TPMMuckraker
April 12, 2009 - April 18, 2009

Did Steve Rattner Really "Cover" The Chrysler Bailout For The Times?

Moe Tkacik | April 17, 2009, 5:56PM

Before he was linked to the expansive New York pay to pay probe for paying shady "finder's fees" to steer $100 million in pension money to his private equity firm, Obama "car czar" Steve Rattner was controversial for a more straightforward reason: there was something of a deficit of evidence he knew anything about cars.

Having spent most of his lucrative financial career investing in and advising media companies, Rattner's automotive experience appeared limited to two things: first, his private equity firm Quadrangle made a bad loan to the private equity firm that owns Chrysler to make an investment in Maxim magazine that managed to reap worse returns than the ailing automaker. And secondly, there was the fact that Rattner had, as NPR and other news agencies reported, covered the Chrysler bailout as a reporter for the New York Times in 1979. NPR even quoted from a story he had written on the bailout, and the Wall Street Journal subtly emphasized that bailout's significance in Rattner's career in a profile that ran earlier this month:

Roger Altman, a Wall Street financier who was the Treasury Department's point man during the first Chrysler bailout in 1979, says Mr. Rattner is well-suited for his new job.

"Steve has a brilliant grasp of finance, and that is the single-most important ingredient here," said Mr. Altman, a longtime mentor who lured Mr. Rattner to Lehman Brothers in 1982.

We'd better hope Altman is right about that.

PERMALINK | COMMENTS (2) | RECOMMEND RECOMMEND (3)
Topics: Steve Rattner

George Bush

Who Are the Torture Memo Authors?

Zachary Roth | April 17, 2009, 4:59PM

For all the (justified) clamor over the Bush administration's torture memos that were released yesterday, there's been surprisingly little attention paid to the two authors of those documents.

As officials in the department's Office of Legal Counsel Jay Bybee and Steven Bradbury authored the four memos. The first was written in 2002 by Bybee, and the latter three in 2005 by Bradbury. So: who are Bybee and Bradbury?

PERMALINK | COMMENTS (17) | RECOMMEND RECOMMEND (18)
Topics: George Bush, Harriet Miers, Jay Bybee, Justice Department, Steven Bradbury, Torture, U.S. Attorneys

Steve Rattner

Did Auto Czar Steve Rattner Help Scam New York Pensioners?

Moe Tkacik | April 17, 2009, 2:12PM

Steve Rattner, the money manager who is Obama's top adviser on bailing out the auto industry, is uncomfortably close to a criminal investigation into the New York state pension fund, newspapers reported today.

In October 2004 Rattner, the private equity investor and former New York Times reporter who is leading (if not quite the "czar" of) the Obama administration's task force to save the auto industry, met with David Loglisci, the recently-indicted chief investment officer of the New York General Pension Fund to solicit an investment in his private equity fund Quandrangle, according to news reports in today's New York Times and the Wall Street Journal. By January Rattner's fund had allegedly signed a written agreement to give a 1.1% cut of whatever investment Quadrangle received from the fund to Henry Morris, the (also recently indicted) former aide to the disgraced former state comptroller Alan Hevesi. A few days later, as if to sweeten the deal, Rattner agreed to meet with Loglisci's brother and wound up investing $88,841 for the DVD distribution rights to a movie that had grossed barely a third of that during its brief release in theaters through a Quadrangle affiliate called GT Brands. (The brother produced the movie, Chooch.) Three weeks later, Loglisci the CIO "personally informed" Rattner that Quadrangle would be getting a $100 million investment from the pension fund -- and over the next two and a half years Morris would in turn collect over a million dollars in "finders fees" for the transactions.

Those, at least, are the allegations of a lawsuit filed Wednesday by the SEC against Morris, Loglisci and two of their associates in the latest development in the protracted pay-to-play probe of New York state pension funds. The lawsuit only makes reference to a "Quadrangle executive" but the Times and the Journal quote sources confirming the executive is Rattner. Both papers also specify that Rattner is not himself a target of the probe, and that he told the administration about the investigation when he took the job.

