Bernard Madoff

Madoff Worth Over $823 Million

Zachary Roth | March 13, 2009, 5:34PM

We knew Bernie Madoff was living large. But maybe not this large.

The Associated Press reports:

Newly filed court documents show Bernard Madoff and his wife had a net worth of more than $823 million at the end of last year.

The document detailing the Madoffs' assets was contained in papers his lawyers filed Friday in an effort to get him freed on bail.

The document shows the Madoffs owned four real estate properties worth $22 million and had $17 million in cash and a $7 million yacht, among other assets.

Maxine Waters

Letters Bolster Waters' Claim On Bank Conflict

Zachary Roth | March 13, 2009, 5:08PM

Rep. Maxine Waters is stepping up her campaign to show she took no inappropriate action on behalf of OneUnited bank.

Waters' office has released to TPM two letters sent by the National Bankers Association (NBA), a trade group for minority-owned banks, to the Treasury Department, in reference to a September 2008 meeting Waters had helped set up between NBA and Treasury. The letters appear to back Waters' contention that the meeting, at which OneUnited's CEO reportedly asked explicitly for bailout money, was not set up exclusively to help OneUnited, but rather on behalf of minority-ownded banks more broadly.

That doesn't contradict anything the New York Times reported, it's worth noting. But it does appear to bolster Waters' claim, made in a statement she put out earlier today, that she wasn't looking out for OneUnited's interests above those of other minority-owned banks. Waters has long been an advocate in Congress for minority-owned banks.

Waters also released a 2007 document showing that she disclosed her ties to OneUnited -- her husband had previously served on the board, and owned stock -- before questioning witnesses at a House hearing on minority-owned banks.

It seems clear that Waters should have disclosed those ties again when she set up the 200 meeting. But it also appears that that meeting, which Waters has said she didn't attend, was arranged on behalf of minority banks broadly, not as a way to benefit OneUnited.

Given the general level of greed and hypocrisy we've seen in regard to the bailout, this looks at this point like a minor misstep.

Barack Obama

Justice Withdraws 'Enemy Combatant' Definition For Gitmo Detainees

Zachary Roth | March 13, 2009, 4:14PM

In a move that represents both a formality and a historic gesture, the Obama administration has announced that it's withdrawing the designation of "enemy combatant" for Guantanamo detainees. The Bush administration had drawn widespread criticism for its use of that designation, which allowed it to deny detainees rights they otherwise would have been entitled to.

In a press release, the Justice Department said it was submitting a new standard to hold detainees at Gitmo. Rather than relying on the president's authority as commander-in-chief, the department explained, the new standard "draws on the international laws of war to inform the statutory authority conferred by Congress."

It also said that the governent is conducting a review of detainee detention policy which could lead to "further refinements."

President Obama has already announced this intention to close Gitmo within the year. In a sense, today's announcement is an equally important step in winding down the "War On Terror" concept that the Bush administration announced, and shifting to an approach that sees the fight against terrorism as an effort to be conducted within the bounds of international and domestic law.

In other words: change we can believe in.

Maxine Waters

Waters: I Didn't Take Improper Action For Bank

Zachary Roth | March 13, 2009, 2:15PM

Yesterday we noted a report by the New York Times about Rep. Maxine Waters' ties to OneUnited, a bank that got bailout money after Waters set up a meeting between Treasury Department officials and the heads of minority-owned banks, including OneUnited's CEO.

Now Waters is pushing back.

In a statement on her website, Waters asserts that the stories "revealed one thing: I am indeed an advocate for minority banks. Despite my public and consistent advocacy, news reports suggest that somehow I have acted improperly."

The full statement follows after the jump...

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Barack Obama

Is Obama Info Officer Implicated In FBI's Probe Of DC Tech Office?

Zachary Roth | March 13, 2009, 12:18PM

So this is weird.

Yesterday, federal agents raided the workplace of the chief technology officer for the city of Washington DC. The same day, they arrested Yusuf Acar, who serves as the city's information systems security officer, as part of a federal bribery sting.

The man who until recently was CTO, Vivek Kundra, was just named the first ever Federal Chief Information Officer by the Obama administration -- which put this story on the national radar.

It's unclear whether Kundra himself is implicated at all. CNN today reports:

A law enforcement source with knowledge of the investigation told CNN that Kundra is not involved in the case.

But it also reveals that, according to the White House, Kundra has taken a leave of absence from his new gig, until more details are known about the FBI probe.

So for the moment, there are more questions than answers -- but this bears watching.

Bank of America

B of A: We Care About Privacy (When It Comes To Bonuses, That Is)

Zachary Roth | March 13, 2009, 11:47AM

The judge who will decide whether information about those Merrill Lynch bonuses should be made public has said he'll make a decision within the week, Bloomberg reports.

New York Attorney General Andrew Cuomo is investigating the bonus awards, which reportedly total $3-4 billion. Bank of America, which now owns Merrill Lynch, has refused to disclose to Cuomo which Merrill employees received the awards, and how much each got.

But we particularly liked this argument from B of A's lawyer, Evan Davis, made to Judge Bernard Fried:

Americans care about their privacy. That matters to us because if we don't try to protect it and succeed in protecting it we'll lose them to foreign banks.

Aah yes, Bank of America: famed protector of privacy. When the subject is executive bonuses, that may be true. When its customers' personal information, maybe not so much.

Bernard Madoff

Madoff's Confession Points Up SEC Failure

Zachary Roth | March 13, 2009, 11:26AM

It's fair to say that the incompetence and fecklessness of the SEC in failing to catch Bernie Madoff's $50 billion Ponzi scheme (merely "alleged" no more!) has already been pretty well established -- by this guy, among others.

But if anything, Madoff's courtroom confession delivered yesterday only makes the extent of the SEC's screwup even more startlingly clear.

Here's what Madoff said:

To conceal my fraud, I misrepresented to clients, employees and others, that I purchased securities for clients in overseas markets. Indeed, when the United States Securities and Exchange Commission asked me to testify as part of an investigation they were conducting about my investment advisory business, I knowingly gave false testimony under oath to the staff of the SEC on May 19, 2006 that I executed trades of common stock on behalf of my investment advisory clients and that I purchased and sold the equities that were part of my investment strategy in European markets. In that session with the SEC, which took place here in Manhattan, New York, I also knowingly gave false testimony under oath that I had executed options contracts on behalf of my investment advisory clients and that my firm had custody of the assets managed on behalf of my investment advisory clients.

And here's how the SEC -- in a memo that recommended closing that inquiry, having found only minor violations -- what appears to be that same piece of testimony:

[I]n the course of a preliminary inquiry into [Markopolos' allegations that Madoff's hedge fund profits were the result of fraud], the staff learned that during a recent examination of BLM by NERO's broker-dealer examination staff, Bernard Madoff, the sole owner of BLM, did not fully disclose to the examination staff either the nature of the trading conducted in the hedge fund accounts or the number of such accounts at BLM.

But of course, it wasn't that he didn't fully disclose the trading information. It's that he wasn't even making any trades, and had directed his staff to create false tickets to fool investors. Presumably, that deception could have been detected had the SEC simply bothered to try to match up those trade with the supposed counter-parties -- who didn't exist.

