John Sununu

Sununu Sits On TARP Oversight Panel, And On Board Of Firm Owned By Bank That Administers TARP

Zachary Roth | February 28, 2009, 12:00PM

John Sununu, who serves on the Congressional Oversight Panel monitoring the government's bailout program, has joined the board of a subsidiary to Bank of New York Mellon -- a firm that, in addition to receiving bailout funds, has been hired by the Treasury Department to administer the program.

Given that the Congressional Oversight Panel (COP) is charged broadly with assessing how the TARP program is working, in order to help Congress determine whether to continue injecting capital into the financial sector, the arrangement would appear to create a significant conflict of interest for the former New Hampshire GOP senator.

On Wednesday, the investment firm BNY ConvergEx Group announced that Sununu had joined its board of governors. "His experience as a thoughtful leader and champion of innovation makes him an ideal match for ConvergEx's entrepreneurial spirit," said company chairman Joseph Velli of Sununu.

According to its press release, the company is an affiliate of Bank of New York Mellon (BONY). Founded by Alexander Hamilton in 1784, BONY received $3 billion in TARP funds back in October -- less than some Wall Street firms, but not chump change.

Just as significantly, it was also picked to be the master custodian for the bailout funds. According to reports, that means it's charged with handling accounting and record-keeping for the program, and even with tracking limits on executive pay at banks that got TARP money.

Sununu was appointed to the COP by GOP Senate leader Mitch McConnell in December -- a little over a month after he was defeated by Democrat Jeanne Shaheen in his bid for reelection to the Senate.

Sununu's conflict, then, appears clear. As a member of the COP, he's in part responsible for evaluating whether taxpayers got a good deal through TARP, and for assessing whether Treasury and the banks are doing enough to track the bailout money, as well as whether banks are using the money to make loans, as they were supposed to. On the broadest level, COP's job is to help Congress figure out whether the TARP program is working as it should, and how to adjust it going forward. It's not hard to see how that responsibility could conflict with his activities as a member of the board of a company that both administers the TARP program, has received funds from it, and could potentially be in line for more.

In his work on the panel so far, Sununu has hardly been an advocate for taking a hard line on the banks. Earlier this month, the COP, which is chaired by Harvard Law professor Elizabeth Warren, released a report detailing the kinds of far-reaching reforms to bolster the financial regulatory system that the crisis has pointed up the need for. But Sununu and the panel's other Republican, Rep. Jeb Hensarling didn't sign on. Instead, they attached their own alternative report, that recommended an approach to financial regulation that was more friendly to Wall Street, and emphasized the need to rein in Fannie Mae and Freddie Mac, the government-backed mortgage firms.

No one answered a listed number for Sen. John E. Sununu in Portsmouth, New Hampshire.

We've also contacted COP to ask whether Sununu discussed his ties to Bank of New York Mellon with panel staff. And we're hearing there's more to this story ... so we'll keep you posted.

Bobby Jindal

Jindal's Office Tries To Spin Katrina Story, Digs Itself In Deeper

Zachary Roth | February 27, 2009, 4:48PM

It looks like Bobby Jindal's staff has been trying to do some damage limitation on that phony Katrina story -- with some help from Politico. But it's blowing up in their faces.

Picking up on an earlier post at Daily Kos, we wrote a post yesterday that raised questions about a key anecdote in Bobby Jindal's big Tuesday night speech.

You can watch the key excerpt here, but here's the transcript:

During Katrina, I visited Sheriff Harry Lee, a Democrat and a good friend of mine. When I walked into his makeshift office I'd never seen him so angry. He was yelling into the phone: 'Well, I'm the Sheriff and if you don't like it you can come and arrest me!' I asked him: 'Sheriff, what's got you so mad?' He told me that he had put out a call for volunteers to come with their boats to rescue people who were trapped on their rooftops by the floodwaters. The boats were all lined up ready to go - when some bureaucrat showed up and told them they couldn't go out on the water unless they had proof of insurance and registration. I told him, 'Sheriff, that's ridiculous.' And before I knew it, he was yelling into the phone: 'Congressman Jindal is here, and he says you can come and arrest him too!' Harry just told the boaters to ignore the bureaucrats and start rescuing people.

In our post, we reported -- among other red flags -- that we couldn't find any news reports that put Jindal on the ground in the affected area during the time when a boat rescue would have been needed. As we noted, we called Jindal's office twice before posting to ask them to verify the incident, but heard nothing back.

This morning, Politico's Ben Smith, noting that we and others had raised questions about Jindal's story, posted a response from the governor's chief of staff, Timmy Teepell:

It was in the days following the storm. Sheriff Lee was a hero who worked tirelessly to rescue those in danger, and he didn't take kindly to bureaucrats getting in his way.

That didn't really seem to clear things up either way -- indeed it admitted that it wasn't "during Katrina" as Jindal had originally said. Still, the headline of Smith's post characterized the statement as "stand[ing] by" the anecdote.

Team Jindal probably would have been wise to leave things there.

Instead, they went back to Smith, now telling him, in Smith's words, that Jindal "didn't imply" on Tuesday that the story "took place during the heat of a fight to release rescue boats." (Take 30 seconds to read Jindal's actual words, and you'll see that's flatly untrue -- but no matter.) Rather, Jindal spokeswoman Melissa Sellers told Smith, "It was days later .. Sheriff Lee was on the phone and the governor came down to visit him. It wasn't that they were standing right down there with the boats."

Smith added:

She said she thought Lee, who died in 2007, "was doing an interview" about the incident with the boats when the governor described him yelling into the phone.

In other words, Jindal only heard from Lee later that this had happened. He didn't actually see it happening and played no role in it himself. We posted a few hours ago, noting that Jindal's office had admitted the story was false.

But then things got weirder: Jindal's people went back for yet more.

Smith soon posted an update explaining that he had misunderstood Sellers earlier. According to Teepell, Smith now wrote, rescue efforts were in fact still underway when Jindal met with Lee. And Jindal overheard Lee yelling on the phone to justify a decision he had previously made, not giving an interview about the episode, as Sellers' earlier version had had it.

In fact, that whole thing about Jindal overhearing Lee giving an interview? It's now gone from Smith's post (though, thanks to the dangers of syndication, it remains here) as if Jindal's office never said it.

There's more. Amazingly, Sellers then argued to Smith that there is no difference between Jindal's original story as told Tuesday night, and the one her office finally settled on this afternoon. And even more amazingly, Smith added another update in which he transcribed that argument without comment, as if it were reasonable.

Then the capper: With Jindal's office now satisfied with the third iteration of its story -- a version that clearly acknowledged that the first version, told Tuesday night to millions, was false -- Teepell went back to Smith with the following comment:

"This is liberal blogger B.S. The story is clear."

And Smith, in yet another update, published it.

Good work all round!

Bank of America

Lewis Staying Mum on Merrill Bonuses

Zachary Roth | February 27, 2009, 3:49PM

Looks like Ken Lewis isn't so eager to reveal what he knows about those controversial Merrill bonuses.

ABC News reports that that the Bank of America CEO -- subpoenaed recently by investigators for New York Attorney General Andrew Cuomo -- refused to provide the AG's office with a list of which company execs got bonuses, and how much they were worth. (For good measure, ABC adds that Lewis traveled to New York for his testimony in a $50 million corporate jet. You can see video of Lewis' arrival here.)

In response, Cuomo's office issued a subpoena to B of A to turn over that information.

The session with Lewis was "ugly and combative," in ABC's paraphrase of New York officials.

Merrill CEO John Thain earlier refused to divulge similar details about the bonuses during his own sitdown with Cuomo's investigators -- claiming B of A had told him not to. But after the AG's office obtained a court order, he was more forthcoming.

We'll see whether the same thing happens with B of A. But for now, it looks like the Bush White House's approach to subpoenas -- that they're optional -- is becoming more widespread.

Bobby Jindal

Relive Jindal's Tall Tale!

Zachary Roth | February 27, 2009, 1:43PM

Reader T.A. notes that seeing the video of someone lying is more powerful than just reading the text.

So true! So here's the part of Bobby Jindal's speech from Tuesday night where he makes stuff up about Katrina. Enjoy...

Bobby Jindal

Jindal Admits Katrina Story Was False

Zachary Roth | February 27, 2009, 12:39PM

Remember that story Bobby Jindal told in his big speech Tuesday night -- about how during Katrina, he stood shoulder-to-shoulder with a local sheriff who was battling government red tape to try to rescue stranded victims?

