against defendants. The top Pentagon official in charge of commissions withdrew charges on December 17; a new trial date is yet to be determined. Khadr, a Canadian, is the only Western citizen still being held at the facility. (CBC News)

A new rule enacted by the Environmental Protection Agency will make it easier for industrial operations to expand without having to apply for new pollution permits. The most recent midnight regulation issued by the Bush administration allows plants to exclude emissions from unrelated activities when calculating whether or not new pollution control measures will be needed. The rule is part of an effort by the Bush administration to make over a pollution-control initiative called the New Source Review. (Washington Post)

Read more »

George Bush

Conyers Wants Criminal Probe Of Bush Officials' Wrongdoing

Zachary Roth | January 14, 2009, 9:41AM

Over the weekend, President-Elect Obama said we should "look forward as opposed to looking backwards" on the question of prosecuting Bush administration officials for torture, illegal wiretapping, and other possible crimes committed in the name of national security.

But yesterday, the House Judiciary committee got behind a very different approach, releasing a nearly 500-page report that recommends establishing a blue-ribbon commission -- along the lines of the 9/11 commission, but with subpoena power -- to investigate whether crimes were committed. (Last week, as we reported over at Election Central, Judiciary chair John Conyers and nine other lawmakers introduced a bill to set up such a commission.)

The report also advocates an investigation by the Justice Department, potentially involving a special prosecutor. And in addition to focusing on issues of torture, wiretapping, and the like, the report also recommends continuing to probe matters like the leaking of the name of former CIA agent Valerie Plame, and the US Attorney firings.

It'll be interesting to see how Democrats will reconcile Conyers' aggressive stance, which seems to enjoy broad support among the party's base, with Obama's more cautious approach.

Bailout

Levin Will Release TARP Contracts After All

Zachary Roth and Elana Schor | January 13, 2009, 6:15PM

There's been some confusion today over the question of whether Sen. Carl Levin intends to publicly release ten contracts, signed by the Treasury Department with banks receiving bailout funds, that Treasury has agreed to give him.

We just got the following statement from Levin's office:

Senator Levin intends to release the documents, consistent with Senate rules, after reviewing them for proprietary information.

So that clears that up.

But it leaves a larger, related confusion. As we reported earlier this afternoon, many of the firms that received bailout funds (including a number that appeared in Levin's list) have filed, with the SEC, the "Letters of Agreement" they signed with Treasury. These letters appear to be detailed contracts spelling out the terms of the transactions in question, and are publicly available on the SEC site.

We've asked Sen. Levin's office what additional information is included in the contracts he's referring to, and will keep you posted.

Bailout

Have Some Firms Released Bailout Terms In SEC Filings?

Zachary Roth | January 13, 2009, 4:53PM

So we're confused about something.

Yesterday, as we reported, Sen. Carl Levin announced that the Treasury Department had agreed to release the contracts for bailout funds that it signed with 10 firms -- though it remains unclear whether Levin's office will release them publicly.

But at least some of those companies appear to have filed documents with the SEC covering their receipt of the funds. These "Letters of Agreement" are contracts signed by bailout czar Neel Kashkari and firm executives, which spell out in detail the amount of capital the firms are receiving, on what terms, and even cover issues like executive pay limits.

For instance, here's the one for AIG (not technically a part of the TARP program) which seems similar to what Levin has obtained.

And here's the agreement Treasury came to with American Express, signed by the firm's CEO Kenneth Chenault.

And the database appears to contain similar Letters of Agreement for hundreds of other companies that have receive TARP funds -- though it's not clear that it contains such letters for all the firms Levin has asked for.

We called Levin's office to ask whether there's additional information -- beyond what's in the SEC filings -- contained in the contracts Treasury has agreed to hand over, but have not yet received a response.

Late Update: And here's what seems to be Bank of America's "Letter of Agreement" with Treasury, signed October 26. B of A is another firm that Treasury has agreed to release its contract for, according to Levin's announcement. It has received $15 billion in TARP funds.

And here's the same thing for Bank of New York Mellon, which got $3 billion in TARP funds back in October, and is another firm for which Treasury has agreed to its release the contract to Levin.

Bradley Schlozman

No Complaints Filed Against Schlozman in Kansas

Zachary Roth | January 13, 2009, 4:13PM

It looks like Bradley Schlozman will escape prosecution, at least for now, despite having been found in a DOJ report to have broken the law by politicizing hiring decisions at the department, and then lying about it to a Senate committee.