The SEC had another chance to catch that scheme when Madoff filed reports with the agency that year. Madoff said yesterday:

Another way that I concealed my fraud was through the filing of false and misleading certified audit reports and financial statements with the SEC. I knew that these audit reports and financial statements were false and that they would also be sent to clients. These reports, which were prepared here in the Southern District of New York, among things, falsely reflected my firm's liabilities as a result of my intentional failure to purchase securities on behalf of my advisory clients.

"Were there sufficient red flags for SEC to have caught this?" asked Ross Albert, a former SEC senior special counsel, asked in an interview with TPMmuckraker last December. "Absolutely, without a doubt."

Since then, that conclusion has become only more indisputable. And the case for those additional SEC funds has grown only stronger.

The Daily Muck

The Daily Muck

Ben Buchwalter | March 13, 2009, 9:14AM

Sir Allen Stanford's alleged $8 billion Ponzi scheme doesn't only affect his American investors. In the Antiguan election this week, voters chose between the ruling party and the opposition, which welcomed the Texas financier to Antigua twenty years ago. The economy is the central issue in the election, as Antigua's Stanford International Bank was shut down by Caribbean regulators due to the Stanford fallout.* Prime Minister Baldwin Spencer says his opponent, Lester Bird, tried to "literally give away Antigua and Barbuda to Allen Stanford." In 2006, Byrd used his power as a former Prime Minister to nominate Stanford for a knighthood.* Election results are expected today. (Associated Press)

Sam Zell, the chairman and CEO of the newspaper conglomerate Tribune Co. hired a high-profile lawyer to represent him in an interview with the U.S. Attorney's office about possible connections to former governor Rod Blagojevich, the company said Wednesday. Zell's lawyer, Anton Valukas, specializes in white collar crime and has represented law firm Jenner & Block in a number of major cases. Among other charges, federal prosecutors have accused Blagojevich and his chief of staff John Harris of threatening to withhold public support from the sale of Wrigley Field, which is owned by Tribune Co., if the company did not fire members of the Chicago Tribune editorial board. (Chicago Tribune)

A report released by the Government Accountability Office today says Medicare home services spending increased 44 percent over five years due partially to fraud and abuse. Medicare home care services include visits by nurses and physical therapists for Medicare patients. Some lawmakers say that lax oversight enabled providers to take advantage of the system to bill for services they did not provide. Chuck Grassley, the top Republican on the Senate Finance Committee, harshly criticized Medicare oversight as it currently stands. "There's no excuse for Medicare officials neglecting payment problems," the Iowa senator told USA Today. The GAO report recommends implementing criminal background checks on home services providers to reduce cases of fraud. (USA Today)

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Maxine Waters

Report: Waters Set Up Treasury Meeting For Bank She Had Ties To

Zachary Roth | March 12, 2009, 5:56PM

This doesn't look good....

The New York Times reports that last September, Rep. Maxine Waters (D-CA) set up a meeting with Treasury Department bank regulators for several minority-owned banks, including OneUnited, one of the nation's largest black-owned banks. At the meeting, OneUnited's CEO, Kevin Cohee, bluntly asked the officials for $50 million in bailout money.

But what Waters didn't disclose was that her husband, Stanley Williams, had served on the bank's board of directors until early 2008, and has owned at least $250,000 in stock in the bank. Treasury learned that fact only later.

One official told the Times:

"It angers me. You got to know you have to be careful when you are dealing with people who you have personal relations with.

In the end, OneUnited didn't get that $50 million, but it did get $12 million in TARP funds, becoming the first minority owned bank to cash in through the program.

This is hardly the first allegation against OneUnited. Adds the Times:

[I]t had been harshly criticized by regulators in 2007 for failing to give a sufficient number of loans to lower income residents in Miami, while favoring wealthier customers there.

And:

[T]he F.D.I.C. sanctioned the institution in October 2008 for "unsafe or unsound banking practices," including excessive compensation for Mr. Cohee. The bank had provided him with a 2008 Porsche SUV and maintained his $6.4 million beachfront compound in Santa Monica. Calif., with views of the Pacific and a spa and pool.

For his part, Cohee suggested to the Times that race is at the heart of the issue. "This is where the race issue comes in," he said.

The Wall Street Journal detailed some of the ties between Waters, who sits on the House Financial Services committee, and OneUnited, in a report (sub. req.) published earlier today.

Alaska

Another Guilty Plea In Alaska Corruption Probe

Zachary Roth | March 12, 2009, 5:38PM

Oe of our favorite wide-ranging probes, the one into corruption in Alaska state government, grinds relentlessly on.

The Justice Department just announced that Beverly Masek, a former member of the state House of Representatives, pleaded guilty today to conspiracy to commit bribery, in connection with cash payments she received from oil-services contractor Bil Allen, in exchange for using her position to take actions that benefited Allen's company.

Masek faces a maximum of five years in prison, and is due to be sentenced in May.

The wide-ranging probe, of course, has already netted Ted Stevens -- the Republican former U.S. senator, who was convicted last fall of making false statement on his Senate disclosure forms in connection to gifts he received from Allen. -- as well as several Alaska state lawmakers in addition to Masek.

Bernard Madoff

Madoff's Statement

Zachary Roth | March 12, 2009, 4:14PM

Here's the full text of Bernad Madoff's statement made in court this morning, in which he admitted his crimes and described them in detail.

Madoff pleaded guilty to all 11 counts on which he was charged, in connection to a multi-billion dollar financial fraud.

Michael Steele

RFPs Past And Present: Compare and Contrast

Zachary Roth | March 12, 2009, 2:36PM

Earlier this week, we had some fun with the Republican National Committee's recent Request-For-Proposal for a redesign of its website. The two-page RFP was so sketchy and vague that it generated blogospheric ridicule -- and even prompted one prominent conservative blogger to suggest that it might mean that embattled chair Michael Steele had already given a favored designer the inside track for the project.

The committee later sent out a second try, which was a bit more detailed. But if you want to see what a real RFP for a project like this looks like, Tech President has dug one up from 2002, that the RNC, then under different leadership, sent out for an earlier web redesign.

As Tech President notes:

The document makes for an interesting contrast to the RFPs the RNC is currently circulating, with the 14-page document detailing everything from the audiences the site should target ("party loyalists," "persuadable voters") to how the backend database should be designed to how user accounts should function.

You can check it out over at Tech President...

Bailout

Congress Probing Merrill For Obstructing Bonus Investigation

Zachary Roth | March 12, 2009, 1:44PM

The House Oversight Committee has launched an investigation into whether Merrill Lynch misled it when the firm told the committee, in a letter sent last November, that no decisions had been made on bonuses.

As we noted earlier today, New York Attorney General Andrew Cuomo, who is probing the bonuses, included the letter, dated November 24, in court filings made yesterday. Cuomo also included testimony from a Merrill director, saying that the firm decided November 11th to award bonuses that December. Cuomo, who is trying to persuade a judge to compel Bank of America to disclose information on the bonuses, suggested that the testimony implies Merrill's letter was designed to mislead the committee, which was conducting its own invesitgation of the bonuses, and was chaired at the time by Rep. Henry Waxman (D-CA).

Congress rarely takes kindly to being misled, and this appears to be no exception. The committee's current chair, Rep. Ed Towns (D-NY), today issued a statement asserting that the Cuomo filings "raise the disturbing possibility that Merrill Lynch executives may have obstructed this Committee's investigation," and adding that Towns had directed committee lawyers to begin a "detailed investigation of this allegation."