Turns out it wasn't actually, you know, true.

In the last few days, first Daily Kos, and then TPMmuckraker, raised serious questions about the story, based in part on the fact that no news reports we could find place Jindal in the affected area at the specific time at issue.

Jindal had described being in the office of Sheriff Harry Lee "during Katrina," and hearing him yelling into the phone at a government bureaucrat who was refusing to let him send volunteer boats out to rescue stranded storm victims, because they didn't have the necessary permits. Jindal said he told Lee, "that's ridiculous," prompting Lee to tell the bureaucrat that the rescue effort would go ahead and he or she could arrest both Lee and Jindal.

But now, a Jindal spokeswoman has admitted to Politico that in reality, Jindal overheard Lee talking about the episode to someone else by phone "days later." The spokeswoman said she thought Lee, who died in 2007, was being interviewed about the incident at the time.

This is no minor difference. Jindal's presence in Lee's office during the crisis itself was a key element of the story's intended appeal, putting him at the center of the action during the maelstrom. Just as important, Jindal implied that his support for the sheriff helped ensure the rescue went ahead. But it turns out Jindal wasn't there at the key moment, and played no role in making the rescue happen.

There's a larger point here, though. The central anecdote of the GOP's prime-time response to President Obama's speech, intended to illustrate the threat of excessive government regulation, turns out to have been made up.

Maybe it's time to rethink the premise.

Late Update: Politico's Ben Smith has updated his post with the following:

UPDATE: I'd initially misunderstood Sellers to be saying Jindal and Lee didn't meet while rescue efforts were still underway. In fact, she said, the conversation took place in the aftermath of the storm, but after the boat incident.

"Bobby and I walked into harry lee's office - he's yelling on the phone about a decision he's already made," Jindal chief of staff Timmy Teepell recalled. "He's saying this is a decision I made, and if you don't like it you can come and arrest me."

Teepell said the exchange took place in the week following Katrina, when Jindal visited Jefferson Parish multiple times.

"He was boots on the ground all the time," he said.

This doesn't seem to bear on the key question. As we said, the key elements of Jindal's story were that he was in Lee's office during the crisis itself, and that his support for the sheriff helped ensure the rescue went ahead. Neither of those things was true, it now seems.

Late Video Update: Here's the relevant section of Jindal's speech.

Late Late Update: Hilariously, Jindal's office keeps going back to Politico to try to straighten out its story, but it's only digging itself in deeper.

Judd Gregg

Report: Gregg Steered Earmarks To Project In Which He Had Invested

Zachary Roth | February 27, 2009, 11:45AM

Maybe Judd Gregg's withdrawal as Commerce Secretary nominee really was for the best.

In a lengthy and detailed investigative report, the Associated Press reveals today that the New Hamshire GOP senator funneled federal earmarks to a defunct Granite State air-force base, despite the fact that he and his brother had lucrative real estate investments there.

The key details:

Gregg, R-N.H., personally has invested hundreds of thousands of dollars in Cyrus Gregg's office projects at the Pease International Tradeport, a Portsmouth business park built at the defunct Pease Air Force Base, once home to nuclear bombers. Judd Gregg has collected at least $240,017 to $651,801 from his investments there, Senate records show, while helping arrange at least $66 million in federal aid for the former base.

So let's lay out what we know here.

On one side, Judd Gregg seems to have a significant personal financial stake in Pease.
Cyrus Gregg is a partner in a development firm, Two International Group, that has built roughly a dozen office buildings at Pease. And according to state corporate records and Senate disclosure reports, Judd Gregg has invested in several of his brother's projects.

How much has Judd Gregg made from those investments?. According to the AP, which looked at Gregg's Senate disclosure filings, "at least $240,017 and possibly as much as $651,801" between 1999 and 2007 in rent and capital gains.

Now, let's look at the other side: What has Gregg done to benefit Pease from the Senate?

Over to the AP again:

In the Senate, Gregg has repeatedly won federal money for Pease's redevelopment:
• At least $24.8 million for a new federal building. The senator said the city of Portsmouth wanted to move an unattractive federal building out of its picturesque downtown. The new building hasn't been built yet, he said.
• At least $24.5 million for other New Hampshire National Guard projects at the base, including a new fire and crash rescue station, a new medical training facility, repair to an aircraft parking ramp and the upgrade of an aircraft parking apron.
• $8.9 million for a new wing headquarters operations and training facility at Pease for the Air National Guard.
• At least $8 million to help Pease's airport transition from military to civilian use, including improving terminal security, buying snow removal equipment, building an aircraft deicing area and adding a parking lot.
• $475,000 to shield office buildings at Pease from noise from the former Air Force runway, which is now used by private planes and the New Hampshire Air National Guard. Earlier, Gregg lined up $25,000 in federal money for noise monitoring equipment at Pease.
• $400,000 for development of a photonics and laser technology program at the New Hampshire Community Technical College campus at Pease. Earlier, Gregg and then-Sen. John Sununu, R-N.H., won federal money to develop the college's biotechnology lab, and education and training center at Pease.

Gregg claims he broke no laws or ethics rules, and that the earmarks don't benefit him financially. But improvements to Pease's terminal security, and efforts to shield Pease's office buildings from noise, would appear, at least potentially, to increase the value of his investment.

It's not clear whether Gregg's interest in Pease played a role in his withdrawal as Commerce Secretary nominee. AP reports:

The senator has said his withdrawal had nothing to do with anything the White House uncovered in his background. A White House spokesman, Ben LaBolt, declined to discuss the matter with the AP. AP began looking into the Greggs' activities at Pease before then but had not yet contacted them or the White House before Judd Gregg withdrew.

George Will

Hiatt: Will Challenging Climate Change Consensus Is "Healthy"

Zachary Roth | February 27, 2009, 10:51AM

Fred, what gives? You'll return Columbia Journalism Review's calls, but not ours? Where did we go wrong?

Fred Hiatt has broken his silence on that George Will global warming denialist column that set off such a hulabaloo. In an interview with CJR published last night, Hiatt defended the decision to run Will's column, despite several clear misrepresentations of science that have been thoroughly documented.

Hiatt argued that, rather than trying to prevent Will from expressing his point of view, Will's critics should take him on.

"Do I think it's somehow dangerous to have one of our many columnists casting doubt on this consensus?" Hiatt asked. "No, I think it's healthy. And let the other ones come in and slam him, if they think it's irresponsible. That's what an opinion page is for."

But nowhere in the interview does Hiatt appear to grapple with the actual argument of Will's numerous critics, which is that the column at issue contained outright misrepresentations of scientific data, on a level that goes far beyond honest differences of opinion.

Here's the relevant excerpt from CJR's report, so you can judge for yourself:

"We looked into these allegations, and I have a different interpretation than [those who signed the letter] about what George Will is and is not entitled to," said the paper's editorial page editor, Fred Hiatt. "If you want to start telling me that columnists can't make inferences which you disagree with--and, you know, they want to run a campaign online to pressure newspapers into suppressing minority views on this subject--I think that's really inappropriate. It may well be that he is drawing inferences from data that most scientists reject -- so, you know, fine, I welcome anyone to make that point. But don't make it by suggesting that George Will shouldn't be allowed to make the contrary point. Debate him."

Hiatt said that he has invited both the World Meteorological Organization and the Arctic Ice Center at the University of Illinois to write a letter for publication taking issue with anything that George wrote, but neither organization has taken him up on the offer. Hiatt added that he doesn't think Will has an obligation to point out, "in every column he writes about climate change," that such organizations disagree with his interpretation of their data.

"If you're concerned that readers of The Washington Post don't get a sense that most of the world thinks climate change is real, I think that's a misplaced concern," he said. "And I can tell you: I don't share George's view. If you read our editorial pages you would know that we believe that the evidence of climate change is sufficiently alarming to justify major changes in public policy. But, you know what? I think it's kind of healthy, given how, in so many areas--not just climatology, but medicine, and everything else--there is a tendency on the part of the lay public at times to ascribe certainty to things which are uncertain. I believe, and this me personally speaking, that there is a lot more we don't know about climatology and there's a lot more we have to learn in terms of our ability to predict climatological phenomena and how what's happening in the oceans is going to interact with what's happening in the atmosphere. And do I think it's somehow dangerous to have one of our many columnists casting doubt on this consensus? No, I think it's healthy. And let the other ones come in and slam him, if they think it's irresponsible. That's what an opinion page is for."

Separately, yesterday we got a sneek peak at Will's latest column, in which he digs in his heels on the issue of global warming. (It's now up on the Washington Post site.)