PERMALINK | COMMENTS (6) | RECOMMEND RECOMMEND (3)
Topics: Municipal finance, Steve Rattner

George Bush

Sleep Expert "Surprised And Saddened" To Find Research Twisted In Torture Memo

Zachary Roth | April 17, 2009, 2:03PM

A British professor whose research on sleep was cited in one of the just-released Bush administration torture memos has expressed outrage that his work was used to justify extreme sleep deprivation, including keeping subjects awake for up to 11 days.

In an interview with TPMmuckraker, James Horne, a leading authority in the field of sleep research, said he was "surprised and saddened" to see Bush officials "misrepresent" his research to argue that such sleep deprivation does not cause serious harm to its subjects.

PERMALINK | COMMENTS (31) | RECOMMEND RECOMMEND (47)
Topics: George Bush, Justice Department, Steven Bradbury, Torture

Media

Scarborough: Torture Opponents Want "Washington DC And Los Angeles To Be Obliterated By A Nuclear Blitz"

Zachary Roth | April 17, 2009, 12:36PM

MSNBC's Joe Scarborough went on quite a rant this morning, attacking President Obama's decision to release the torture memos.

He ended up by calling for an honest (kind of) debate: "If you'd like Washington DC and Los Angeles to be obliterated by a nuclear blitz [rather than permitting the use of waterboarding], I respect your opinion."

Watch:

Good old liberal MSNBC.

PERMALINK | COMMENTS (22) | RECOMMEND RECOMMEND (7)
Topics: Barack Obama, Media, Torture

John McCain

Sergeant Who Smeared Fellow Soldier, New Republic Writer Executed Four Iraqi Men

Brian Beutler | April 17, 2009, 11:46AM

A senior enlisted U.S. Army soldier--Master Sergeant John Hatley--was convicted two days ago by a military jury in Germany of executing four handcuffed, blindfolded Iraqi men by shooting them in the backs of their heads.

That's a newsworthy (and, of course, gruesome) story in and of itself, but there's a story behind the story.

PERMALINK | COMMENTS (32) | RECOMMEND RECOMMEND (55)
Topics: Iraq, John McCain

Jennifer zuccarrelli

JP Morgan Chief Disses TARP While Poaching Its Staff

Moe Tkacik | April 17, 2009, 11:34AM

Yesterday JP Morgan became the second huge bank this week to announce a return to multibillion dollar profits, largely due to record trading profits that are probably "one-offs" related to AIG, but nevertheless use this triumphant return to the black as an opportunity to boast about its plans to pay back its TARP money and get back into the eight figure bonus business. And JP Morgan CEO Jamie Dimon wasn't exactly at a loss for mirth over that last part in the morning's conference call:

Dimon, calling money received through the Troubled Asset Relief Program "a scarlet letter" and "the TARP baby," said on a conference call with reporters today that the New York- based bank is awaiting guidance from the U.S. Treasury Department...The bank, which bought about $34 billion in mortgage-backed and asset-backed securities in the quarter, doesn't expect to participate as either a buyer or seller in the Treasury's Public-Private Investment Program, known as PPIP. "We learned our lesson" about borrowing from the government, said Dimon.

But if that's so true, what's Jennifer Zuccarrelli, a top aide to former TARP overseer Neel Kashkari, doing on loan to the JP Morgan media relations department?

PERMALINK | COMMENTS (1) | RECOMMEND RECOMMEND (6)
Topics: Jamie Dimon, Jennifer zuccarrelli

Norm Coleman

Coleman Again Won't Say Whether He's Heard From Feds On Kazeminy Probe

Zachary Roth | April 17, 2009, 11:21AM

Losing his Senate seat may be the least of Norm Coleman's worries.

It's looking more and more like the former Minnesota senator has heard from federal investigators who are investigating the Nasser Kazeminy allegations.

Asked by the Minneapolis Star Tribune editorial board whether he had been contacted with the FBI in connection with the probe, Coleman refused to say, instead pivoting to attack the paper:

PERMALINK | COMMENTS (9) | RECOMMEND RECOMMEND (4)
Topics: FBI, Nasser Kazeminy, Norm Coleman

The Daily Muck

Ben Buchwalter | April 17, 2009, 9:13AM

The Michigan-based Council of Islamic Organizations said Thursday that it asked Attorney General Eric Holder to review complaints that the FBI planted Muslims in mosques to spy on Islamic leaders and community members. Congregation members said that the FBI probes extended beyond alleged spying on Islamic leaders who allegedly supported terrorist acts; some community members were told that the FBI could resolve citizenship cases if they spied on their Mosque. An official in another Michigan Muslim organization said that as Holder revamps the Justice Department "it's extremely necessary for him to take a serious look at this issue." (AP)

PERMALINK | COMMENTS (0) | RECOMMEND RECOMMEND (4)
Topics: The Daily Muck

GE

CNBC Under Corporate Pressure To Stop Bashing Obama?