Lying to a Congressional investigation, even in a letter, could potentially lead to perjury charges. There's an important difference between misleading and lying, however, and neither Cuomo nor Towns have accused Merrill of the latter.

Still, things are getting interesting...

The full statement from Towns follows after the jump ...

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Barack Obama

UPDATED: Office Of Former Washington DC CTO, Now Obama Staffer, Raided By FBI

Zachary Roth | March 12, 2009, 11:35AM

The office of Washington DC's chief technology officer has been raided by FBI agents, reports the Politico.

But this isn't just a local story. Vivek Kundra, who served in the position until February 4, was last week appointed the first ever Federal Chief Information Officer by the Obama administration.

An FBI spokeswoman told Politico that the search was part of an "ongoing investigation." And a separate source told the site that the FBI had sent all staffers at the office, aside from senior executives, home for the day.

The White House declined to comment to Politico.

We'll keep you posted on this.

Late Update: It looks like Kundra may not be the focus of the probe after all. The Washington Post reports that an employee in the office, Yusuf Acar, who serves as the information systems security officer for the city, has been arrested as part of a federal bribery sting.

A spokesman for the US Attorneys office said the case is "is under seal."

Andrew Cuomo

Cuomo: Merrill Misled Congress On Bonuses

Zachary Roth | March 12, 2009, 11:18AM

It looks like Andrew Cuomo has escalated things in the Merrill Lynch bonus probe.

Cuomo is now accusing the firm of misleading Congress on the matter. In a court filing made yesterday, according to the Wall Street Journal, Cuomo included a November 24th letter, sent by Merrill to a House oversight committee, assuring lawmakers that no decisions on yearly bonuses had yet been made. Cuomo also filed testimony from a Merrill director, saying that on November 11th, the firm's compensation committee had decided that Merrill would pay bonuses in December, rather than January, when bonuses were usually paid (and when the firm would be under the control of Bank of America.)

Cuomo is trying to convince a judge to force Bank of America to disclose information about who got the bonuses -- which the company has so far been refusing to do.

The House Oversight committee, chaired at the time by Rep. Henry Waxman (D-CA), had asked Merrill for information on the bonuses, as part of an effort to ensure that the firm wasn't using bailout money for compensation.

There's another interesting nugget in the Journal's report:

Mr. Cuomo also disclosed that John Thain, Merrill's chairman and chief executive, was told that he would lose any chance of succeeding Kenneth Lewis as CEO of Bank of America if Mr. Thain kept pressing Merrill directors last fall for a 2008 bonus of as much as $40 million.

"He was told very strongly that you should not do that; that you would damage yourself with the Bank of America board if you do that, and if you ever wanted a chance to be in the running for my job, then that would eliminate it," Mr. Lewis said in his testimony last month, according to the filing.

Thain soon lost his chance to succeed Lewis anyway, as he was ousted in mid January amid anger over the bonuses and Merrill's massive fourth quarter losses.

Bernard Madoff

Madoff: "I Am Deeply Sorry And Ashamed"

Zachary Roth | March 12, 2009, 10:53AM

The moment that many of Bernard Madoff's victims have been waiting for has arrived: He has publicly described his crimes.

At the court proceeding this morning at which he pleaded guilty, Madoff declared: "I cannot adequately express how sorry I am for what I have done."

CNBC describes the scene:

As the proceeding began, Madoff asked if he could have some water.

Judge Denny Chin swore Madoff in and asked him for his plea. After Madoff said he was pleading guilty, Chin explained that he would ask a series of questions before deciding whether to accept the plea.

"Mr. Madoff, you can be seated; pour yourself some water," Chin told him.

Chin went on to ask Madoff, "Do you understand parole has been abolished?" Madoff said, "Yes." Chin is due to sentence Madoff at a later date.

In his plea, Madoff made these statements:

"Your honor for many years ... I operated a ponzi scheme."

"I am grateful for this opportunity to speak" and explain that "I am deeply sorry and ashamed."

"I cannot adequately express how sorry I am for what I have done."

Madoff went on to say, "The victims of my schemes included individuals, charities, pension funds and hedge funds."

Madoff made a distinction between his investment business which was the fraud and the other businesses which he said were legit. "The other businesses were legitimate, profitable ...in all respects and those businesses were run by my brother and my sons," said Madoff.

The Daily Muck

The Daily Muck

Ben Buchwalter | March 12, 2009, 9:16AM

Investigating whether Arizona policemen discriminate against Latinos while enforcing immigration laws, the House Judiciary Committee will call Arizona Sheriff Joe Arpaio to testify. Arpaio has become a hero of the anti-immigration movement for leading for a three-year crackdown on illegals in Arizona, which has included controversial tactics like occasional crime sweeps in mostly Hispanic neighborhoods. Arpaio claims that the hearings, chaired by Rep. John Conyers (D-MI) are politically motivated. "They want to keep putting the pressure on me, hoping that I go away," he said. "And that is not going to happen." (Arizona Republic)

Speaking before a House appropriations subcommittee Wednesday, SEC head Mary Schapiro warned that the SEC might be forced to make significant operations cuts if Congress didn't increase its funding The SEC was embarrassed this year by multiple failures to prevent several major alleged frauds. "I do not believe it would be wise for the SEC to retrench during such perilous times in our markets," she said. Schapiro asked the committee to make available $17 million from previous budgets that went unspent. (Washington Post)

Howard Richman, a former executive at the medical pharmaceutical company Biopure, pleaded guilty Wednesday to pretending to have cancer to dodge investigations into an alleged fraud. He even admitted to impersonating a doctor in a call to investigators to dodge the trial. Richman faked the illness to avoid an SEC investigation into whether Biopure executives lied to investors about the status of a blood substitute called Hemopure. After clinical trials, the FDA rejected the drug due to safety concerns, but Biopure told investors that the deal had been approved.(Associated Press)

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Bernard Madoff

Madoff Pleading Guilty This Morning, But Not Playing Ball On Conspiracy

Zachary Roth | March 12, 2009, 9:13AM

The Bernard Madoff probe could be expanding, as we told you yesterday. But it doesn't look like prosecutors are getting any help from the man himself.

Bloomberg reports that Madoff, who will plead guilty in a Manhattan federal courthouse today, has not agreed to a plea deal, because prosecutors were demanding he admit to a conspiracy, meaning admitting he worked with others.

Madoff, 70, will plead guilty to all 11 counts he faces, and could receive up to 150 years in jail.

Prosecutors have not at this point alleged a conspiracy, in which two or more people agree to commit an illegal act, nor have they charged anyone except Madoff. But according to Bloomberg's sources, they have said Madoff didn't act alone. And in court documents, they alleged he told employees to create false account documents and trade confirmations, and to create false financial statements to fool regulators.

The Daily Beast reported Tuesday evening that the investigation had widened to include co-conspirators, but it remain unclear exactly what that means, or what evidence prosecutors have compiled.

Allen Stanford

Stanford Exec: Court-Appointed Lawyers Went Through My Panty Drawer!

Zachary Roth | March 11, 2009, 6:16PM

No one likes lawyers rifling through their underwear drawer.

Laura Pendergest-Holt, the chief investment officer for Stanford Financial Group -- who has been charged along with Allen Stanford himself and number 2 Jim Davis -- is trying to get overturned a court order that put her assets under the control of a court-appointed receiver.