We decided to leave the debunking of Will's self-defense to others more expert in the subject. And Carl Zimmer, who writes frequently about science for the New York Times, has now done so, in a detailed rebuttal to Will posted on the website of Discover magazine, that concludes:

In trying to justify an old error, Will can't help making new ones. But at this point, I'm not expecting any corrections.

Late Update:
Andrew Revkin of the New York Times has added his own detailed rebuttal of Will's latest column, which itself was framed as a response to a piece by Revkin earlier this week that criticized Will's original column.

We await Will's response to Revkin's response to Will's response to Revkin's response to Will.

The Daily Muck

The Daily Muck

Chris Black | February 27, 2009, 10:03AM

The Justice Department is preparing to bring charges against a man identified as an al Qaida operative who is currently being held on American soil. Ali Saleh Kahlah al-Marri, whom the Bush administration had intended to hold indefinitely without charges, will be tried in a civilian court, officials said yesterday. The Justice Department had faced a March 23 deadline to explain to the Supreme Court whether or not it would uphold the Bush administration's policy. The decision to try al-Marri in a civilian court allows the new administration more time to review detention policies. (New York Times)

Lawsuits filed against large financial companies, including Citigroup, Merrill Lynch and Bank of America, contend that female employees are bearing the brunt of recent downsizing. Plaintiffs note that female employees made up 64 percent of Wall Street employees before the crash, and yet 72 percent of the last 260,000 jobs cut were held by women. The firms dispute the allegations, saying it is hard to show that there is no evidence gender is playing a role in firing decisions. (Forbes)

The Justice Department has filed a lawsuit against drug maker Forest Laboratories for defrauding the government of millions of dollars by marketing two antidepressants for use in children and young adults. The complaint says that Forest Laboratories concealed a study that showed the drugs were not effective in children and could cause patients to become suicidal. The lawsuit also charges that the company gave kickbacks -- in the form of baseball tickets, gift certificates to expensive restaurants, and paid vacations -- to doctors who prescribed its drugs. (New York Times)

Read more »

Bank of America

On Merrill Bonuses B of A's Statements Don't Match Reality

Zachary Roth | February 26, 2009, 6:29PM

As New York Attorney General Andrew Cuomo's investigation continues, it's becoming increasingly clear that Bank of America, and its CEO Ken Lewis, haven't been straight on the subject of what they knew about those outlandish Merrill bonuses.

ABC News yesterday revealed details of the agreement signed by the two banks back in September, when they agreed that B of A would take over Merrill starting January 1. According to it sources, the agreement says that bonuses "shall be determined by the company (Merrill) in consultation with the parent (Bank of America)."

The network added that the two firms at first agreed that Merrill could hand out up to $5.8 billion. That figure was then added to "under $4 billion" after a conversation between Merrill CEO John Thain and a top B of A exec Steele Alphin, who's a close Lewis confidant.

In other words, Bank of America had a clear role in working with Merrill to determine the amount of the bonuses awarded.

But that's not at all how B of A has represented things.

When the Financial Times first broke (sub. req.) the bonus story last month, B of A told the paper:

Merrill Lynch was an independent company until January 1 2009. John Thain (Merrill's chief executive) decided to pay year-end incentives in December as opposed to their normal date in January. B of A was informed of his decision.

And in his testimony before Congress earlier this month, Lewis said:

They were a public company until the first of the year, they had a separate board, separate compensation committee and we had no authority to tell them what to do, just urged them what to do.

It's not clear whether that that outright contradicts the language of the agreement, as ABC has reported it. But whether or not the agreement gave B of A formal "authority" to set Merrill's bonus levels, it certainly gave them an explicit role in the process (assuming ABC's sources are rendering the wording of the agreement accurately). Which is a lot more than B of A's few carefully crafted public statements on the subject have implied.

Thain, Lewis, and Alphin have all been subpoenaed by Cuomo (Thain has now "told all, says ABC), so you've got to think we'll be getting to the bottom of this soon. And it doesn't seem like it'll look good for the increasingly embattled Lewis when we do.

CIA

Report: Goss Knew Foggo Shared A Girlfriend With Russian Spy, But Hired Him Anyway

Zachary Roth | February 26, 2009, 4:24PM

The Dusty Foggo story has never reflected well on Porter Goss -- the man who, as CIA director, gave Foggo the number 3 job at the agency. But it looks like we didn't know the half of it.

Congressional Quarterly has a juicy scoop:

Kyle "Dusty" Foggo's CIA dossier included allegations that he was sharing a woman with a suspected Russian mole, according to a top former spy agency official and other sources.

CIA Director Porter J. Goss knew about the allegation when he hired Foggo to be the agency's executive director, its third highest official, an aide said today.

But Merrell Moorhead, an aide to Goss at the CIA from 2004 to 2006, said CIA security officials later withdrew that and other serious allegations about Foggo's record and "gave him a clean bill of health."

One former senior CIA official told CQ:

Everybody knew about him and Felix," said a former senior CIA official, who talked about Foggo on condition of anonymity. "It's scandalous that Goss hired him.

This news jibes with a report yesterday by the national security reporter Laura Rozen that Goss was aware of problems in Foggo's counter-intelligence file when he hired him.

Global Warming

In New Column, Will Sticks To His Guns On Global Warming

Zachary Roth | February 26, 2009, 3:41PM

Just when we thought we were out, they pull us back in.

We thought we were done with the topic of George Will and climate change. But now we've gotten an advanced look at Will's latest column, set to run tomorrow in the Washington Post and in syndication. And it amounts to a stubborn defense of the amazing global warming denialist column he published earlier this month, that was ripped apart by just about everyone and their mother -- including us.

Will's new effort is framed as a response to a New York Times story, by science reporter Andrew Revkin, from earlier this week, which asserted that Will's earlier column, published February 15, was guilty of "inaccuracies and overstatements," in the view of experts. (That Revkin story itself provoked some blogospheric ire by equating Will's out-and-out distortions with some minor exaggerations on the other side by Al Gore -- but that's a whole other story.)

In the new column, Will makes two central claims, one directed narrowly at Revkin, the other more broadly at critics of the February 15 column.

First, he suggests that Revkin is guilty of sloppy journalism, noting that the Times writer doesn't name the experts who judged the February 15 column inaccurate, and adding that Revkin contacted him for comment only late in the afternoon of the day before his story ran.

Revkin didn't immediately respond to an email from TPMmuckraker seeking a response to those charges.

Second, Will stands by the substance of the February 15 column, maintaining, in the case of the key factual dispute, that he had accurately reported the findings of a respected climate research center on the question of sea-ice levels. Though the center has since put out a statement disavowing Will's use of its data, Will claims that last month it posted confirmation of that very data on its web site -- and, getting all bloggy, includes a link.

We'll leave it to others to parse the finer points of this defense -- though it's immediately noticeable that Will doesn't mention that the center's confirmation of its findings notes that the data concerns global sea ice levels, rather than northern hemispheric levels. Global levels, it says, "may not be the most relevant indicator."

But after Will and Post editorial page editor Fred Hiatt declined to answer TPMmuckraker's questions about the column -- leaving that task to the paper's ombudsman, who cited the paper's "multi-layer editing process" -- it's certainly intriguing that Will has chosen to wade back into the muck.

Brent Wilkes

Foggo Sentenced To Over Three Years In Prison

Zachary Roth | February 26, 2009, 2:33PM

The Associated Press reports that Dusty Foggo, the former CIA number 3 who pleaded guilty to steering contracts to his friend the defense contractor Brent Wilkes, has been sentenced to 37 months in prison -- just what prosecutors were recommending.

Foggo received tens of thousands of dollars worth of lavish gifts and vacations, in exchange for helping Wilkes get no-bid contracts, according to prosecutors.

Wilkes has pleaded guilty to bribing then-GOP congressman Duke Cunningham.

Yesterday, we reported on a treasure trove of court documents released in the case, which shed light on Foggo's scheme.

Bobby Jindal

Jindal's Katrina Story: A Tall Tale?

Zachary Roth | February 26, 2009, 1:10PM

The evidence continues to grow that the story Bobby Jindal told Tuesday night -- about how he backed a tough-talking sheriff's efforts to rescue Katrina victims, government red-tape be damed -- was, how to put it ... made up.