But a flood of readers has written in to ask whether Schloz might still be disbarred in the state of Kansas, where he's currently practicing law.

So we called the state's disciplinary administrator, who would handle the issue. Stanton Hazlett told TPMmuckraker that Schlozman has been registered in the state since 1994, but no complaints about him have been filed.

Indeed, Hazlett at first said he wasn't familiar with Schlozman's name, and asked us to send him the DOJ's report released this morning. Eventually, he said that he did recall the allegations of politicized hiring, but wasn't aware that Schlozman had lied to Congress about it. Unsurprisingly, Hazlett suggested that he would take such a matter very seriously.

We'll keep you posted on any developments...

Late Update: The Washington Post reports:

Justice Department Inspector General Glenn A. Fine and Office of Professional Responsibility chief H. Marshall Jarrett said they would refer their findings to legal disciplinary authorities.

According to one TPMmuckraker source: "DOJ's Office of Professional Responsibility routinely refers findings of ethics violations by Justice Department lawyers to the state bar associations in states where that lawyer is licensed to practice".

So perhaps those complaints will soon start coming in.

House Judiciary

Judge: White House Must Pass On US Attorney Documents to Obama Admin.

Zachary Roth | January 13, 2009, 2:27PM

Good news for those still hoping we'll get to the bottom of the White House's role in the US Attorney firings.

The Associated Press reports:

A federal judge says the incoming administration of Barack Obama must be given copies of documents the Bush White House has been withholding from Congress on the firings of nine U.S. attorneys.

The order by U.S. District Judge John Bates is a minor victory for the House Judiciary Committee.

...

The House committee was concerned that the documents would no longer be readily available once they were shipped to the National Archives when President George W. Bush leaves office on Jan. 20.

The White House has refused to provide the crucial documents, which were subpoenaed by Rep. John Conyers' Judiciary committee. In addition, Karl Rove, Harriet Miers, and Josh Bolten - all senior White House officials at the time of the firings, have so far defied subpoenas issued by the committee.

Alberto Gonzales

Leahy: Schloz Committed "Heinous Crime"

Zachary Roth | January 13, 2009, 2:03PM

It sounds like Sen. Pat Leahy isn't too happy about the US Attorney's office's decision not to prosecute Bradley Schlozman for making false statements to Leahy's Judiciary committee.

In a speech on the Senate floor this morning, Leahy left no doubt that he disagrees with the US Attorney's office's decision, and declared: "When somebody deliberately, purposely sets out to subvert the constitution of the United States, and then lies about it, lies about it, Mr. President, I find that a heinous crime."

You can watch the speech here, but here's the entire relevant excerpt:

I really wish that the current U.S. attorney's office appointed by this administration had prosecuted. I think that the only way you stop such blatant criminal violations by people who know better, people who are sworn to uphold the law, (unint.) that they know they'll go to jail for breaking the law. That's what should have been done. And just because they broke the law in the Bush administration and the Bush administration did not, or deemed not to prosecute, I think that raises real questions. Prosecution should be done no matter who breaks the law. I think about one of the people who testified that same investigation and said that, uh, "we swear an oath to President George Bush." I said, "no, you swear an oath to uphold the Constitution. That constitution is the constitution you're sworn to uphold and I'm sworn to uphold and it's the constitution that reflects all Americans."

...

And when somebody deliberately, purposely sets out to subvert the constitution of the United States, and then lies about it, lies about it, Mr. President, I find that a heinous crime. We will see some kid who steals a car, they'll be prosecuted as they probably should. But when you have a key member of the DoJ lie about it under oath, who subverts the consitution of the United States, all the more reason to prosecute that person. Mr. President what Mr. Schlozman did was reprehensible, it was disgusting, it was wrong, goes at the very core of America's principles. The distinguished presiding officer, like me, had the great opportunity to serve as a prosecutor, and I have every reason to believe that he did not show fear of favor when he brought prosecution, as I did, as I did not, I did not show fear of favor, most prosecutors do not. And when you have somebody who is part of the Justice Department lie under oath, and do it in a way to cover up subverting the laws that protect all of us, the civil rights laws protect all of us, white, black, brown, no matter what our race, our creed, it protects all of us. And what has marked this country since the time I was a young lawyer in the sixties, is our adherence to the civil rights laws. You can't go back to a time where they're enforced for some but not for others.