In an emergency motion, attorneys for Pendergest-Holt wrote that lawyers for the receiver, Ralph Janvey, conducted a raid of her Mississippi home March 2, seizing her family's car, diverting her mail, went through her underwear drawer, and mocked her husband -- telling him he wouldn't be living in the house for long.

The court filing called the move a "stunning act of bad faith", and asked for the assets to be returned form the control of the receiver. It argued that Pendergest-Holt had agreed to the seizure only before she knew that criminal charges would be filed against her. Now that they have been, the seizure violates her constitutional rights, according to the filing.

The filing says:

In effect, the Receiver's lawyers, in the context of the civil case, have conducted a free-wheeling warrantless search of Ms. Pendergest-Holt's home and have taken Ms. Pendergest-Holt's personal property without due process of law. Because the Receiver's lawyers are duty-bound to cooperate with the SEC, DOJ and FBI under the Receivership Order, the Government will no doubt be the primary beneficiary of the Receiver's unlawful search and seizure of Defendant's property.

Pendergest-Holt was charged by the SEC earlier this month with making misrepresentations to the FBI about, among among things, her knowledge of Stanford's portfolio.

Voting

Texas Republicans Pushing Voter Suppression Law

Zachary Roth | March 11, 2009, 5:08PM

We don't usually write about state-level legislative wrangling, but in this case, we think you'll agree that there's good reason.

Before the election, we wrote a lot about the Republican effort to make it harder for poor and minority voters to cast ballots. In several states, the GOP took advantage of restrictive voter ID laws, passed in recent years, to try to force election officials to purge voters from the rolls.

A well-organized campaign by voting rights groups and Democrats helped mitigate the damage. But that doesn't seem to have deterrred the GOP...

In fact, Texas Republicans have doubled down on the strategy, "pushing a bill to require voters to show a photo ID -- a requirement that, studies show, would hit poor and minority voters, who vote disproportionately Democratic, particularly hard. As usual, the stated rationale for the bill is to protect against voter fraud -- and as usual, Republicans have produced no actual evidence that such fraud is occurring.

Similar laws exist in Indiana and Florida, Republican election officials in both states sought to use those laws to make it harder to vote.

The bill passed the GOP-controlled Texas Senate today, on a party-line vote, reports the Dallas Morning News -- but not before some noteworthy developments during Senate hearings.

First, in an sign of how the movement for this bill ties in to broader GOP efforts to make voting harder, Republicans wheeled out arch voter suppression guru and TPMmuckraker fave Hans Von Spakovsky to testify about the dangers of voter fraud.

Then, the hearing, run by Republicans, ended up dragging on from Tuesday morning all the way until this morning. Some citizens who had been called by Democrats to testify did not get to speak until 6am this morning.

Reported the DMN:

One woman who waited all night sobbed during her testimony, saying she had no idea she would have to wait more than 20 hours to speak.

The bill is expected to face a much tougher time in the closely divided House. And Democrats have said they plan to challenge the bill's legality in court, under the Voting Rights Act.

Meanwhile, in Washington, the Senate Rules committee, chaired by Chuck Schumer, released an MIT study finding that up to 7 million voters were prevented or discouraged from casting votes in the November election, thanks largely to barriers to voter registration.

As Republicans understand, making voting harder can make a difference in a close election. And the terms of battle for 2010 and 2012 are already being drawn...

Allen Stanford

Stanford Takes The Fifth

Zachary Roth | March 11, 2009, 3:05PM

In better days, Allen Stanford was, by most accounts, a loqacious and charming figure, wooing clients, lawmakers, and foreign dignitaries alike with the sheer power of his personality.

Now, not so much.

In court documents filed today, Stanford took the fifth, declining to testify in the SEC's complaint against him, in which he is accused of orchestrating an $8 billion Ponzi scheme.

His former college roommate and Number 2 at Stanford Financial Group, Jim Davis, is likewise staying mum, it was reported last week.

Bernard Madoff

Is Madoff Probe Expanding?

Zachary Roth | March 11, 2009, 2:22PM

Bernard Madoff is set this week to plead guilty to orchestrating a massive Ponzi scheme. But could we be in line for more guilty pleas before this is all over?

The Daily Beast reports:

[T]he [Madoff] investigation ... has broadened to include a number of suspected co-conspirators, according to federal officials involved in the case.

The Daily Beast story -- written by Lucinda Franks, whose byline identifies her as a Pulitzer-Prize winning journalist who was formerly on the staff of the New York Times -- also reports that, according to sources, "several members of Madoff's inner circle transferred assets to their wives, transactions thought to be laundered through an English bank."

There are said to be three groups of possible co-conspirators, who could potentially be charged either criminally by the Justice Department, or civilly by the SEC.

In the first group are employees of Madoff's firm who concocted false trades and sent out phony statements to thousands of unsuspecting clients.

The second group is comprised of principals in feeder funds such as Cohmad Securities Corp. and Fairfield Greenwich Group, which funneled investor dollars to Madoff and received large fees for steering this business. If they were aware of Madoff's fraud, they could face criminal charges; if they were not, they could be hit with civil charges for a lack of due diligence.

The third group is the target of an investigation that's still in its early stages into money laundering through British banks, in which US and British authorities are cooperating. This group consists of solicitors, accountants, and others in London who may have assisted Madoff in transferring funds from client accounts to a Madoff entity that lists Ruth Madoff, brother Peter Madoff, and sons Mark and Andrew Madoff among its board members.

It's not clear from any of this that any specific members of Madoff's family, or his inner circle, are in immediate legal jeopardy.

But the Wall Street Journal appears to be thinking along similar lines (sub req). It notes:

Prosecutors alleged Tuesday that Mr. Madoff hired numerous employees with "little or no prior pertinent training or experience in the securities industry" and caused them to "communicate with clients and generate false and fraudulent documents."

Its report doesn't go as far as the Daily Beast's. The Journal says it's still unclear whether prosecutors believe these people knew they were involved in a fraudulent scheme, and doesn't explicitly say that the investigation has broadened beyond Madoff himself.

But it's noticeable that the paper does take the time to lay out what's known about the possible involvement in the scheme of five of Madoff's relatives and associates -- including his wife Ruth, who has hired her own lawyer, and his brother Peter, who was the chief compliance officer for Madoff's firm.

With Madoff's guilty plea soon to be safely in the bag, are these reports an indication of where prosecutors are going next?

Republican National Committee

RNC Tries Again On Web Design Doc

Zachary Roth | March 11, 2009, 1:32PM

If at first you don't succeed....

In what looks like a second bite at the apple, Michael Steele's RNC has put out a new Request-For-Proposal for the redesign of its website -- after its original two-page effort was widely panned as sketchy and unprofessional.

That first RFP, which was circulating earlier this week, was so lacking in detail that one prominent right-wing blogger suggested it could mean Steele already had a favored contractor in mind, and was just going thru the RFP process for show. We offered a suggestion for who that favored contractor might be here.

The new RFP, posted by the site Tech President, is a bit longer -- five pages -- and a bit more specific about what the committee is looking for.

One interesting detail: the RNC says it wants a site that, in Tech President's words "functions as the backbone of a distributed network of sites populated by state parties and campaigns -- nonetheless connected back to the mothership at RNC headquarters." It's unclear whether that means it might subsume the state party sites, which currently are independent.