Delivering the GOP response to President Obama's speech to Congress, Jindal had his first chance to impress a national audience. To do so, he told the following story:

During Katrina, I visited Sheriff Harry Lee, a Democrat and a good friend of mine. When I walked into his makeshift office I'd never seen him so angry. He was yelling into the phone: 'Well, I'm the Sheriff and if you don't like it you can come and arrest me!' I asked him: 'Sheriff, what's got you so mad?' He told me that he had put out a call for volunteers to come with their boats to rescue people who were trapped on their rooftops by the floodwaters. The boats were all lined up ready to go - when some bureaucrat showed up and told them they couldn't go out on the water unless they had proof of insurance and registration. I told him, 'Sheriff, that's ridiculous.' And before I knew it, he was yelling into the phone: 'Congressman Jindal is here, and he says you can come and arrest him too!' Harry just told the boaters to ignore the bureaucrats and start rescuing people.

But there are several pieces of evidence that suggest this just didn't happen. Nothing, to be sure, that definitively proves the story was made up. But more than enough to declare it highly suspicious.

First, Jindal's story has Lee railing against the red-tape in the midst of the crisis. But Lee, the sheriff of Jefferson Parish in suburban New Orleans, told CNN he didn't find out about the license and registration issue until about seven days after the incident.

Here's Lee talking to Larry King (via Nexis) a week or so after Katrina:

I fully believe that when then matter is looked into, we tried to get some boats in the water early on. When I realized that we had a problem, I was the one that made the call in WWO (UNINTELLIGIBLE) radio if there was anybody with a boat to come to a place so that we can get the boats in the water because I was around when -- the other big hurricanes, and most of the rescue done early on were individual fisherman, recreational fisherman that had boats that went in the water. Those boats where not allowed to get into the water when they were needed and I just found out about seven days later one of the reason boats couldn't get in was they didn't have enough life preservers and some of them didn't have proof of insurance. And I'm sure that there's a FEMA regulation that says that. But when a storm of this magnitude hits, you through those regulations out the window and you do what you have to do and start saving lives. (our itals)

It's within the realm of possibility, just, that Lee and Jindal are talking about two separate incidents. But from the way the details line up, it's reasonable to assume they're the same.

That's just the tip of the iceberg. Daily Kos diarist xgz assembled a slew of additional evidence suggesting that Jindal took some serious dramatic license, at best. To summarize:

According to numerous reports, Harry Lee did not leave the affected area of New Orleans during the crisis. But there is no reported evidence of Jindal having set foot in the area during the period when people were still stranded on roofs -- which, based on a review of news stories from the time, was only until September 3 at the very latest. Indeed, the evidence strongly suggests he did not...

When the storm made landfall on August 29, Jindal was on a foreign trip. His family was evacuated to his parents' house in Baton Rouge, and when he returned, he went straight there to join them. In a September 1st CNN interview given from Baton Rouge, Jindal talked about taking an aerial tour of the disaster area, but didn't mention anything about having been on the ground personally. We've reviewed Nexis and other sources, and can find no news reports putting Jindal on the ground in the affected area during the few days after Katrina struck when people might still have needed boats to rescue them from rooftops.

Schedule issues aside, it's also noticeable that Jindal has talked or written several times before about the problems of excessive red tape during Katrina, but has never told this story.

On September 8, the Wall Street Journal published an op-ed by Jindal detailing how "[i]n Katrina's wake, red tape too often trumped common sense." Jindal listed several anecdotes to illustrate the problem, including one that involved a sheriff, and another about a boat evacuation. But nothing that resembled the Lee story he told Tuesday. You'd think that would have been his lead example.

And in 2008, Jindal told Human Events:

There are thousands of these stories. I talked to a sheriff in an area where they had people with boats that were ready to go in the water and rescue people and they were turned away because they didn't have proof of registration and insurance, they didn't bring the right paperwork. The bureaucracy was just awful.

The implication here is that Jindal talked to the sheriff after the fact, not that he was in his office during the moment of crisis.

As we said, none of this settles the question definitively. But it certainly raises a whole lot of questions about Jindal's tale. Those questions were enough for MSNBC's Keith Olbermann, in a short segment last night on the controversy, to conclude that the story is "apparently not true."

Of course, Harry Lee could put this to rest once and for all. But he died in 2007.

We called Jindal's office, asking for any information that might help establish the story's veracity. They haven't gotten back to us.

The Daily Muck

The Daily Muck

Chris Black | February 26, 2009, 10:12AM

The Federal Emergency Management Agency announced yesterday that it began an investigation of its New Orleans office last week, relating to equal employment opportunity complaints. The news came after Rep. Anh Cao (R-LA) raised questions about cronyism and other misconduct at the office. (Associated Press)

For the second time since the Inauguration, the Obama administration finds itself defending Bush's use of state secrets claims. The Justice Department is seeking to delay hearings in a lawsuit involving warrantless wiretaps of a now-defunct Saudi Islamic charity operating in Oregon. The Bush administration had previously warned that the judge in the trial would not be able to protect against the release of sensitive information if the trial were allowed to proceed. The case is the first and only to challenge warrantless wiretapping. (Associated Press)

A report published by the Department of Energy's Inspector General Monday found that 15 government facilities licensed to hold nuclear materials did not have as much in their inventories as had been originally recorded. The report points to accounting errors, and lax record-keeping regarding nuclear material loaned to other institutions such as universities and commercial research facilities. Among the materials listed as missing were enriched uranium and plutonium. The report was a follow-up on a 2001 probe that found similar problems with record keeping. (NTI.org)

Read more »

Dusty Foggo

Report: Goss Knew Of Foggo's Shady Past

Zachary Roth | February 25, 2009, 5:23PM

A great nugget from Laura Rozen...

Source said that Goss lied in his testimony, that he was not aware about the problems with Foggo when he hired him for executive director. He said that a major fight had broken out between Goss staffer Patrick Murray and then associate deputy director of operations Michael Sulick about the Foggo hiring. "Murray told ADDO/Counterintelligence Mary Margaret that if Dusty's background got out to the press, they would know who to come looking for. Mary Margaret tried to warn them that Dusty Foggo had a problematic counterintelligence file. Sulick defended Mary Margaret. Goss told deputy director of operations Steve] Kappes he had to fire Sulick." After that, Kappes and Sulick quit. "Goss bears major responsibility here," source says. It was finally the "White House tht demanded that Goss fire Dusty and he refused." So they both got fired.

It's not clear whether the fight that the source refers to occurred before or after Foggo's actual hiring. Though the context -- and the source's claim that Goss lied in his testimony -- suggest it was before.

Earlier, we posted Goss's explanation of the circumstances under which he hired Foggo, in which Goss gives the clear impression he believed Foggo to have a clean record when he hired him.

Allen Stanford

Baucus Committee: We Prefer Different Approach To Tax Haven Problem

Zachary Roth | February 25, 2009, 4:55PM

Yesterday, we revealed how a bill that might have sought to close off-shore tax loopholes -- and which might have helped catch Allen Stanford -- died in Max Baucus' Senate Finance committee in 2007.

Now, a Finance committee aide has provided an emailed statement to TPMmuckraker, making the case that the committee didn't take up the bill, sponsored by Carl Levin, because Baucus differed with some aspects of the bill's approach, and noting that Baucus is working on a separate bill to address the problem.

In a nutshell, according to the statement, Baucus favors an approach more targeted at giving the IRS the necessary tools to detect tax cheats than was the Levin bill, which took a broader tack.

The Chairman announced in 2008 that he is writing legislation to address the use of tax havens by individuals. In particular, Senator Baucus and his staff are working with Treasury and the IRS to give them the right tools to detect the tax abuse we are all concerned about. Senator Baucus's goal is to move the sharpest possible bill that will give the IRS tools -- including additional reporting requirements -- to determine when a taxpayer uses a tax haven and the identity of the user.

It will be important to move legislation that gives the IRS the best chance to find abusers in the first place, in order to apply certain rebuttable presumptions that would make income US-sourced income on which US taxes should be paid.

The bill you mention is quite broad, and while it creates a series of changes to the burden of proof, that only helps once the IRS has detected the use of a tax haven.

The Finance Committee actively fights offshore tax havens - in the JOBS bill with inversions policy, tax shelter penalties, and increased transparency with regard to tax shelter promoters; in last year's military bill, with provisions to stop US companies with Federal contracts from setting up entities in tax havens to run employees through in order to avoid employment taxes. FOGEI/FORI in the energy bill tightened up a bit the way oil and gas pay US tax on foreign-earned income. Other proposals have been made public as well, particularly with regard to Bermuda reinsurance. The Committee also sent the GAO to Ugland House in the Cayman Islands to investigate one of the most notorious suspected tax havens in the world. And the Committee will take this issue up again at a hearing in March.