Bailout

Levin: "My Instinct Would Be To Release" TARP Contracts

Zachary Roth and Elana Schor | January 13, 2009, 1:43PM

After Carl Levin (D-MI), chairman of the Senate subcommittee on investigations, announced yesterday that he is getting copies of the contracts for companies receiving bailout money under the TARP program, we were thrilled to finally see what terms the government insisted on for taxpayer funds. But this morning in the New York Times, a Levin aide was quoted as saying that his office would not publicly release the contracts. And a Levin spokeswoman told TPMmuckraker the same thing in an email.

What gives, we asked.

And it turns out Levin is asking the same question. When we asked why his office would keep the bailout contracts under wraps, he replied simply: "My instinct would be to release them." He pointed out that legal restrictions might limit the dissemination of the info but said he would consult with his counsel on the matter.

We're still waiting to hear the reason why the contracts can't be made public, if indeed they can't. We'll keep you posted.

Arlen Specter

Leahy On Specter: "It May Be Coincidence That His Positions Have Been Those Of Karl Rove"

Zachary Roth | January 13, 2009, 1:24PM

On a conference call this morning, Sen. Pat Leahy was asked about his ongoing spat with ranking GOPer Arlen Specter over the nomination of Eric Holder to be Attorney General -- which Leahy supports and Specter has expressed extreme skepticism about.

In response, Leahy upped the rhetoric, saying of Specter:

It may be coincidence that his positions have been those of Karl Rove. I suspect it is coincidence.

Leahy added:

He was a lead supporter in the US Senate of Alberto Gonzales. I disagreed with him on Alberto Gonzales. If he could support Gonzales, who turned out to be a disaster as Attorney General and was eventually forced out by President Bush, I would think that he would be very happy to support Eric Holder.

Bradley Schlozman

Top DOJer Called Voting-Rights Official "Black and Bitter"

Zachary Roth | January 13, 2009, 1:00PM

This might be the most horrifying excerpt from the Schlozman report:

In that incident in August 2004, Voting Section Chief John Tanner sent an e-mail to Schlozman asking Schlozman to bring coffee for him to a meeting both were scheduled to attend. Schlozman replied asking Tanner how he liked his coffee. Tanner's response was, "Mary Frances Berry style - black and bitter." Berry is an African-American who was the Chairperson of the U.S. Commission on Civil Rights from November 1993 until late 2004. Schlozman forwarded the e-mail chain to several Department officials (including Principal DAAG Bradshaw) but not Acosta, with the comment, "Y'all will appreciate Tanner's response." Acosta said that when he was made aware of the incident, he required Schlozman to make a written apology to him for his role in forwarding the e-mail and that Schlozman did so.

Tanner, as longtime readers will remember, was the guy who left the voting-rights section soon after saying that voter ID laws discriminate against the elderly, and therefore not against African-Americans, because African-Americans die younger.

We've contacted both Berry and Tanner to get their reactions...

Alberto Gonzales

Why No Charges For Schlozman?

Zachary Roth | January 13, 2009, 12:33PM

Given that the DOJ Inspector General's report found that Bradley Schlozman broke the law in making politicized hiring decisions, and lied about it to Congress, why and how did the US Attorney's office make the decision to decline to bring criminal charges?

We got a bit more information on that question from Patricia Riley, special counsel to the US Attorney for the District of Columbia, which conducted the investigation.

Riley told TPMmuckraker that her office was only asked by the Inspector General's office to look into the possible perjury charges stemming from Schlozman's congressional testimony, rather than the underlying hiring decisions. She said that six career prosecutors, with between 10 and 21 years experience, conducted the investigation, reporting to Assistant US Attorney Channing Phillips (US Attorney Jeffrey Taylor recused himself from the probe).

The investigation continued until last Friday, said Riley, and included interviews with witnesses who were not contacted by the IG's report. Based on that investigation, a decision was made not to bring criminal charges.

Riley declined to say what specific information uncovered in that probe determined the decision.

We also asked the office of Sen. Pat Leahy, when they first learned that the OIG report had found that Schlozman lied to Leahy's committee. A spokeswoman responded in an email:

We received this IG report this morning, shortly in advance of the hearing, as is the usual practice of the IG's office.

Alberto Gonzales

Schloz: Voting Section Attorneys Are "Mold Spores"

Zachary Roth | January 13, 2009, 11:12AM

Here's another great Schlozman line from the report:

For example, in an e-mail on July 15, 2003, to a former colleague, Schlozman wrote, "I too get to work with mold spores, but here in Civil Rights, we call them Voting Section attorneys."