And, unlike before, there's a budget: $250,000 for the main site, plus $200,000 for the network of sites.

AIG

Warren: Is AIG Bailout Money Going To Pay Off "Speculators"?

Zachary Roth | March 11, 2009, 12:31PM

Looks like you can add Elizabeth Warren to the growing list of people who want the federal government to tell us more about that latest AIG bailout.

Warren, who chairs the panel that's monitoring bailout spending on behalf of Congress, went on MSNBC's Rachel Maddow Show last night, and all but demanded more disclosure from Treasury Secretary Tim Geithner.

Maddow raised the fact that AIG has reportedly passed bailout money onto its counterparties on those credit default swaps, and that it currently has four PR firms on its payroll. In response, Warren, appearing perhaps more frustrated than in any of her other numerous media appearances over the last few most, responded:

It doesn't seem strange to me, and the fact that it doesn't seem strange to me tells you something really awful about what it's been like to be in Washington for the last few months.

These financial institutions have figured out that they're bleeding red ink, and their best solution is to persuade the Treasury Department to give them lots of money. And when the Treasury Department starts to say, there may be some problems here, the American people don't want to go along with this, then lets see if we can spin the American people on it.

The Treasury Department has not asked for the critical information about where this money has gone, from AIG. We've poured the money into AIG, and it has somehow poured it out the other end. The Treasury Department has not asked, and has not revealed, what it is that's happening with that money.

And so as long as that's the case, maybe some of the money is going to other financial institutions. Maybe some of the money is going to pay off these credit default swaps that are essential for saving other institutions that have counted on it for credit and insurance. And maybe some of where this money is going is just off to speculators, who just played the game of speculation, and would now like to collect a hundred cents on the dollar form their speculations, and collect it indirectly from the American taxpayer.

You can see the video here. (The excerpt quoted above begins around the 9:00 mark.)

The Federal Reserve, which has been at the center of the latest AIG bailout, has declined to reveal much information about the maneuver, including the identity of AIG's counterparties, saying that doing so could affect confidence in the institutions at issue.

Reports by Warren's panel have grown increasingly critical of Treasury's level of transparency and accountability in regard to the bailout.

Bank of America

Schumer Wants Probe Of Theresa Hatt Phenomenon

Zachary Roth | March 11, 2009, 11:38AM

From TPMmuckraker to the U.S. Senate. Kind of.

Remember our story from last month about how a Bank of America estates rep tried to guilt-trip the son of a deceased card-holder into paying his mother's credit-card balance, though he was under no obligation to do so?

Well, as we noted last week, the New York Times seemed to like it -- following up with their own report on debt collecting firms that contract with the credit card companies to go after the relatives of deceased card-holders, many of whom don't understand that they're usually not obligated to pay the debt.

And now, according to a press release, Sen. Chuck Schumer (D-NY) has called on the Federal Trade Commission to investigate the "deceitful practice that preys on relatives who have no legal obligation to pay their deceased loved ones' bills."

The release says Schumer's call "came on the heels of a high-profile published report last week exposing this practice," -- a reference to the Times story, which appeared to be triggered, in turn, by our own story.

According to Schumer, the practice may already be illegal under existing law, since the Fair Debt Collection Practices Act "prevents the collection companies from contacting anyone other than the debtor about outstanding bills".

He suggests that, at the least, debt collectors should be required to tell the relatives that they aren't legally obligated to pay the debt at issue.

That seems like the least that could be done.

Schumer's full letter to the FTC follows after the jump ...

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The Daily Muck

The Daily Muck

Ben Buchwalter | March 11, 2009, 9:18AM

Texas state lawmakers considered a GOP-backed bill Tuesday that would require voters to present photo identification at the polls, what Democrats call "a modern-day poll tax" because it disproportionately impacts minorities. Republicans claim that this law is necessary to prevent voter fraud, but have offered little evidence that such fraud is a problem. Dems, in the minority, called Attorney General Greg Abbott -- who spent $1.4 million probing voter fraud claims without finding a single vote -- to testify. But, backed by a GOPer, Abbott didn't show up. (Dallas Morning News)

New York Attorney General Andrew Cuomo is investigating whether the massive bonuses paid to Merrill Lynch executives were designed in part to give traders and incentive to mark down their shares, the Financial Times reports. That might suggest that B of A pressured Merrill to understate its fourth quarter earnings in order to make the companies subsequent gains under B of A appear larger. (Reuters)

E-mails released Monday indicated a number of previously unknown links between the Chicago-based Tribune Co. and the Governor Rod Blagojevich. Tribune Co. retained Marc Ganis as a sports business consultant to work with the Blagojevich administration to broker the sale of Wrigley Field. Ganis spoke to Blagojevich chief of staff John Harris about the declining state of the Chicago Tribune and openly expressed his desire for a spot on the 2016 Olympic Committee. Federal agents also allege that members of the Blagojevich administration pressured Nils Larson, an executive vice-president of Tribune Co., to fire members of the Tribune editorial board in exchange for the Governor's assistance in the sale of Wrigley Field. (Chicago Tribune)

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Financial Crisis

McGraw-Hill Tells Kids: "Good Intentions Caused The Financial Crisis"

Zachary Roth | March 10, 2009, 6:29PM

Looks like someone's been reading a few too many of those Republican talking points on the financial crisis.

You may not have been aware of this, but apparently "good intentions caused the financial crisis." That's the headline of a helpful educational primer for kids on the website of McGraw-Hill, a major provider of school textbooks.

In places, the writeup, which explains the historical background of the push for increased home-ownership, and offers a cogent explication of mortgage-backed securities, is quite helpful.

But it's hard to tell this story properly if, for political reasons, you have to steer clear of any explicit acknowledgment that the deregulation of the financial system -- out of a mix of misguided ideology and fealty to corporate interests -- was a major contributor to the collapse. Nor does the flat-out greed and borderline fraud of many major Wall Street banks enter into McGraw-Hill's telling of the story.

Still, maybe we're being too harsh. After all, everyone tried their hardest.

Bonus note: In case you forgot, we told you last month about how McGraw-Hill pulled out of a book deal with major financial blogger (and TPM friend) Barry Ritholtz, after learning that the book, Bailout Nation, would slam Standard & Poor's, the credit-ratings agency owned by McGraw.

Allen Stanford

Stanford Said He Talked To Treasury About Changing Tax Law

Zachary Roth | March 10, 2009, 5:40PM

We told you earlier today about Allen Stanford's lobbying to get some businesses taxed at the US Virgin Islands rate rather than the US rate. And about how Stanford had lately been in the process of moving his Caribbean headquarters to St. Croix, in the Virgin Islands.

Well, one Virgin Islands paper, the St. Thomas Source, has some more interesting details on those subjects...

The paper reports that, in a speech at a 2007 economic summit in St. Croix, Stanford made his pitch for more favorable tax laws that he said would spur more investment. He sought changes that would have allowed money from companies headquartered in the Virgin Islands (like his own) to flow into the US virtually tax free.

Stanford presented this change as a boon to the whole region:

"If that were to happen, the Caribbean Basin as a whole, and the Virgin Islands in particular, would see serious investment begin to flow in almost overnight."

Stanford even said he brought up the idea to US Treasury Department officials, and hoped to have "draft legislation" ready to present by mid October.