Moe Tkacik | April 16, 2009, 8:48PM

Earlier this month Goldman Sachs CEO Lloyd Blankfein gave a speech condemning Wall Street's systemic greed and sloppiness, prompting pundits to wonder if Wall Street was finally starting to "get it." Could Wall Street's preeminent mouthpiece CNBC be starting to "get it" as well?

A unnamed source at the network told this morning's New York Post that NBC Universal chief Jeff Zucker and Jeff Immelt, CEO of parent company GE, had recently convened a dinner with the network's top brass and some of its high-profile reporters to discuss whether the network that launched a thousand search engine queries into the meaning of teabag should start distancing itself from the "grassroots" war it started with the Obama administration two months ago. Indeed, yesterday the network mentioned the T-word by far the fewest times of any of the major cable news networks. The Post source, an anonymous "insider," said dispatches from the dinner had been filtering down to reporters, who were concerned about being "muzzled by GE."

Quoting the Post ...

"It was an intensive, three-hour dinner at 30 Rock which Zucker himself was behind," a source familiar with the powwow told us. "There was a long discussion about whether CNBC has become too conservative and is beating up on Obama too much. There's great concern that CNBC is now the anti-Obama network. The whole meeting was really kind of creepy."

Media bias at CNBC has been a hot topic since CNBC anchor Rick Santelli, a former options trader who reports on the arcana driving interest rates and futures from the pit of the Chicago Board of Trade, touched off the tea party madness when he used one of his live spots in February to deliver an impassioned and incoherent speech predicting the "collectivist" path pursued by the Obama mortgage modification bill would impoverish the country such that Americans, like Cubans, would soon be driving "54 Chevys" (which he added was "maybe the last great car to come out of Detroit.")

Santelli's rant, in turn, fueled a campaign led by The Daily Show host Jon Stewart to hold the network "accountable," a sentiment echoed in an online petition signed by dozens of prominent economists exhorting network execs to Fix CNBC:

Americans need CNBC to do strong, watchdog journalism - asking tough questions to Wall Street, debunking lies, and reporting the truth. Instead, CNBC has done PR for Wall Street. You've been so obsessed with getting "access" to failed CEOs that you willfully passed on misinformation to the public for years, helping to get us into the economic crisis we face today.

So are Zucker and Immelt really coming down on CNBC to lighten up on Obama? Not so, says a CNBC staffer who attended the dinner...

PERMALINK | COMMENTS (7) | RECOMMEND RECOMMEND (13)
Topics: CNBC, GE, Jeffrey Immelt, Jim Cramer, Rick Santelli

Justice Department

Torture Memo: Detainees Can Be Naked In Front Of Women, Causing "Pyschological Discomfort" For "Modest" Detainees

Zachary Roth | April 16, 2009, 6:25PM

From one of the May 2005 OLC memos by Steven Bradbury:

Nudity. This technique is used to cause psychological discomfort, particularly if a detainee, for cultural or other reasons, is especially modest ... [I]nterrogators can exploit the detainee's fear of being seen naked. In addition, female officers involved in the interrogation process may see the detainees naked; and for purposes of our analysis, we will assume that detainees subjected to nudity as an interrogation technique are aware that they may be seen naked by female.

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Topics: George Bush, Justice Department, Sex, Torture

George Bush

Torture Memo: Waterboarding Is "Simply A Controlled Acute Episode," Not Torture

Zachary Roth | April 16, 2009, 5:21PM

Here's the official Bush legal rationale for waterboarding -- which Eric Holder recently confirmed was torture -- from that 2002 memo by Jay Bybee.