As part of the same e-mail exchange, on July 16, 2003, Schlozman wrote, "My tentative plans are to gerrymander all of those crazy libs rights out of the section."

Alberto Gonzales

Schloz Broke Law, But Won't Face Criminal Charges

Zachary Roth | January 13, 2009, 11:09AM

In case you were wondering about why the Schlozman report is dated July 2 2008 but was only released today, see this excerpt from page one:

We referred the findings from our investigation to the U.S. Attorney's Office for the District of Columbia in March 2008. We completed this written report of investigation in July 2008.

The U.S. Attorney's Office informed us on January 9, 2009, of its decision to decline prosecution of Schlozman. The Interim U.S. Attorney, Jeffrey Taylor, was recused from the matter and the decision.

We are now releasing our July 2008 report of investigation...

In other words, although the report found that Schlozman broke the law and lied to the Senate about it, he won't face criminal charges.

We've called the US Attorney's office to find out more about that decision.

Alberto Gonzales

Schloz Ripped "Psychopathic Left-Wing Organization Designed To Overthrow The Government"

Zachary Roth | January 13, 2009, 11:02AM

Here's a voicemail message Schlozman left in February 2006 for a colleague:

[W]hen we start asking about, "what is your commitment to civil rights?" . . . . [H]ow do you prove that? Usually by membership in some crazy liberal organization or by some participation in some crazy cause. . . . Look, look at my résumé - I didn't have any demonstrated commitment, but I care about the issues. So, I mean, I just want to make sure we don't start confining ourselves to, you know, politburo members because they happen to be a member of some, you know, psychopathic left-wing organization designed to overthrow the government.

Alberto Gonzales

DOJ: "Schlozman Deviated From Strict Standard"

Zachary Roth | January 13, 2009, 10:48AM

Peter Carr, a DOJ spokesman, released the following statement in response to the report on politicized hiring:

Today's report describes troubling conduct by a former supervisor in the Civil Rights Division prior to his departure from the Division nearly three years ago. The mission of the Justice Department is the evenhanded application of the Constitution and the laws enacted under it, and that mission has to start with the evenhanded application of the laws within our own Department. As today's report makes clear, Mr. Schlozman deviated from that strict standard.

The Department agrees with the recommendations outlined in the report and has already taken steps to implement them. In addition, the Civil Rights Division has taken additional steps to update its own hiring policies and to increase the role of career employees in its hiring process. As a result of these reforms, and the procedures already in place for evaluating the work and conduct of lawyers throughout the Department, we are confident that the institutional problems identified in today's report no longer exist and will not recur.

Alberto Gonzales

Leahy On Report: Schlozman Lied To Me

Zachary Roth | January 13, 2009, 10:44AM

Pat Leahy, the chair of the Senate Judiciary committee, just put out the following statement on the DOJ report into politicized hiring:

Today's report confirms some of our worst fears about the Bush administration's political corruption of the Justice Department. Not only did senior Republican appointees violate the law in hiring based on politics in the Civil Rights Division, they also lied about it when called to explain themselves to Congress.

I am particularly disturbed about the findings that a senior Justice Department appointee, Bradley Schlozmann, made false statements under oath when appearing before the Senate Judiciary Committee. Lying to Congress undermines the very core of our constitutional principles and blunts the American people's right to open and transparent government. Not only did he lie to me and the Committee, but he then refused to cooperate with Justice Department's internal oversight offices' investigation into illegal hiring practices in the Department's Civil Rights Division. The clear determination that he broke the law corrodes our trust in our system of justice and in the nation's top law enforcement agency. His actions in fact undermine the very mission of the Department's Civil Rights Division, which is charged with enforcing federal law prohibiting discrimination.

A strong and independent Civil Rights Division has long been crucial to the enforcement of our precious civil rights laws, and experienced and committed career attorneys have always been the heart and soul of that Division. Contrary to those traditions, however, this report details troubling revelations of political appointees who marginalize and force out career lawyers because of ideology, and, corrupt the hiring process for career positions. It should come as no surprise that the result, and of course the intent, of this political makeover of the Civil Rights Division has been a dismal civil rights enforcement record.

This report is just one of the final chapters in the regrettable legacy of the Bush administration at Main Justice, and it reinforces the need for new leadership. Now more than ever, it is necessary to confirm a new team to lead the Justice Department, starting with Attorney General designee Eric Holder.