He repeated the pitch at a ceremony to break ground on his new planned Caribbean headquarters in the V.I.

"The law must include all Caribbean-created revenues, as long as the company is headquartered in the Virgin Islands," he told the crowd, which contained local dignitaries and lawmakers.

There is no record of any such legislation being introduced since at least 2005, says the paper.

Office Of Net Assessment

Exclusive: Inside The Pentagon's Idea Factory

Justin Elliott | March 10, 2009, 5:35PM

The Great Siberian War Of 2030

Chinese And Russian Asymmetrical Strategies For Space Dominance (2010-2030)
--Index of Office of Net Assessment studies

A tiny office in the Pentagon employs a handful of military officers, teamed up with outside contractors, to study the future.

An index of reports produced by the Office of Net Assessment over the past 20 years, obtained by TPMmuckraker through the Freedom of Information Act, provides a window into the thinking and concerns at the highest levels of the Defense Department.

The jargony official description of the office -- often called the Pentagon's internal think tank -- refers to comparing U.S. "military capabilities" to those of other countries and identifying "emerging or future threats or opportunities for the United States." And, indeed, many of the ONA studies' titles reflect the abstruse interests of military academics (one effort is called Non-Standard Models Of The Diffusion Of Military Technologies: An Alternative View). Others, though, are downright Strangelovian: Fighting A Nuclear-Armed Regional Opponent: Is Victory Possible? [December 2007]; After Next Nuclear Use [July 2002].

The range of subjects includes energy: Future Asian-Pacific Hydrocarbon Demand (1996-2015) [December 1997]; weapons: Role Of High Power Microwave Weapons In Future Intercontinental Conventional War [July 2007]; and Islam: Occultation In Perpertuum: Shi'ite Eschatology And The Iranian Nuclear Crisis [May 2007].

There's the geopolitical: Preventing Large Scale State Failure [April 2008]; the historical: Normandy Retrospective [November 1996], The End of Religiously Motivated Warfare: Lessons From The Puritans And Beyond [June 2007]; and the postmodern: Information As Advertisement And Advertisement As Information [July 2008].

Some of the studies are more inscrutable: The Changing Images Of Human Nature [April 1995], Biometaphor For The Body Politic [March 2006].

The office specializes in looking at issues "20 to 30 years in the future," according to Jan van Tol, who served at ONA before becoming a senior fellow at the Center for Strategic and Budgetary Assessments.

Van Tol says ONA has no more than 15 staffers. Most of the work is done by outside contractors. Despite its size, the influence of the office has been vast since its creation in 1973 by Andrew Marshall, the guru-like figure who still leads ONA. Fred Kaplan, in his book Daydream Believers, profiles Marshall, the so-called "Yoda" of the Pentagon. Kaplan explains the key to Marshall's longevity (he has kept his job longer than anyone at a policy level in Washington) -- and his influence:

"he built a far-flung network of acolytes and loyalists: officers whose unconventional projects he had encouraged and helped to fund; analysts whose work he had sponsored and whose ideas he had helped form; and high-ranking officials, as well as committee chairmen on Capitol Hill, who simply valued having a man of ideas so high up in the Pentagon."

The office reports to the Secretary of Defense, but "its informal channels are probably more important than what you'd find on an organizational chart" says Paul Bracken, professor of management and political science at Yale, who has written at length on net assessment.

"I think it is a powerful influence not just on the building, but on the country. Because there are so few organizations taking fresh looks at problems and not just looking at the fad of the moment," Bracken says.

ONA is perhaps best known for its Cold War work evaluating the strength of the Soviet Union relative to the United States. (The lingering Soviet focus is evident in the index of studies, for example a July 1991 report titled Could The Soviet Threat Go Away?). More recently Marshall was intimately involved in Donald Rumsfeld's project of "military transformation."

One of the preoccupations of the office is American dominance. As I've previously reported, the office earlier this decade ordered a monograph, the length of a short book, that examined ancient empires to glean lessons for the U.S. Two studies in the index are titled simply Preserving American Primacy [January 2006] and Preserving U.S. Military Superiority [August 2001].

In the past decade-plus, ONA has turned its sights to Asia, focusing obsessively on China as the next Soviet-style rival power to the United States. In some of the China work, the apprehension of American military planners is palpable. One March 2006 study is called Rising China Redux: Imperial Memories In A Modern Milieu; a 2005 report addresses The Chinese Penchant For Surprise. Another from 1997 is on Chinese Defense Equipment Modernization to the Year 2020.

The index, while extensive, is not comprehensive. Several studies with classified titles were withheld. The studies' authors are generally listed as individual academics or outside contractors like the Hudson Institute, a Washington think tank, government consulting giant Booz Allen Hamilton, or lesser-known firms like Scitor Corporation and IHS International.

Some more highlights from the index, which you can read in full here, after the jump:

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Ann Copland

Cochran Aide Pleads Guilty In Abramoff Scheme

Zachary Roth | March 10, 2009, 3:29PM

Another day, another guilty plea in the Abramoff saga.

This time it's Ann Copland, the former longtime aide to Mississippi GOP senator Thad Cochran, who was indicted recently on charges that she accepted gifts from Team Abramoff including tickets for concerts and sports events. In exchange, Copland used her position to help Abramoff's clients, the Mississippi Choctaw Indians.

The plea was announced in a Department of Justice press release.

Todd Boulanger, the Abramoff crony who has already pleaded guilty in connection with the wide-ranging scam, once sent an email to Abramoff arguing that Copland should be kept happy because, ''she's more valuable to us than a rank-and-file House member.''

Emails suggest Copland was particularly demanding in seeking favors from Abramoff's crew.

Copland worked for Cochran for 29 years, before abruptly quitting last spring, as her name began to surface in connection with Abramoff.

Today's plea deal, which presumably involves a pledge to cooperate with the ongoing prove, will likely increase speculation that Cochran, who has not been charged with anything, could be in prosecutors' crosshairs.

Kwame Kilpatrick

All The Kwame Sex Texts You Can Handle!

Zachary Roth | March 10, 2009, 3:15PM

Those steamy texts, exchanged by former Detroit mayor Kwame Kilpatrick and his girlfriend Christine Beatty, have been released, as prosecutors develop possible perjury cases against the two.

You can pore over them here.

And since there are 6000 of them ... if you want to help us out, tell us about the most interesting ones in comments, or by emailing the talk address.

Happy hunting!

Allen Stanford

Stanford Financial: Help Wanted!

Zachary Roth | March 10, 2009, 11:28AM

Allen Stanford may have been accused of orchestrating an $8 billion Ponzi scheme. But maybe things aren't all doom and gloom for his firm.

It looks like Stanford Financial is still hiring -- even in these tough economic times!

The company's Antiguan assets have been seized, but if you want to work in client services, IT, or security(!) on the island, you can still send in your resume.

Perhaps unsurprisingly, the firm doesn't seem to have any openings for accountants, or lawyers.

Allen Stanford

Stanford Lobbyist: He Wanted Virgin Islands Tax Rate

Zachary Roth | March 10, 2009, 11:16AM

The Houston Chronicle has a takeout on Ben Barnes, the storied Texas power-broker who's been thrust back into the limelight through his work as Allen Stanford's Washington lobbyist.

Barnes -- who didn't return our call when we wanted to talk about this several weeks ago -- reveals one intriguing nugget about what he was up to on Stanford's behalf.