Finally, you would like to use a technique called the "waterboard." In this procedure, the individual is bound securely to an inclined bench, which is approximately four feet by seven feet. The individual's feet are generally elevated. A cloth is placed over the forehead and eyes. Water is then applied to the cloth in a controlled manner. As this is done, the cloth is lowered until it covers both the nose and mouth. Once the cloth is saturated and completely covers the mouth and nose, air flow is slightly restricted for 20 to 40 seconds due to the presence of the cloth. This causes an increase in carbon dioxide level in the individual's blood. This increase in the carbon dioxide level stimulates increased effort to breathe. This effort plus the cloth produces the perception of "suffocation and incipient panic," i.e., the perception of drowning. The individual does not breathe any water into his lungs. During those 20 to 40 seconds, water is continuously applied from a height of twelve to twenty-four inches. After this period, the cloth is lifted, and the individual is allowed to breathe unimpeded for three or four full breaths. the sensation of drowning is immediately relieved by the removal of the cloth. The procedure may then be repeated. The water is usually applied from a canteen cup or small watering can with a spout. You have orally informed us that this procedure triggers an automatic physiological sensation of drowning that the individual cannot control even though he may be aware that he is not in fact drowning. You have also orally informed us that it is likely that this procedure would not last more than twenty minutes in any one application.
As we understand it, when the waterboard is used, the subject's body responds as if the subject were drowning -- even though the subject may be well aware that he is in fact not drowning. You have informed us that this procedure does not inflict actual physical harm. Thus, although the subject may experience the fear or panic associated with the feeling of drowning, the waterboard does not inflict physical pain. as we explained in the Section 2340A Memorandum, "pain and suffering" as used in Section 2340 is best understood as a single concept, not distinct concepts of "pain" as distinguished from "suffering".... The waterboard, which inflicts no pain or actual harm whatsoever, does not, in our view, inflict "severe pain and suffering". Even if one were to parse the stature more "finely" to attempt to treat suffering as a distinct concept, the waterboard could not be said to inflict severe suffering. The waterboard is simply a controlled acute episode, lacking the connotation of a protracted period of time generally given to suffering.

Of course, thanks to today's announcement by DOJ, CIA officers can't be prosecuted for this.

PERMALINK | COMMENTS (16) | RECOMMEND RECOMMEND (4)
Topics: CIA, George Bush, Justice Department, Torture

Torture

Torture Memo: As Long As You Don't Keep The Guy Awake For More Than 11 Days, It's Fine

Zachary Roth | April 16, 2009, 4:41PM

Here's a taste of the Bush administration's legal rationale, exemplified in one excerpt from the 2002 OLC memo written by Assistant Attorney General Jay Bybee, about the interrogation of Abu Zubaydah, a high-ranking al Qaeda member:

Sleep deprivation may be used. You have indicated that your purpose in using this technique is to reduce the individual's ability to think on his feet and, through the discomfort associated with lack of sleep, to motivate him to cooperate. The effect of such sleep deprivation will generally remit after one or two nights of uninterrupted sleep. You have informed us that your research has revealed that, in rare instances, some individuals who are already predisposed to psychological problems may experience abnormal reactions to sleep deprivation. Even in those cases, however, reactions abate after the individual is permitted to sleep. Moreover, personnel with medical training are available to and will intervene in the unlikely event of an abnormal reaction. You have orally informed us that you would not deprive Zubaydah of sleep for more than eleven days at a time and that you have previously kept him awake for 72 hours, from which no mental or physical harm resulted. (our itals)

If you have time, comb through the memos yourselves (they're here) and let us know what else you find.

PERMALINK | COMMENTS (37) | RECOMMEND RECOMMEND (12)
Topics: George Bush, Justice Department, Torture

Torture

Rights Group Decries Waterboarding Immunity

Zachary Roth | April 16, 2009, 4:20PM

It's worth making sure we don't lose sight of the apparent price that the Obama administration paid to the intelligence community to mollify them over the release of the torture memos: a pledge not to prosecute agency personnel for waterboarding.

Here's a statement from the Center for Constitutional Rights, which has led the fight against torture, calling the decision "one of the deepest disappointments of this administration".