Alberto Gonzales

Report: Schlozman Broke The Law, Then Tried To Hide It From Senate

Zachary Roth | January 13, 2009, 10:39AM

Here's the key excerpt, finding that Schlozman broke the law by considering political affiliations in making hiring decisions, and made false statement about it to the Senate:

The evidence in our investigation showed that Schlozman, first as a Deputy Assistant Attorney General and subsequently as Principal Deputy Assistant Attorney General and Acting Assistant Attorney General, considered political and ideological affiliations in hiring career attorneys and in other personnel actions affecting career attorneys in the Civil Rights Division. In doing so, he violated federal law - the Civil Service Reform Act - and Department policy that prohibit discrimination in federal employment based on political and ideological affiliations, and committed misconduct. The evidence also showed that Division managers failed to exercise sufficient oversight to ensure that Schlozman did not engage in inappropriate hiring and personnel practices.

Moreover, Schlozman made false statements about whether he considered political and ideological affiliations when he gave sworn testimony to the Senate Judiciary Committee and in his written responses to supplemental questions from the Committee. Schlozman is no longer employed by the Department and, therefore, is not subject to disciplinary action by the Department. We recommend, however, that, if criminal prosecution is declined these findings be considered if Schlozman seeks federal employment in the
future. We believe that his violations of the merit system principles set forth in the Civil Service Reform Act, federal regulations, and Department policy, and his subsequent false statements to Congress render him unsuitable for federal service.

Alberto Gonzales

DOJ Releases Report On Politicized Hiring

Zachary Roth | January 13, 2009, 10:31AM

The Justice Department's Inspector General has just released a report on politicized hiring at the Civil Rights division, focused on TPMmuckraker favorite Bradley Schlozman.

It's here.

More soon...

The Daily Muck

The Daily Muck

Chris Black | January 13, 2009, 9:43AM

President-elect Barack Obama will likely issue an executive order closing Guantanamo Bay within his first week on the job, an adviser says. At the same time, the President-elect admits that actually closing the facility is easier said than done, and that it will take a while to find a place to send the current occupants and to sort through important-though-tainted evidence gathered by the facility. Obama has said that closing Gitmo will be non-negotiable. (Reuters)

Officials from the Department of Housing and Urban Development admitted on Monday that the federal government is not prepared to stop predatory lenders from taking advantage of U.S.-backed home loans. One Arizona-based lender, after the state revoked its licensed and forced it into bankruptcy, was able to reapply for the license under a different name and continue business. Officials assert that the Federal Housing Authority in particular lacks legal authority and manpower to properly guard against abusive lenders. (Financial Week)

Three environmental groups are suing the EPA over new rules that endanger native marine species in U.S. waterways. The lawsuit charges that a rule requiring cargo ships to exchange ballast water before entering American coastal waters and the Great Lakes does not include more extensive guidelines needed to keep away invasive and damaging species. Ballast water was the likely medium through which coastal waters became infested with the Zebra Mussel in the late 1980s. (Associated Press)

Read more »

Bailout

Treasury To Release Some TARP Contracts

Zachary Roth | January 12, 2009, 7:04PM

Looks like the Senate may finally be prying loose a bit more information from the Treasury Department about its bailout spending.

We just received the following statement from Sen. Carl Levin:

The Department of Treasury assured me today that there will be no need to serve a subpoena, because they will provide the documents I have requested, beginning tomorrow," said Levin. "It should not have taken two months and a subpoena threat, but I -- along with Senator Susan Collins who supports obtaining these documents -- look forward to receiving the documents this week."

The Treasury Department has agreed to provide copies of the TARP contracts issued to ten companies: AIG, Bank of America, Bank of New York Mellon Corporation, Citigroup, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, State Street Corporation, and Wells Fargo.

Levin, the chairman of the Permanent Subcommittee on Investigations, had said he wouldn't vote for releasing the additional $350 billion in TARP funds requested by the Treasury unless the department revealed more information about the contracts it signed in connection with the first $350 billion.

Bank of New York Mellon has contracted with the treasury to help manage the TARP program.

We've called Levin's office to find out about getting our own copies of these contracts...

Bailout

Who's Running TARP? You Might Not Wanna Know

Zachary Roth | January 12, 2009, 6:35PM

Last week, Congress's oversight panel for the TARP funds confirmed in a report that the Treasury Department essentially has no idea what banks have done with the astronomical sums they've been handed.