Reports the paper:

[O]ver the past year, [Stanford] was interested in having business taxed at the U.S. Virgin Islands tax rate rather than the U.S. rate, Barnes said. Stanford wanted legislation to promote investment in the Caribbean.

"This was not Allen Stanford's legislation. This was the U.S. Virgin Islands idea because they wanted more people to come down there, earn money there," Barnes said.

No such measure was approved either by Congress or the U.S. Treasury, he said.

It's unclear exactly what this means. Which businesses would this change have applied to? Stanford had assets in the Virgin Islands, but the major part of his business was based in Antigua.

But -- along with Stanford's opposition to efforts to crack down on offshore tax havens -- it's another small piece of evidence that goes to answer the question of what Stanford hoped to get out of his assiduous attention to American lawmakers.

Late Update: We overlooked this, but it seems that Stanford was in the process of moving his operation to the Virgin Islands. In February 2008, he announced plans to break ground on construction of the ominously titled "Stanford Financial Group global management complex," which would "serve as the head office for Stanford's operations in the Caribbean."

Lester Byrd, the Antiguan prime minister with whom Stanford had been worryingly close -- it was through Byrd that Stanford obtained his knighthood -- left office in 2004, and the Texan had chillier relations with his successor.

The Daily Muck

The Daily Muck

Ben Buchwalter | March 10, 2009, 9:14AM

The Texas Senate will decide today whether voters should be required to present photo identification at the polls. Texas Republicans argue that this is a necessary step to protect against voter fraud, but have produced little evidence that such fraud is a significant problem. Democrats criticize the measure, which will have an undue impact on minorities and the elderly, both key Democratic constituencies. Laws requiring photo identification at the polls have been approved in seven states, but State Sen. Eliot Shapleigh (D-El Paso) said that its only an effort by Republicans to scare off "enough eligible elderly, disabled, blacks and Hispanics to stay in power four more years, plain and simple." (Chron.com)

New York Attorney General Andrew Cuomo said in a letter Monday that he would continue to seek information on bonuses that Merrill Lynch paid to its employees. In a recent interview, Bank of America's CEO Ken Lewis refused to reveal information about these bonuses. But Cuomo maintains that as a recipient of bailout funds, B of A is obligated to disclose how they spent taxpayer money. Refusal to do so, he said, "fuels distrust and cynicism at a most sensitive time." (New York Times)

Documents released by a group of California Democrats indicate that they received thousands of dollars worth of gifts from lobbyists the day after Gov. Arnold Schwarzenegger declared California's fiscal emergency last December. Lobbyists for lawyers, firefighters and carpenters hosted a two-day retreat to influence lawmakers on California's budget passed in February. The lobbyists also paid for international travel, tickets to sporting events, and tens of thousands of dollars in restaurant tabs. The L.A. Times reports that each of the lobbyists' goals was represented in the budget. (L.A. Times)

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Michael Steele

Is Steele Favoring Ally's Firm For Web Design?

Zachary Roth | March 9, 2009, 7:25PM

So about that RNC Request-For-Proposal for a contract to redesign the committee's website...

As we told you earlier, the document's hilarious vagueness and notably short time frame, flagged by the site Tech President, among others, haven't just provoked ridicule at the apparent incompetence of Michael Steele's RNC. They've also spurred one leading conservative blogger, Red State's Erick Erickson, to angrily suggest that Steele's team has already decided to give the contract to a favored firm, and sent out the RFP merely for the sake of optics.

That got us to poking around. And there's at least one web development firm that fits the bill as being close to Steele.

That would be iWeb Strategies, a political web design company with a long list of conservative and GOP clients. In fact, one of those clients, according to the firm's website, was Steele himself, whose own now-defunct site, promoting his recent run for RNC chair, was designed by iWeb.

iWeb is run by Blaise Hazelwood, an experienced GOP consultant, who, while at the RNC, played a key role in building the vaunted Voter Vault database that helped produce the impressive GOP turnout in 2004 that carried President Bush to victory. Hazelwood also runs a voter-targeting firm called Grassroots Strategies.

During his run for RNC chair, Steele responded to a questionnaire sent out by a GOP committeman. Asked which political consultants were assisting him, he named Hazelwood, as well as Curt Anderson, who runs a consulting firm called On Message.

Anderson also has close ties to Hazelwood. According to reports, he was her boss while both were at the RNC. And iWeb also touts its design work for On Message.

It seems clear that Anderson, at least, is still helping to call the shots at the RNC. In a piece published by Politico today, Anderson defended Steele's controversial tenure at the committee, identifying himself in a bio line as a "top adviser to Chairman Steele" who "has been Steele's personal friend for 15 years."

And last week, Politico reported, amid resignations by several RNC staffers:

For now, "the fourth floor," as the RNC's executive suite is known, is being run by a pair of consultants.

So: could those two consultants be Hazelwood and Anderson? And was that embarrassing RFP a reflection of the new chairman's pre-existing desire to give the web consulting contract to Hazelwood's iWeb?

Neither the RNC nor Hazelwood responded immediately to TPMmuckraker's requests for comment.

Barack Obama

Obama Memo Limits Use Of Signing Statements

Zachary Roth | March 9, 2009, 5:26PM

President Obama has issued a new memo that seeks to restrict his administration's use of presidential signing statements, one of the key techniques that President Bush used to get around the law.

Among other things, the memo directs executive branch officials to tell Congress ahead of time if there are constitutional concerns about pending legislation, thereby reducing the number of occasions when a signing statement will be needed.

It also declares that the president will act with "caution and restraint" in determining whether an act of Congress is unconstitutional.

And it pledges that the president's signing statements will identify "constitutional concerns about a statutory provision with sufficient specificity to make clear the nature and basis of the constitutional objection."

You can see the full memo here ...

Michael Steele

RNC Web Design Doc Is "Every Consultant's Worst Nightmare"

Zachary Roth | March 9, 2009, 5:00PM

We've talked to a couple more people about that Request-for-Proposal sent out by Michael Steele's RNC, looking for a consultant to redesign the organization's website.

And if there were any doubt before about the fact the document is embarrassingly sketchy and vague for a project of this kind, there's isn't now.

"It's really hard to write a proposal for that vague of a request," Jennifer Kyrnin, who has been designing web sites since 1995, and teaching web design since 1997, and who frequently responds to RFP's for web design work, told TPMmuckraker.

Kyrnin allowed that she had received RFP's as vague as this one, but never from a company or organization as prominent as the GOP. "Most are from new small businesses who've never put up a site before," she said.

Kyrnin flagged several obvious weak spots in the RFP.

Citing the RNC's view that "an aesthetically pleasing site that is intuitive and fun to use should be the overall goal," she said: "Well, yeah. I mean, that's what everybody wants."

As for the RNC's advice that it want someone with "experience in building social networks," Kyrnin said: "That, I look at and I go, 'what the heck do you mean?' If I were writing a proposal that would make me nervous."

The RFP, which surfaced Friday and appears to have been sent out shortly before, calls for bids to be submitted by March 18. Kyrnin called that deadline "very short."

"Most of the companies that are large give at least a month," she added. "If they're asking for it a week from Wednesday, you get the quality that you can expect from a rapidly written proposal."

Kyrnin said that if she were to receive this RFP, her response would be to request more detailed instructions before submitting a bid. But given the fast-approaching deadline, she said she wouldn't expect to get a response.