CCR Decries Immunity for Torture, Secrecy
April 16, 2009, New York - In response to President Obama's decision to guarantee immunity to CIA officials who carried out the drowning torture known as waterboarding, which his attorney general has classified as torture, the Center for Constitutional Rights issued the following statement:

"It is one of the deepest disappointments of this administration that it appears unwilling to uphold the law where crimes have been committed by former officials. Whether or not CIA operatives who conducted waterboarding are guaranteed immunity, it is the high level officials who conceived, justified and ordered the torture program who bear the most responsibility for breaking domestic and international law, and it is they who must be prosecuted. In the president's statement today, the most troubling contradiction is the contrast of the words, 'This is a time for reflection, not retribution,' followed shortly by, 'The United States is a nation of laws.' Government officials broke very serious laws: for there to be no consequences not only calls our system of justice into question, it leaves the gate open for this to happen again."

Since the first days of the public revelations regarding the Bush administration's torture program, the Center for Constitutional Rights has made efforts to hold high level officials and their lawyers accountable for their crimes. CCR, along with the European Center for Constitutional and Human Rights (ECCHR) and the International Federation of Human Rights (FIDH), has tried three times, twice in Germany and once in France, to bring criminal cases in Europe against former Defense Secretary Rumsfeld, former CIA director George Tenet, and former White House Counsel/Former Attorney General Alberto Gonzales as well as the other lawyers who were part of the conspiracy that authorized the torture program in Guantanamo, Iraq, secret CIA sites, and elsewhere. The German case is still pending. CCR also has torture cases pending in U.S. courts.

PERMALINK | COMMENTS (8) | RECOMMEND RECOMMEND (1)
Topics: Barack Obama, Justice Department, Torture

Barack Obama

Torture Memos Released

Zachary Roth | April 16, 2009, 4:03PM

Here are the OLC torture memos just released by the Justice Department...

An 18-page memo [PDF], dated August 1, 2002, from Jay Bybee, Assistant Attorney General, OLC, to John A. Rizzo, General Counsel CIA.

A 46-page memo [PDF], dated May 10, 2005, from Steven Bradbury, Acting Assistant Attorney General, OLC, to John A. Rizzo, General Counsel CIA.

A 20-page memo [PDF], dated May 10, 2005, from Steven Bradbury, Acting Assistant Attorney General, OLC, to John A. Rizzo, General Counsel CIA.

A 40-page memo [PDF], dated May 30, 2005, from Steven Bradbury, Acting Assistant Attorney General, OLC, to John A. Rizzo, General Counsel CIA.

Go to it!

PERMALINK | COMMENTS (14) | RECOMMEND RECOMMEND (15)
Topics: Barack Obama, Justice Department, Torture

Wiretapping

Bush Intel Chiefs: Wiretapping Was Legal

Zachary Roth | April 16, 2009, 3:22PM

Earlier today, two former Bush intelligence chiefs -- John Negroponte, who was director of national intelligence, and Michael Hayden, who was CIA director -- went on MSNBC to push back against that New York Times report about wiretapping by the NSA.

Negroponte said "I have no question about the legality" of the program. Hayden used a different formulation: "National Security Agency follows the law." For whatever it's worth, those claims contradict the Times' report.

Watch:

PERMALINK | COMMENTS (3) | RECOMMEND RECOMMEND (4)
Topics: CIA, Wiretapping

Barack Obama

Obama Releasing Four Torture Memos

Zachary Roth | April 16, 2009, 3:05PM

In a statement from President Obama, the administration announced that it would release four of the Bush Justice Department memos justifying harsh interrogation techniques that had been sought in an ACLU lawsuit.

One of the memos is from 2002, the other three are from 2005.

According to the AP:

One memo specifically authorized a method for combining multiple techniques, a practice human rights advocates argue is particularly harmful and crosses the line into torture even if any of the individual methods do not.

...

The methods include keeping detainees naked for long periods, keeping them in a painful standing position for long periods, and depriving them of solid food. Other tactics included using a plastic neck collar to slam detainees into walls, keeping the detainee's cell cold for long periods, and beating and kicking the detainee. Sleep-deprivation, prolonged shackling, and threats to a detainee's family were also used.

Among the things not allowed in the memo were allowing a prisoner's body temperature or caloric intake to fall below a certain level, because either could cause permanent damage, the officials said.

The techniques were applied to 14 suspects considered very senior terrorists.

In addition, the Justice Department announced in a statement that CIA employees won't be tried for waterboarding.