In other words, according to the aide, this was an issue of legitimate policy differences -- not an effort by Baucus to kill legislation opposed by a contributor.

We'll be watching for those hearings in March.

Porter Goss

Goss: Not My Fault -- Foggo Assured Me He Was Clean!

Zachary Roth | February 25, 2009, 3:31PM

Also in the appendix to the Dusty Foggo sentencing memo: former CIA director Porter Goss offers a pretty lame justification for how he came to appoint a crook like Foggo to the agency's number 3 post:

Says Goss:

Due to public criticism of the CIA after the attacks of September 11, 2001, and criticism of my office after the prior candidate for the Executive Director's position was withdrawn, it was imperative to me that the selection of the Executive Director position be someone whose personal and professional conduct was beyond reproach. When Mr. Foggo came to speak with me about the Executive Director position in late 2004, I conveyed this requirement to him. I asked him directly whether there was anything I needed to know about his candidacy that would reflect poorly upon the Director's office or upon the CIA. He denied that there was anything. In reliance upon Mr. Foggo's assurances, and upon his having cleared the inter-agency vetting process, I selected him to be my Executive Director in 2004.

Had I known at the time that I was considering Mr. Foggo to be my Executive Director that he had engaged in the conduct he has admitted in his Plea Agreement and Statement of Facts, I absolutely would not have selected him to be my Executive Director nor would I have approved him for the Employee Performance Award that he received in August 2005."

CIA

Former Counter-Intel Chief "Flabbergasted" By Goss's Choice Of Foggo For Number 3 Post

Zachary Roth | February 25, 2009, 2:55PM

I was flabbergasted when Mr. Foggo was selected as the Executive Director. I found Director Goss's selection to be quite revealing, that Mr. Goss would be taken in by a "con man" like Mr. Foggo.

That's the view, as reflected in the appendix to the government's sentencing memo, of Jim Olson, a former CIA chief of counter-intelligence, who also served as CIA's chief of station at several different overseas locations, and supervised Foggo. (Olson is identified only as "John Doe #2", but details of his career and current employment make clear that it's him.)

That sounds like an indictment of Porter Goss, who has already taken his fair share of lumps in the Foggo matter, after appointing Foggo to be the agency's number 3 man.

But it's also worth considering that Olson admits in the memo that he too was impressed by Foggo, recommending him for continued employment -- even though he knew about the incident in which Foggo assaulted a pedestrian, and about the fact that Foggo had failed to report contacts with numerous foreign women, as CIA rules require (for good reason.)

Says Olson:

As a result of his police encounter and his failure to report contacts with foreign nationals as required, I considered Mr. Foggo to be morally suspect at that point. Despite my misgivings, I recognized that Mr. Foggo was talented at his job as a Chief of Support, and I recommended him for continued employment with the Agency.

Sounds like either Foggo was exceptionally good at winning people over, or his supervisors were a little to easy-going.

Olson, who now teaches at Texas A&M's Bush School of Government and Public Service as a "CIA-Officer-in-Residence" didn't immediately respond to TPMmuckraker's request for comment.

Brent Wilkes

Foggo's Plan To Succeed Cunningham In Congress

Zachary Roth | February 25, 2009, 2:23PM

The appendix to the Dusty Foggo sentencing memo also contains some fascinating information abut Foggo's plans to run for Duke Cunningham's congressional seat (when the Dukester stepped down) -- and to commit immigration fraud as a favor for a potential political supporter...

Foggo maintained these ambitions after becoming Executive Director, and was very specific that he was considering running for Congress only in San Diego, for Cunningham's seat, and not in Virginia or anywhere else in California. Nowhere else, of course, could Foggo tap into the network and funding that his best friend Wilkes offered in San Diego. As Foggo admitted to a confidant, Wilkes was to be a "key partner" in Foggo's Congressional plans. Motivated by money, Foggo wrote to Wilkes from the Overseas Location:

"I met a very interesting guy here a few months ago. Major money. He has a son that ran into problems with INS. Absolutly [sic] no crime stuff, just stupid 20-year old stuff. We need someone up high in the INS food chain or it will not get fixed for 5-6 years. If Ben is not with INS anymore, then maybe we can get [Congressman] Duke [Cunningham] to write a joint letter with Cong. Bono. They have contacts with Bono and we could get a letter from her no question. Do you think Duke would join? It would be worth a little campaign help, I'm sure."

Dusty Foggo

Foggo Claimed Credit For Getting Mistress's Boss Fired

Zachary Roth | February 25, 2009, 1:59PM

In addition to his penchant for road rage, Dusty Foggo certainly seems to have known how to treat a lady.

The sentencing memo tells how, after Foggo moved from overseas to the CIA's headquarters -- leaving his wife and family behind -- he managed to get a Langley job for his mistress too. Then, when the mistress's performance was criticized by a highly-decorated supervisor, Foggo got the supervisor fired, telling his mistress she could "thank him later."

Since at least mid-2004, Foggo had had his eyes on ER, a woman he met at the Overseas Location. When Foggo returned to Headquarters in November 2004, his family remained overseas. With his family far away, he moved quickly to bring ER much closer by recruiting her to the CIA. Foggo brought ER to headquarters in November 2004 and introduced her to several officials, effectively endorsing her as a candidate for employment. Shortly thereafter, ER applied for a position with the CIA's Office of General Counsel ("OGC"). She was interviewed later that month.

As CIA hiring officials began to investigate ER's background, however, they learned of problems in her previous government employment that precluded her from employment with the CIA: she had engaged in improper conduct with a superior and had impeded the Inspector General's investigation of the conduct by destroying evidence. As a result, on or about February 28, 2005, a CIA official sent ER a rejection letter.

In the meantime, Foggo had arranged for his family to remain overseas - at the public's expense - and his relationship with ER had become sexual in nature. The rejection of her employment application infuriated Foggo. He summoned the Managing Associate General Counsel (the "MAGC"), to his office, where Foggo insisted that ER was vital to TK. When the MAGC raised his concerns about the Inspector General's report regarding ER's conduct, Foggo twice warned him to be careful how he referred to ER.

Far from debunking the IG's report of ER's conduct, Foggo was actively engaged in the same type of relationship with her. Nevertheless, Foggo forced OGC to hire ER. After OGC relented, Foggo pressured CIA employees to expedite the completion of ER's vetting, including having her paperwork tagged as an "ExDir Interest."

ER began her employment with the OGC's Administrative Law Division in July 2005. Although she was new to the Agency, ER made very little effort to perform the work required of her at an acceptable level. She resisted her supervisor's feedback and outright refused requests that she redo work that was sub-par. Instead of being receptive to her supervisor's critiques and suggestions, ER made it clear that she had influence with Foggo. Indeed, she did. Her supervisor had been an attorney with the OGC for 20 years, during which time she received numerous performance awards and even the Career Intelligence Medal, which rewards "exceptional achievements that substantially contributed to the mission of the Agency" over the course of a career. Within a month of crossing Foggo's mistress, however, she suffered a humiliating firing by Foggo. Foggo took credit, reminding ER that she could thank him later.

As Henry Kissinger may or may not have put it: Power is the ultimate aphrodisiac.

Duke Cunningham

Foggo's Road Rage ... Plus: Your Help Needed!

Zachary Roth | February 25, 2009, 11:33AM

There are certainly more important revelations contained in the trove of court documents filed yesterday in connection with the sentencing of former CIA Number 3 Dusty Foggo, who pleaded guilty in the Duke Cunningham bribery scandal. Indeed, Pro Publica's Marcus Stern has already picked out some key ones.

But this excerpt from the government's sentencing memo certainly sheds some light on what kind of a guy Foggo was:

In 1989, while stationed overseas, Foggo stopped his car in front of a bicycle bypass. One frustrated passing cyclist slapped the trunk of Foggo's car. After the two exchanged words, Foggo responded by knocking him off his bike and punching him in the face. Then, much as he would later lie to others at the CIA about the "cigar bar" cover story for him and JC, Foggo concocted a story that local police officers had fabricated the entire incident as payback for Foggo's having spurned their efforts to solicit a bribe from him. Foggo's superiors and the local officials considered his explanation to be "unrealistic and implausible." Foggo's chief of station was convinced that Foggo was lying to him. Foggo's assault on one of its citizens so outraged that nation that officials there filed a Diplomatic Protest with the U.S. Ambassador.