Micah Sifry, a founder of the Personal Democracy Forum, which focuses on the intersection of technology and politics, and whose site was among the first to highlight the RFP Monday, agreed. He called the document "at best a back of the envelope vision statement that you give to someone to write an RFP."

"This is every consultant's nightmare," said Sifry, who, like Kyrnin, has worked regularly with such RFP's for web design. "They have no idea what they're asking for."

Conservtive blogger Dale Franks, who, as we noted earlier, says he responds to web design RFP's for a living, has already offered his own point-by-point rundown on the "confusion and idiocy" of the document.

And Red State's Erick Erickson was so appalled that he suggested the RNC may already have decided to give the contract to a favored firm, and had sent out the RFP merely to cover its bases.

Michael Steele

New Steele Setback: RNC Doc On Web Redesign Draws Ridicule, Suspicion

Zachary Roth | March 9, 2009, 3:00PM

Michael Steele has already said that he's going to implement communications strategies at the RNC that are "off the hook" and "beyond cutting edge." But is he now taking things to a whole new level?

Check out this RNC Request-for-Proposal that's been circulating on the internet, soliciting bids for redesigning the group's website.

It begins with a general (very general) statement of principles:

Chairman Steele made his tech priorities clear at the [RNC Tech Summit]: "...bottom line is if we haven't done it - let's do it. If we haven't thought of it - think about it. If it hasn't been tried - why not? If it's going to be 'outside the box' - then not only keep it outside the box, but take it to someplace the box hasn't even reached yet."

And it doesn't get a whole lot more specific after that. In fact, the two-page document is so light on the kind of details you might expect an RFP of this sort to have, that it's already being slammed on conservative blogs.

Dale Franks at The Next Right -- who says he responds to web development RFP's for a living -- calls the document "a masterpiece of confusion and idiocy" that was put together by "clueless losers". He continues:

I assume it was written by someone who has heard of this new thing called "com-poo-tors", and who doesn't actually have one, but has been told that they'll be very big in the future.

In fact, one prominent conservative thinks the document is so sketchy that it could suggest that the open bidding process is just for show, and that the RNC has already picked out a favored contractor.

Erick Erickson, the founder of Red State, writes:

Friends, either the RNC has no freakin' clue what the hell it is doing or else all the rumors about certain consultants having an inside track at RNC contracts is true.

Why? Because there is no way any competent person would put together an RFP like this. It's crap. It is not legitimate. It is unprofessional. It is illusory.

Either they don't know what they are doing, or they've already picked their consultant and are going through the motions. If it is the former, well, the RNC is screwed. If it is the latter, Michael Steele's claims about bidding out work was B.S.

And I suspect it is all B.S.

These are hardly the first allegations of contract-related BS directed at Steele. The FBI has been investigating payments made by his 2006 Senate campaign to a catering company run by his sister, which were listed as being for media work, and ... web design.

And a Baltimore TV station recently reported that that same Steele campaign paid $64,000 to a commodities trading firm, run by a Steele fundraiser, for work that was described as "political consulting."

We've been looking to get a better sense of how this RFP measures up to the kind of document that a potential contractor would need in order to submit an effective bid on a project like this. (Readers with experience bidding on these kinds of contracts, we'd love to hear from you, too.)

We're also hearing more about what Erickson means when he refers to rumors about "certain consultants having an inside track at RNC contracts"...

We've also asked the RNC about all this (no response so far, shockingly), and will keep you posted on what we find out...

Don Siegelman

Rove On Siegelman Answers: Check My Website

Zachary Roth | March 9, 2009, 12:31PM

Over the weekend, Karl Rove talked a little more with Fox News about his impending testimony on the US Attorney firings and the Don Siegelman case.

He denied, as he has before, that there had been inappropriate political involvement in the firings. And he even appeared to suggest that, particularly in regard to the Siegelman matter, there was less need for his testimony because he has already responded to questions on his website, Rove.com.

Here's the video:

David Addington

Report: Addington, Like Gonzo, Said To Still Be Looking For Work

Zachary Roth | March 9, 2009, 11:34AM

Buried in a New York Times story today about the fallout for several former Bush lawyers who crafted the administration's war on terror policies, is the following gratifying nugget:

David S. Addington, a top aide to Vice President Dick Cheney who was a forceful voice in internal legal debates, is also said to still be looking for work.

As far as we know, Addington has not yet described himself as a "casualty of the war on terror", as Alberto Gonzales did recently in explaining his own failure to find a job.

AIG

AIG Counter-Party List Is Heavy On Foreign Banks

Zachary Roth | March 9, 2009, 11:11AM

Last week, we rounded up some reports from last fall that named some of the banks that AIG did business with on those credit-default swaps -- and therefore offered a first pass at where the fallen insurance behemoth's latest round of bailout money might ultimately be going.

But over the weekend, the Wall Street Journal offered some updated reporting (sub. req.) on that score. It obtained a confidential document listing banks that have been paid a total of roughly $50 billion by AIG, since it was first bailed out last fall.

Here's the Journal's list:

* Goldman Sachs
* Deutsche Bank
* Merrill Lynch
* Société Générale
* Calyon
* Barclays
* Rabobank
* Danske
* HSBC
* Royal Bank of Scotland
* Banco Santander
* Morgan Stanley
* Wachovia
* Bank of America
* Lloyds Banking Group

That includes $6 billion each for Goldman Sachs and Deutsche Bank.

As you can see, there's some overlap there with what we told you the Journal and the New York Times had previously reported.

But the new list shows how many of AIG's counter-parties were European -- a fact that's likely to add to frustration, among members of Congress and the public, that US taxpayer dollars are ultimately being used to save foreign banks from the consequences of their disastrous decisions to do credit default swaps with AIG. It's also likely to further fuel congressional demands that the federal government identify all of AIG's trading partners.

The Daily Muck

The Daily Muck

Ben Buchwalter | March 9, 2009, 9:17AM

A federal grand jury indicted a former high-ranking NASA official Friday for using a government position for his own profit. After playing an important role in George W. Bush's 2000 campaign, Courtney Stadd served as NASA's chief of staff and White House liaison until 2003. The indictment charges Stadd, after being named as "special government employee" for NASA in 2005, with diverting $9.6 million earmarked for earth science to one of his clients, Mississippi State University's GeoResources Institute. If convicted, Stadd could face 15 years in prison. (Washington Post)

Employees of Allen Stanford's companies won't avoid the fallout from his $8 billion Ponzi scheme, a court-appointed lawyer confirmed this weekend. The U.S. receiver assigned to oversee Stanford Financial Group announced he would lay off 1,000 employees immediately and without severance packages. Only 15 percent of the firm's current employees will remain to help draw down operations. A federal judge also froze the assets of 12,000 Stanford investors effective Monday. (Associated Press)

FDA scientists expressed concern this week about the recent approval of Menaflex, a device that treats a variety of knee injuries. The scientists claimed that the FDA approved Menaflex without proper clinical trials under fast-track rules that "apply to products that are similar to already-existing products." But FDA sources told the Wall Street Journal that Menaflex does not mirror any pre-existing knee treatment available in the United States and should have been considered more carefully. A former head of the FDA said that this is indicative of a fast-track system for the $200 billion per year industry that "has gotten out of control." (Wall Street Journal)

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