Here's the full statement from the White House. The statement from DOJ follows it.

Statement of President Barack Obama on Release of OLC Memos
The Department of Justice will today release certain memos issued by the Office of Legal Counsel between 2002 and 2005 as part of an ongoing court case. These memos speak to techniques that were used in the interrogation of terrorism suspects during that period, and their release is required by the rule of law.

My judgment on the content of these memos is a matter of record. In one of my very first acts as President, I prohibited the use of these interrogation techniques by the United States because they undermine our moral authority and do not make us safer. Enlisting our values in the protection of our people makes us stronger and more secure. A democracy as resilient as ours must reject the false choice between our security and our ideals, and that is why these methods of interrogation are already a thing of the past.

But that is not what compelled the release of these legal documents today. While I believe strongly in transparency and accountability, I also believe that in a dangerous world, the United States must sometimes carry out intelligence operations and protect information that is classified for purposes of national security. I have already fought for that principle in court and will do so again in the future. However, after consulting with the Attorney General, the Director of National Intelligence, and others, I believe that exceptional circumstances surround these memos and require their release.

First, the interrogation techniques described in these memos have already been widely reported. Second, the previous Administration publicly acknowledged portions of the program - and some of the practices - associated with these memos. Third, I have already ended the techniques described in the memos through an Executive Order. Therefore, withholding these memos would only serve to deny facts that have been in the public domain for some time. This could contribute to an inaccurate accounting of the past, and fuel erroneous and inflammatory assumptions about actions taken by the United States.

In releasing these memos, it is our intention to assure those who carried out their duties relying in good faith upon legal advice from the Department of Justice that they will not be subject to prosecution. The men and women of our intelligence community serve courageously on the front lines of a dangerous world. Their accomplishments are unsung and their names unknown, but because of their sacrifices, every single American is safer. We must protect their identities as vigilantly as they protect our security, and we must provide them with the confidence that they can do their jobs.

Going forward, it is my strong belief that the United States has a solemn duty to vigorously maintain the classified nature of certain activities and information related to national security. This is an extraordinarily important responsibility of the presidency, and it is one that I will carry out assertively irrespective of any political concern. Consequently, the exceptional circumstances surrounding these memos should not be viewed as an erosion of the strong legal basis for maintaining the classified nature of secret activities. I will always do whatever is necessary to protect the national security of the United States.

This is a time for reflection, not retribution. I respect the strong views and emotions that these issues evoke. We have been through a dark and painful chapter in our history. But at a time of great challenges and disturbing disunity, nothing will be gained by spending our time and energy laying blame for the past. Our national greatness is embedded in America's ability to right its course in concert with our core values, and to move forward with confidence. That is why we must resist the forces that divide us, and instead come together on behalf of our common future.

The United States is a nation of laws. My Administration will always act in accordance with those laws, and with an unshakeable commitment to our ideals. That is why we have released these memos, and that is why we have taken steps to ensure that the actions described within them never take place again.

Here's the statement from Attorney General Eric Holder:

DEPARTMENT OF JUSTICE RELEASES FOUR OFFICE OF LEGAL COUNSEL OPINIONS
In connection with ongoing litigation, the Department of Justice today released four previously undisclosed Office of Legal Counsel ("OLC") opinions - one that OLC issued to the Central Intelligence Agency in August 2002 and three that OLC issued to the CIA in May 2005.

"The President has halted the use of the interrogation techniques described in these opinions, and this administration has made clear from day one that it will not condone torture," said Attorney General Eric Holder. "We are disclosing these memos consistent with our commitment to the rule of law."

Holder also stressed that intelligence community officials who acted reasonably and relied in good faith on authoritative legal advice from the Justice Department that their conduct was lawful, and conformed their conduct to that advice, would not face federal prosecutions for that conduct.

The Attorney General has informed the Central Intelligence Agency that the government would provide legal representation to any employee, at no cost to the employee, in any state or federal judicial or administrative proceeding brought against the employee based on such conduct and would take measures to respond to any proceeding initiated against the employee in any international or foreign tribunal, including appointing counsel to act on the employee's behalf and asserting any available immunities and other defenses in the proceeding itself.

To the extent permissible under federal law, the government will also indemnify any employee for any monetary judgment or penalty ultimately imposed against him for such conduct and will provide representation in congressional investigations.