We've got a feeling there's plenty more like that out there. But as always with this stuff, we could use your help. So take a look through the court documents, and let us know, in comments or emails, what else is in there...

The government's sentencing memo and its appendix are here and here. Prosecutors' response to Foggo's sentencing memo is here.

Happy hunting!

The Daily Muck

The Daily Muck

Chris Black | February 25, 2009, 10:06AM

Alaska governor Sarah Palin's financial woes continue, as a special investigator hired by the Alaska Personnel Board looking into trips taken by the first family insists that Palin reimburse the state for nine trips taken by her children. Palin was accompanied by her daughter Bristol on one trip to New York to attend Newsweek's annual Women and Leadership conference. According to the special investigator, the state of Alaska will only pay for family travel if family members serve an important state interest on the trip. Palin has 120 days to pay up. (Associated Press)

A group of wealthy Americans is suing Swiss bank UBS in federal court to keep their identities secret. The suit alleges that UBS' actions in cooperating with U.S. investigators violate Swiss bank secrecy laws and amount to illegal activities involving foreign authorities. UBS, the world's largest private bank, had been charged by US authorities with conspiring to help wealthy clients avoid their taxes. As part of a settlement, the bank agreed to release the names of 19,000 clients. (New York Times)

Jackson, Mississippi mayor Frank Melton may face another trial after a judge declared a mistrial yesterday on charges that Melton lead a vigilante-style raid on a crackhouse that included the use of a sledgehammer to break down the building's front door. The mistrial was declared after jurors failed to reach a verdict after five days of deliberation. Melton had been criticized previously for his Wild West-style of governing, which included participating in police checkpoints and passing out cowboy hats to city council members. (Associated Press)

Read more »

Allen Stanford

Ney Praised Stanford In Congressional Record -- Just As He Did For Abramoff

Zachary Roth | February 24, 2009, 6:21PM

Did Allen Stanford get the Jack Abramoff treatment from Bob Ney?

Via the Sunlight Foundation, check out what Ney, the Ohio GOP congressman who went to jail for his role in the Jack Abramoff scandal, entered into the Congressional Record in September 2005:

Mr. Ney: Mr. Speaker --

Whereas, Allen R. Stanford has been recognized as the 2006 Recipient of the "Excellence in Leadership Award" by the Inter-American Economic Council ; and

Whereas, Allen R. Stanford has been acknowledged for his performance and leadership in the areas of finance and investments; and

Whereas, Allen R. Stanford should be commended for his service as the CEO of the Stanford Financial Group based in Houston, Texas.

Therefore, I join with the residents of the entire 18th Congressional District of Ohio in honoring and congratulating Allen R. Stanford for his outstanding accomplishments.

We already knew that Stanford and Ney, who sat on the House Financial Services committee, were tight. Here they're positioned right next to each other at a 2004 Washington event put on by the Stanford-backed Inter-American Economic Council.

(Looks like Ney even got a speaking gig at that event).

And Ney's chief of staff, Wil Heaton -- who also pleaded guilty in connection with the Abramoff scheme -- went on that now-famous (kind of) 2005 junket to Antigua for lawmakers and their aides, paid for by the IAEC.

But the statement unearthed by the Sunlight Foundation suggests the relationship was even cozier. Indeed, it fits an intriguing pattern:

According to Abramoff's plea agreement, one of the "official acts" that Ney took on behalf of Abramoff was an October 2000 agreement "to insert a statement into the Congressional Record which praised the new owner of the Florida gaming company, Abramoff's business partner."

The Abramoff partner was Adam Kidan, who in 2005 pleaded guilty to conspiracy and fraud in connection to his venture with Abramoff. Abramoff and Kidan gave $10,000, in Ney's name, to the National Republican Congressional Committee.

Just as Abramoff and Kidan sought to get a PR boost by having nice things said about them in Congress, Stanford may have also have stood to benefit from Ney's move. Stanford's ability to attract investors depended on maintaining a sterling reputation. Having his "outstanding accomplishments" praised in the Congressional Record could go a long way to polishing that reputation.

What might Ney have gotten in return? Well, he received $26,200 in campaign contributions from Stanford Financial Group employees. And, even more interestingly, the Sunlight Foundation's Paul Blumenthal notes that the majority of that sum, $14,200, came just over a month after the Congressional Record statement -- after Ney had gotten nothing from Stanford for all of 2005.

Blumenthal also notes that, during more trying times for the congressman, Stanford became a contributor to Ney's legal defense fund.

So, memo to federal investigators: if you see Bob Ney praising anyone else in the Congressional Record, it might be worth getting a little suspicious.

Bailout

Dems Tell Northern Trust To Repay Taxpayers For LA Spending Spree

Zachary Roth | February 24, 2009, 4:00PM

In what could be the first instance of a congressional committee citing reporting by TMZ (or maybe not!), Democrats on the House Financial Services committee, led by Rep. Barney Frank, have sent a letter to the CEO of Northern Trust bank, demanding that the bank re-pay taxpayers for a lavish spending spree -- featuring a Sheryl Crow concert and gifts of Tiffany's trinkets -- surrounding a recent golf tournament it sponsored for clients.

The splurge, which took $1.5 billion in bailout money last fall, was first reported earlier today by TMZ.com, the entertainment site.

TMZ offered a rundown of the trip's highlights:

- Wednesday, Northern Trust hosted a fancy dinner at the Ritz followed by a performance by the group Chicago.

- Thursday, Northern Trust rented a private hangar at the Santa Monica Airport for dinner, followed by a performance by Earth, Wind & Fire.

- Saturday, Northern Trust had the entire House of Blues in West Hollywood shut down for its private party. We got the menu -- guests dined on seared salmon and petite Angus filet. Dinner was followed by a performance by none other than Sheryl Crow.

There was also a fabulous cocktail party at the Loews. And how's this for a nice touch: Female guests at the Chicago concert all got trinkets from ... TIFFANY AND CO.

In the letter, Frank and his colleagues wrote that the spending "demonstrates extraordinary levels of irresponsibility and arrogance," and called on Northern Trust CEO Frederick Waddell to return the money to taxpayers.

In response to the TMZ report, a spokesman for the Chicago-based bank told the Chicago Tribune that the bank had committed to sponsor the golf tournament over a year before it got bailout money. He continued: "The reason Northern Trust sponsors the Open is it's an integral part of its marketing program. It's about client relationships and showing appreciation for clients."

The full letter from the Financial Services committee Democrats follows after the jump ...

Read more »

John Murtha

With PMA Earmarks In Spending Bill, GOPer Forces Vote On Probe

Zachary Roth | February 24, 2009, 3:24PM

This could get awkward for some Democratic lawmakers.

Rep. Jeff Flake (R-AZ), the small-government scourge of Congressional earmarkers, has introduced a resolution that proposes launching an ethics investigation into the connection between earmarks and campaign contributions, reports Congressional Quarterly.

Meanwhile, the House is about to vote on an omnibus spending bill that not only contains thousands of earmarks, but some for clients of the PMA Group. That's the DC-area lobbying firm that's in the process of disintegrating, amid reports that it was raided by the FBI last month as part of an investigation into its political contributions.

Which lawmakers sponsored those earmarks? CQ reports:

Flake's office released a compilation of eight earmarks worth $7.7 million in the bill. Taxpayers for Common Sense, a watchdog group, sent out the same list and identified the individual sponsors of the earmarks as Reps. Peter J. Visclosky of Indiana, Tim Ryan of Ohio, John B. Larson of Connecticut, Brad Sherman and Jane Harman of California, Stephen F. Lynch of Massachusetts and Emanuel Cleaver of Missouri. Reps. Mike Doyle and Jason Altmire , both of Pennsylvania, were identified as cosponsors of one earmark.

All but one of those earmarks is in the section of the bill written by the Energy and Water Appropriations Subcommittee, which is headed by [Rep. Pete] Visclosky.

Several of those members, including Doyle, Ryan, Larsen, Altmire, and Sherman, are among the top recipients of PMA's campaign cash.

Since reports of the FBI raid on PMA, attention has largely focused on Visclosky and on Rep. John Murtha, both of whom have received large amount of money from the firm and sponsored numerous earmarks on behalf of its clients. PMA was founded by a former top Murtha aide, and a former chief of staff to Visclosky lobbied is a PMA lobbyist.

Because Flake's resolution qualifies as "privileged", lawmakers may have to vote on it as early as today.