Given this lack of information, we figured it might at least be helpful to know a bit about a few of the people at Treasury who are in charge of administering the massive program, and what their backgrounds might tell us about the way they've gone about it.

As the New York Times reported back in October, many of those people are former execs at Goldman Sachs, the Wall Street behemoth that used to be led by Treasury Secretary Henry Paulson.

Most prominent among those is Neel Kashkari, the 35-year old former Goldman VP who was appointed by Paulson in October as the interim head of the Office of Financial Stability (OFS), which is in charge of implementing the bailout. Kashkari's role is said by the Times to have "evolved" after Paulson changed the original bailout plan, so that Treasury would invest money directly in troubled banks.

But less attention has been paid to another Goldman alum, Kendrick Wilson, who was brought in -- after a personal call from his old Harvard Business School buddy, George W. Bush -- to advise Paulson on how to fix the financial markets.

Read more »

Alberto Gonzales

DOJ Official Caught Up In US Attorney Firings Supports Holder

Zachary Roth | January 12, 2009, 1:11PM

We're not sure whether this counts as a positive thing ... but Eric Holder, Barack Obama's nominee for Attorney General, has won the support of a former DOJ official who was seriously tainted by the US Attorney firings scandal.

In a letter obtained by Politico, former deputy AG Paul McNulty wrote that despite the issues raised by some GOPers about Holder's tenure at DOJ under Bill Clinton, he nonetheless deserved support:

When Eric Holder was Deputy Attorney General, he encountered a daily barrage of complex issues and demands," McNulty wrote. "His challenge was to exercise sound judgment, often within severely limited time constraints. As a result, it should come as no surprise that Eric can now look back and wish that he had handled some things differently. What is important, however, is that he remains the same person of high integrity, and through it all, he is far better prepared to lead the Department of Justice.

While serving as deputy AG under Alberto Gonzales, McNulty was involved in an effort to keep details of the US Attorneys firing scheme from Congress. And his chief of staff, Michael Elston, told IG investigators for a separate inquiry that he looked for GOP or conservative credentials when making hiring decisions for McNulty's office.

So McNulty's endorsement may not be the one of which Holder is most proud. Still, Pat Leahy's comment to TPM that, depsite Arlen Specter's anti-Holder crusade, there was in fact significant Republican support for Holder's nomination, appears to be being borne out.

DOJ Office Of The Inspector General

Fox's McCarver, Buck, Aikman Got US Marshals Escort From Games

Zachary Roth | January 12, 2009, 12:52PM

Baseball may be our national pastime -- and football our real national game -- but that doesn't mean taxpayers should be paying to make it easier for Fox Sports' announcer team to get away from the stadium more easily.

A new report by the Justice Department's inspector general finds that a lawyer for the U.S. Marshals Service arranged for the Marshals Service to provide a private escort for the limousines of Fox's star broadcasters, Joe Buck and Tim McCarver, after two World Series games at Fenway Park in 2007.

The report also found that the lawyer, Joseph Band, had arranged for a US Marshals escort for Buck and colleague Troy Aikman, the former Cowboys star, after a January 2008 NFL playoff game in Tampa.

Band was working as a paid statistician for Fox Sports at the time.

Bernard Madoff

Judge Lets Madoff Stay Free On Bail

Zachary Roth | January 12, 2009, 12:24PM

A judge has ruled that against revoking Bernard Madoff's bail, meaning the disgraced investment advisor will get to stay in his $7 million Upper East Side apartment -- albeit under house arrest and 24-hr surveillance -- while awaiting trial.

Prosecutors had argued that Madoff should be sent to jail, after he mailed more than $1 million worth of personal items, including gold necklaces and watches, to family and friends, contravening a court order freezing Madoff's assets.

Madoff's lawyers contended that he simply didn't realize that mailing the items would contravene the order.

CNBC adds:

A court hearing tentatively scheduled for Monday on the criminal charges against Madoff has been adjourned for 30 days, his lawyers said.

Barack Obama

Obama's SEC Nominee Headed For Bumpy Confirmation Hearing?

Zachary Roth | January 12, 2009, 11:43AM

When Mary Schapiro was announced as Obama's pick for SEC chair, she was warmly received, in general, as someone likely to restore the agency's regulatory teeth after the free-market ideologues who ran the place under Bush.