"It would be unfair to prosecute dedicated men and women working to protect America for conduct that was sanctioned in advance by the Justice Department," Holder said.

After reviewing these opinions, OLC has decided to withdraw them: They no longer represent the views of the Office of Legal Counsel.

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Topics: Barack Obama, Justice Department, Torture

Torture

Greenwald On Torture Memos: These Aren't Intel Docs, They're Legal Docs

Zachary Roth | April 16, 2009, 2:16PM

A great point from Salon's Glenn Greenwald, to keep in mind as we wait for more information about the possible release of those torture memos:

I want to underscore one vital point about this controversy that is continuously overlooked and will be undoubtedly distorted today in the event of non-disclosure: these documents are not intelligence documents. They are legal documents and, more specifically, they constitute what can only be described as secret law under which the U.S. was governed during the Bush era. Thus, the question posed by the release of these OLC memos is not whether Obama will release to the public classified intelligence programs. The question is whether he will release to the public the legal doctrines under which the U.S. Government conducted itself regarding interrogation techniques he claims are no longer being used.

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Topics: Barack Obama, Justice Department, Torture

Torture

Report: Obama to Release Torture Memos

Zachary Roth | April 16, 2009, 2:02PM

The New York Times is reporting that the Obama administration has decided to release the "torture memos" written by the Bush Department of Justice, that justify harsh interrogation techniques.

It's not clear from the Times's unsourced report whether this is a compromise, in which only some of the memos will be released, or whether they all will.

Today is the deadline for the administration to weigh in on a lawsuit filed by the ACLU, which is seeking the memos.

We'll have more as things become clearer.

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Topics: Barack Obama, Justice Department, Torture

Rod Blagojevich

Judge: Blago Trial Won't Start For Two Years

Zachary Roth | April 16, 2009, 1:47PM

Those of you eager to see Blago getting his day in court may be waiting a long time.

At a hearing today, U.S. District Judge James B. Zagel said that the former Illinois governor's trial "will take six months, and likely will not begin for two years," reports CBS.

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Topics: Pat Fitzgerald, Rod Blagojevich

Bailout

Eilzabeth Warren On Daily Show

Zachary Roth | April 16, 2009, 1:01PM

Last night, Elizabeth Warren, the Harvard Law professor who chairs the Congressional Oversight Panel for the bailout, talked to Jon Stewart on the The Daily Show.

Here's part 1:

The Daily Show With Jon Stewart

M - Th 11p / 10c

Elizabeth Warren Pt. 1

thedailyshow.com

Daily Show
Full Episodes

Economic Crisis

Political Humor

And here's part 2:

The Daily Show With Jon Stewart

M - Th 11p / 10c

Elizabeth Warren Pt. 2

thedailyshow.com

Daily Show
Full Episodes

Economic Crisis

Political Humor

PERMALINK | COMMENTS (3) | RECOMMEND RECOMMEND (11)
Topics: Bailout, Elizabeth Warren, Financial Crisis, Wall Street

Russ Feingold

Feingold: NYT Report Shows We Need To Fix Wiretapping Laws

Zachary Roth | April 16, 2009, 11:06AM

Prompted by that New York Times report that the NSA "went beyond the broad legal limits established by Congress" in intercepting Americans' communications in recent months, Russ Feingold -- who has been the point man in the Senate for efforts to rein in warrantless wiretapping -- has released a statement :

Since 2001, I have spent a lot of time in the Intelligence Committee, the Judiciary Committee, and on the floor of the Senate bringing attention to both the possible and actual effects of legislation that has dangerously expanded the power of the executive branch to spy on innocent Americans. Despite these efforts, Congress insisted on enacting several measures including the USA PATRIOT Act, the Protect America Act, and the FISA Amendments Act, embarking on a tragic retreat from the principles that had governed the sensitive area of government surveillance for the previous three decades. Congress must get to work fixing these laws that have eroded the privacy and civil liberties of law-abiding citizens. In addition, the administration should declassify certain aspects of how these authorities have been used so that the American people can better understand their scope and impact.