Flake's office released a compilation of eight earmarks worth $7.7 million in the bill. Taxpayers for Common Sense, a watchdog group, sent out the same list and identified the individual sponsors of the earmarks as Reps. Peter J. Visclosky of Indiana, Tim Ryan of Ohio, John B. Larson of Connecticut, Brad Sherman and Jane Harman of California, Stephen F. Lynch of Massachusetts and Emanuel Cleaver of Missouri. Reps. Mike Doyle and Jason Altmire , both of Pennsylvania, were identified as cosponsors of one earmark.

All but one of those earmarks is in the section of the bill written by the Energy and Water Appropriations Subcommittee, which is headed by Visclosky.

Allen Stanford

Bill That Might Have Helped Catch Stanford Died In Senate Finance Committee

Zachary Roth | February 24, 2009, 1:58PM

It's clear by this point that Allen Stanford put a lot of energy into wooing members of Congress. He was a prodigious political giver over the last decade, and even seems to have paid for some lucky lawmakers to soak up the sun in Antigua.

But few people, we're guessing, would choose to hang out with John Sweeney, Katherine Harris and co. just for fun. So what did Stanford want in return?

Over at TPMDC, Elana provided part of the answer in two posts that explain how Stanford's firm helped fight an effort to crack down on international money laundering during the late Clinton years, as well as how, shortly after, he met with Martin Frost, at the time the chair of the House Democratic caucus (and to whose political groups Stanford was contributing soft money), in a bid to convince Frost to oppose anti-money laundering initiatives.

But that was hardly the last congressional effort to deal with the problems of offshore business operations. In February 2007, Sen. Carl Levin, joined by then-senators Norm Coleman and Barack Obama, introduced the Stop Tax Haven Abuse Act, which would have closed offshore tax loopholes and forced companies to disclose far more information about their operations.

The bill listed 34 jurisdictions as probable locations for U.S. tax evasion -- one of which was Antigua and Barbuda, the Caribbean island nation where Stanford's sprawling financial empire was headquartered.

Although the measure was not primarily intended to root out large-scale frauds like the one Stanford is now accused of orchestrating, it likely would nonetheless have done so, as a "nice side benefit", according to Robert McIntyre of Citizens for Tax Justice, simply because it would have given US authorities access to far more information about offshore businesses.

What happened to the bill? Levin's office told us it came under the jurisdiction of the Senate Finance committee, which appears never to have brought it to a vote.

Since 2000, Finance chair Max Baucus has received $1000 from Stanford's firm, according to the Center for Responsive Politics. And Chuck Schumer has taken $17,000, more than all but sitting five members of Congress*.

During 2007, Stanford paid $500,000 to Ben Barnes' firm to lobby the Senate on a range of issues, including "lobbying issues related to banking" according to Senate lobbying disclosure records.

It's worth clarifying: Stanford is hardly the only businessman who'd potentially have had a lot to lose from efforts to crack down on offshore tax loopholes. Numerous Fortune 500 companies have offshore operations that could help them avoid paying US taxes, a recent GAO report found. And "fair tax" advocates tell TPMmuckraker that a broad range range of corporate interests has, over the last decade, been involved in preserving such loopholes. So even if Stanford's influence with lawmakers was a factor here, it's not as if he would have been working alone.

A spokesman for the Senate Finance committee pledged to provide TPMmuckraker with more information about the circumstances under which Levin's bill died. We'll update with anything else we learn.

* This sentence has been edited from an earlier version which referred to the contributions from Stanford received by Bill Nelson, a current finance committee member. Nelson did not join the committee until January of this year -- after the period in question.

Joe Biden

Report: Biden's Relatives Ran Fund Marketed By Stanford

Zachary Roth | February 24, 2009, 10:05AM

A fund of hedge funds run by Vice President Biden's son and brother -- Hunter Biden and James Biden -- was marketed exclusively by Allen Stanford's companies, reports the Wall Street Journal.

From the paper:

The $50 million fund was jointly branded between the Bidens' Paradigm Global Advisors LLC and a Stanford Financial Group entity and was known as the Paradigm Stanford Capital Management Core Alternative Fund. Stanford-related companies marketed the fund to investors and also invested about $2.7 million of their own money in the fund, according to a lawyer for Paradigm. Paradigm Global Advisors is owned through a holding company by the vice president's son, Hunter, and Joe Biden's brother, James.

The fund has offered to turn over the $2.7 million investment it received from Mr. Stanford's firm in 2007 to a court-appointed receiver in the SEC's civil fraud case involving Mr. Stanford, according to Paradigm's attorney, Marc X. LoPresti. The fund terminated its relationship with Mr. Stanford's companies after the SEC filed civil charges against them last week, Mr. LoPresti said.

Paradigm's lawyer told the Journal that the Bidens never met or communicated with Mr. Stanford. "There is no connection between the Bidens and Allen Stanford or Stanford period, full stop," he said. "There never was any meeting between any member of the Biden family, no phone calls, zero correspondence."

Stanford was charged last week by the SEC with orchestrating an $8 billion investment scam. He has cultivated ties to a slew of Washington lawmakers.

A Paradigm marketer, Jeffrey Schneider, told the Journal he brought in the Stanford business.

According to Paradigm's lawyer, companies owned by Stanford put up $2.7 million in seed money and marketed the fund. SEC records show the fund, launched in June 2007, had 104 investors with assets of $49.8 million, as of November 2008.

It's hard to know what to make of this for now. But there seems to be more information yet to come out about the fee structure of the arrangement.

The paper reports:

Under an agreement, Stanford was entitled to share in a portion of the fund's management and performance fees, Mr. LoPresti [Paradigm's lawyer] said. "That's all I'm going to say on the fee side of things," he said.

Just what the White House needs.

The Daily Muck

The Daily Muck

Chris Black | February 24, 2009, 9:54AM

A federal judge facing sexual abuse charges struck a plea deal Monday allowing him to get off on much lighter terms. By pleading guilty to obstruction of justice and retiring from the federal bench, Judge Samuel Kent will not have to face a trial for five other charges relating to sexually inappropriate behavior with employees, although the plea deal did require the judge to admit that his advances were neither invited nor enjoyed. The obstruction of justice charge carries a 20 year maximum sentence. Kent would have been the first district judge to be tried on federal sexual harassment charges. (New York Times)

A few former associates of President Obama have raised eyebrows with their recent moves to lobbying firms. Matthew Nugen, the political director for Obama's campaign, will take a job with Ogilvy Government Relations as a strategic adviser; Jeff Berman, the director of Obama's national delegate operation, will join D.C. lobbying firm Bryan Cave; and Tom Daschle, Obama's pick for HHS Secretary has returned to lobbying powerhouse Alston & Bird. Obama has announced rules banning lobbyists from serving in his administration -- though these have been waived in several cases. (Politico)

A report published by the Pentagon yesterday urges U.S. authorities to speed the transfer of 17 Uighur detainees from the Guantanamo Bay facility. Admiral Patrick Walsh, who oversaw the review, said that other detainees are aware that the Uighurs are to be freed, and that it "breeds a climate... of friction." The U.S. has been trying for years to transfer the men to a third country; if this fails they may be settled in the United States. (Agence France Presse)

Read more »

John Thain

Thain Must Dish On Bonuses, Rules Court

Zachary Roth | February 23, 2009, 6:34PM

That was quick!

John Thain has been ordered by a New York court to testify about those controversial Merrill Lynch bonuses, reports CNBC.

Earlier today, it was reported that New York Attorney General Andrew Cuomo, who is investigating the bonuses, filed a motion to compel Thain to testify, after the disgraced former Merrill CEO refused to answer questions about the issue, claiming that Bank of America had ordered him to stay mum.

Cuomo had subpoenaed Thain for testimony. He has also subpoenaed B of A CEO Ken Lewis, and another B of A exec, but does not appear to have taken their testimony yet.

Cuomo's probe is seeking to determine what Bank of America knew, and when, about Merrill's decision to award the bonuses, and about the massive losses that Merrill absorbed in the fourth quarter of last year, before it was formally taken over by B of A, but after the takeover had been announced.

Barack Obama

Obama Admin Backs Bushies On Missing Emails

Zachary Roth | February 23, 2009, 5:27PM

Change we can believe in? Maybe not so much.

The Obama administration is siding with the Bush administration in trying to kill a lawsuit brought by watchdog groups that seeks to gain access to Bush White House emails, reports the Associated Press.

At issue are emails from key periods of the Bush years, including the run-up to the invasion of Iraq, and the investigation into the Valerie Plame leak.