But it looks Schapiro's confirmation hearings, set to begin this week, may not go perfectly smoothly all the same.

Schapiro heads the Financial Industry Regulatory Authority, the non-governmental body that supervises oversees U.S. brokerages. And as we noted last week, Finra, under Schapiro, failed to catch Bernard Madoff's alleged "$50 billion ponzi scheme". Indeed, it conducted an inquiry into Madoff's operation that concluded, in 2007, that he had violated certain technical rules and had failed to promptly report some transactions, but identified no more serious wrong-doing -- a very similar story to the SEC's.

Still, it's also worth pointing out that Finra's investigation into Madoff was focused on his brokerage operation, which, according to a Finra spokeswoman, is all that it is legal empowered to look into. Madoff's business was split into brokerage and investment-advisory arms -- but the alleged fraud, investigators believe, was centered on the investment-advisory arm. So Finra would appear to bear less responsibility than SEC for missing Madoff.

But that's not the only potential confirmation headache for Schapiro. She was accused in two recent lawsuits of making misleading statements in an effort to build support for the creation of Finra, which was created two years ago by merging the regulatory units of the NYSE and the Nasdaq. Schapiro headed the Nasdaq regulator at the time, and became the head of Finra, seeing her yearly salary rise from $2 million to $3.1 million.

The New York Times explains the details:

Among the misstatements that she is accused of making is that the Internal Revenue Service had prohibited the NASD from paying each member more than $35,000 as part of the merger deal. Although an NASD proxy statement issued while the deal was pending said that the I.R.S. would not permit the organization to give more compensation to members, the I.R.S. did not actually issue a ruling on the matter until March 2007, long after the deal closed and three months after the members voted to approve it.

The first lawsuit was rejected by a Federal judge but is on appeal. The second suit, which is similar and was brought by a former SEC lawyer, appears to have been filed soon after Schapiro was nominated to head the SEC, though lawyers for the plaintiffs say it was in the works before then.

Looks like those hearings could be more lively than we thought. We'll be watching closely later this week...

Barack Obama

Obama On Probing Bush GWOT Policies: "We Need To Look Forward"

Zachary Roth | January 12, 2009, 11:05AM

It looks like an ambitious new effort to set up an investigation of President Bush and his top aides for potential crimes committed on their watch may have a had time getting traction.

As we reported last week over at Election Central, House Judiciary chair John Conyers recently introduced a measure to create a "National Commission on Presidential War Powers and Civil Liberties." The commission, whose members would be appointed by the resident and congress, would be designed to probe the legality of Bush administration policies on issues like torture, treatment of detainees, and extraordinary rendition.

But the president-elect appears lukewarm to the idea. Asked yesterday on "This Week With George Stephanopoulos" about the idea of a broad inquiry into those Bush administration programs, Obama said: "We need to look forward as opposed to looking backwards."

He added:

Part of my job is to make sure that, for example, at the C.I.A., you've got extraordinarily talented people who are working very hard to keep Americans safe. I don't want them to suddenly feel like they've got spend their all their time looking over their shoulders.

Here's the video:

So it doesn't exatly sound like Obama would be eager to sign Conyers' bill.

And the top two House Democrats, Nancy Pelosi and Steny Hoyer, weren't jumping to express their support for the bill when Election Central called their offices about it last week.

The Daily Muck

The Daily Muck

Chris Black | January 12, 2009, 10:07AM

Congress will look for ways to stop midnight regulations passed by the Bush administration. Sen. Harry Reid (D-NV) and Rep. Nancy Pelosi (D-CA) join Sen. Ron Wyden (D-OR) in the fight to block regulations. Wyden, as the chair of a subcommittee on natural resources, has said he wants to focus on stopping rules allowing uranium mining near the Grand Canyon and making it easier for coal companies to dump mine waste in streams and valleys. (The New York Times)

The Mayor of Baltimore was indicted on Friday for 12 counts relating to theft and perjury. Sheila Dixon is accused of using gift cards meant for the poor to buy clothing and gadgets for herself. A conviction on any one of the counts would necessitate her removal from office under Maryland's constitution. (Associated Press)

Ten percent of Guantanamo detainees are now being force-fed, as a new hunger strike begins. The new strike was likely spurred by the upcoming seven-year anniversary of the prison. Detainees are also upset at witnessing Osama Bin Laden's driver released while they remain held without being charged of any crime. 25 of 250 detainees are currently being fed through tubes in their noses. (Miami Herald)

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