In response to the suit brought by two groups, CREW and the National Security Archive, the Bush White House recently said that it had found 14 million of the e-mails and had taken steps to archive others. But the plaintiffs called those steps inadequate.

Now the Obama Justice Department is seeking to have the suit dismissed, just as the Bush DOJ did.

"The new administration seems no more eager than the last" to deal with the issue, Anne Weismann of Citizens for Responsibility and Ethics in Washington, told the Associated Press.

The AP adds:

Tom Blanton, director of the National Security Archive, noted that President Barack Obama on his first full day in office called for greater transparency in government.

The Justice Department "apparently never got the message" from Obama, Blanton said.

Sounds about right.

George Bush

Quelle Surprise: Rove A No-Show, Again, For US Attorneys Testimony

Zachary Roth | February 23, 2009, 1:47PM

So today was the day that Karl Rove was supposed to appear before the House Judiciary committee to testify about the US Attorney firings. And of course, Rove didn't show.

That wasn't a surprise. After getting the deadline pushed back, Rove had already publicly indicated he didn't plan on being there, citing President Bush's claim of executive privilege. Rove's lawyer had then asked for a second postponement, a request that Judiciary chair John Conyers had declined to grant.

It's a bit unclear where things go now. The next key date is March 4th -- the new deadline for the Obama administration to weigh in on the Harriet Miers and Josh Bolten case, in which President Bush also asserted executive privilege. The new administration's stance on that case could well also determine how a judge would rule on the Rove case, should the issue go to court.

And given Rove's continuing failure to cooperate, it looks like that's where we're heading.

Bank of America

Cuomo: B of A "Obstructing And Interfering" With Merrill Bonus Probe; Thain Staying Mum

Zachary Roth | February 23, 2009, 12:59PM

John Thain is staying mum about the billion-dollar bonuses he approved just weeks before Merrill Lynch came under the control of Bank of America.

New York Attorney General Andrew Cuomo, who is investigating the controversial Merrill bonuses, has filed a motion in court, seeking to compel Thain to talk about the subject, reports Reuters. Cuomo's office says that during his sit-down with investigators last week, Thain refused to do so, claiming that Bank of America has told him to keep quiet.

Cuomo's office is alleging that B of A is "obstructing and interfering" with his investigation.

That probe is seeking to determine what Bank of America knew, and when, about Merrill's decision to award the bonuses, and about the massive losses that Merrill absorbed in the fourth quarter of last year, before it was formally taken over by B of A, but after the takeover had been announced.

B of A CEO Ken Lewis was subpoenaed last week, and another company exec was subpoenaed, along with Thain, before that.

Late Update: A spokesman for Thain told the Associated Press that Thain "would answer questions about individual bonuses if compelled by the court order."

Allen Stanford

For Stanford, A Long Trail Of Run-Ins With Authorities

Zachary Roth | February 23, 2009, 12:13PM

Relatively few Americans had heard of Allen Stanford until the last week or so. But it turns out that, over the last decade, the Texas billionaire had attracted the scrutiny of a range of government authorities, and been the subject of several civil suits -- so much so that it's hard to believe it took until last week for him to be formally charged.

Let's recap what we know about the various inquiries, investigations, and lawsuits focused on Stanford's sprawling financial empire over the last decade:

Circa 1998

- Stanford writes in a letter to the US ambassador to Antigua that he has been investigated by numerous agencies over the years, and none had found evidence of wrongdoing.

1999

- After Stanford finds that a former Mexican drug lord had used his bank to hide or launder money, he voluntarily makes out a cashier's check worth $3.1 million, and gives it to the Drug Enforcement Agency.

- The Treasury Department places Antigua -- where Stanford's business is based, and with whose government he is cozy -- on its money-laundering watch list.

Circa 1999

- Texas securities regulators find evidence of potential money laundering involving Stanford. They refer it to the FBI and the SEC, because it involves offshore banks. Texas securities commissioner Denise Voigt Crawford later tells the state legislative committee: "Why it took 10 years for the feds to move on it, I cannot answer." She added: "We worked with the FBI and the SEC and basically gave them the case. We told them what we'd seen and they were going to run with it."

2005

- A lawsuit filed in Florida accuses Stanford of aiding a Ponzi scheme.

2006

- The SEC's Fort Worth office opens an investigation into Stanford's business, but is asked by another agency to "stand down," and complies. (Rep. Dennis Kucinich, who chairs the House Domestic Policy subcommittee, asked late last week that the agency turn over documents related to that sequence of events.)

2006

- A second Florida lawsuit, this one filed by a former employee, accused Stanford of being involved in a Ponzi scheme.

2007

- Two former employees sue Stanford, alleging fraud.

- The SEC finds, during a routine exam, that Stanford's Houston-based broker-dealer operation is violating net capital requirements. The firm pays a $20,000 fine.

- Stanford Financial pays a $10,000 fine to FINRA in response to allegations that it gave out "misleading, unfair and unbalanced information" about its certificates of deposit.

2008

- Stanford Financial pays a $30,000 fine to FINRA in response to allegations that it didn't adequately disclose in its research reports its method for valuing certain securities, among other information.

- FBI opens an investigation into whether Stanford laundered drug money for Mexico's violent Gulf Cartel. Mexican authorities detained one of Stanford's private planes after officials found checks inside believed to be connected to the cartel. (The DEA also at some point probed Stanford for laundering drug money.)

- That inquiry into Stanford by the SEC's Fort Worth office is reopened, in the wake of widespread criticism of the agency for failing to catch Bernard Madoff's alleged $50 billion Ponzi scheme, and for de-emphasizing enforcement in recent years.

2009

- SEC files charges against Stanford, alleging "massive ongoing fraud."

As we reported last week, there's strong reason to believe that the SEC should have pushed harder on Stanford sooner. The long history of inquiries that failed to uncover Stanford's alleged $8 billion fraud only strengthens that notion.

The Daily Muck

The Daily Muck

Chris Black | February 23, 2009, 10:02AM

Mortgage giant Freddie Mac has begun an investigation into its own lobbying activities. The firm spent $2 million dollars to fight regulations that would have required Fannie Mae and Freddie Mac to sell hundreds of billions of dollars worth of mortgage-backed securities held in their portfolios. The same securities plunged in value when the housing market tanked. High-priced lawyers from Covington & Burling will lead the probe. (Associated Press)

Attorney General Eric Holder embarked today on a trip to review the Guantanamo Bay detention facility. The trip comes in the wake of Obama's announcement that he intends to close the facility within a year. News reporters were not allowed to accompany Holder on his flight to Cuba, and it is unclear if any part of the visit will be open to press coverage. (Associated Press)

A Pentagon review of Guantanamo Bay has concluded that treatment of detainees at the facility meets the standards set by the Geneva Conventions. The review came as part of the process of closing the facility, something mandated by President Obama. The report is likely to irk defense lawyers, who for years have insisted that treatment at the camps has lead to mental health problems for some detainees. (Washington Post)

Read more »

Ann Copland

Cochran Aide Charged In Abramoff Probe

Zachary Roth | February 23, 2009, 9:23AM

The next domino is set to fall in the Jack Abramoff saga.

Ann Copland, a former longtime aide to Sen. Thad Cochrain (R-MS), was charged late last week with accepting gifts from, and doing favors for, the corrupt lobbyist and his cronies.

Reports the Associated Press:

Court documents filed Thursday say Ann Copland took thousands of dollars worth of event tickets and meals out in Washington from Abramoff and associates at his firm. Prosecutors say the gifts were in exchange for her favors benefiting one of their top clients, the Mississippi Band of Choctaw Indians.

For weeks, there had been speculation that this move might be coming. When Team Abramoff member Todd Boulanger was charged last month, court documents referred to a Cochran staffer as having accepted gifts from Boulanger, in exchange for doing legislative favors for the Choctaw. The Associated Press quickly identified the staffer as Copland.

Then when Boulanger pleaded guilty shortly after, court documents revealed email exchanges between him and Copland, in which she complained that there were no "Hebrew National hotdogs" in the corporate suite at a Baltimore Orioles game that Abramoff's firm had provided her, and declared she was "freaking out" because no food was provided for her party at a Washington ice skating event.

Boulanger once wrote to Abramoff of Copland:

She's more valuable to us than a rank and file house member.

Copland abruptly left Cochran's office last year as Abramoff prosecutors gained more convictions of Hill aides. She had worked there 29 years.

So: Could the wide-ranging probe now have Cochran in its sights? We may be about to find out...