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Topics: Barack Obama, Russ Feingold, Wiretapping

Wiretapping

Report: NSA Tried To Wiretap Member of Congress

Zachary Roth | April 16, 2009, 10:07AM

Check out this passage buried at the end of a pretty shocking New York Times report on out-of-control wiretapping by the National Security Agency:

And in one previously undisclosed episode, the N.S.A. tried to wiretap a member of Congress without a warrant, an intelligence official with direct knowledge of the matter said.
The agency believed that the congressman, whose identity could not be determined, was in contact -- as part of a Congressional delegation to the Middle East in 2005 or 2006 -- with an extremist who had possible terrorist ties and was already under surveillance, the official said. The agency then sought to eavesdrop on the congressman's conversations, the official said.

The official said the plan was ultimately blocked because of concerns from some intelligence officials about using the N.S.A., without court oversight, to spy on a member of Congress.

Who was this mystery congressman? Which "extremist" was he in contact with? And how does he feel about almost having been spied on by his own government?

Seems worth finding out...

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Topics: Barack Obama, Wiretapping

The Daily Muck

Ben Buchwalter | April 16, 2009, 9:13AM

U.S. Master Sergeant John Hatley murdered four Iraqi prisoners execution style, a military court ruled Wednesday. The eight-member panel said that after a 2007 firefight with a set of Iraqi insurgents, Hatley acted as "judge, jury and executioner" when he blindfolded the prisoners, shot them one after the other, and dumped their bodies in a nearby canal. Two soldiers in Hatley's unit were convicted in connection to the killings earlier this year and two pleaded guilty and were sentenced to jail last year. If convicted on all counts of premeditated murder and conspiracy to commit premeditated murder, Hatley could face life in prison. (AP)

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Topics: The Daily Muck

Larry Summers

Who Else Is Paying For Those Fat Wall Street Profits?

Moe Tkacik | April 15, 2009, 6:21PM

There's another big reason -- besides AIG -- that Wall Street trading desks have been booking such fat profits lately: fees they're collecting closing out interest rate swaps that have been exploding in the faces of cities, states, towns and public utilities over the past year.

Put another way: they're not just booking those billions soaking the government, they're booking them soaking...the government. Along with hospitals, utilities, park authorities, pretty much every other realm of the public or nonprofit sector...

Including Harvard! In December the university raised $2.5 billion dollars in a bond offering partially designed to give them the capital to buy out of $570 million in underwater interest rate swaps it had invested in back in 2005. The swaps were expressly endorsed by then-president Larry Summers, now head of the National Economic Council.

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Topics: Goldman Sachs, Larry Summers

JP Morgan

Dear Gina's MySpace Wall: I'm From JP Morgan, And I'm Here For Your Father's Car

Moe Tkacik | April 15, 2009, 4:13PM

Defaults on consumer loans have hit record levels, such that investment banks are bidding as low as 68 cents on the dollar for auto loan-backed securities. But if a lawsuit filed in Illinois Circuit Court can be believed, it's not for lack of trying to squeeze payments out of them. According to an Illinois resident and Mercedes driver named named James Ricobene, a collection agency hired by JP Morgan Chase went so far as to leave a threatening wall post on his daughter's MySpace page. (If this is her, she has since deleted it -- but she kept this appropriate photo of a car spray-painted with the words "HOPE SHE WAS WORTH IT.") According to the lawsuit, the message the collection agency allegedly posted on the daughter's MySpace page ("on or about March 20, 2009 at 3:25 p.m.") read as follows:

We have been retained by, JPMorgan Chase Bank, to locate and repossess their missing collateral a 2007 Mercedes GL 450. Please contact our office immediately so we can discuss the peaceful recovery of the collateral. Failure to contact me will result in further action against your father James Ricobene. Legal options range from having a replevin order served on you or even worse reporting the collateral as stolen to local authorities in Illinois under the A.R.S. act 18-5-504. Failure to comply with this notice of surrender is a class 5 felony and carries a maximum penalty of imprisonment for two years plus all applicable surcharges. You must contact the writer within 5 days to prevent this action from taking place. You can contact me directly at 800-667-7704 ext 222 or directly at 604-267-1581 ext. 222

Awaiting your immediate response.

Chris Flanagan
Senior investigator

Did he get a response!

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Topics: JP Morgan, Universal Tracing Services

Alaska

Justice Unit Being Probed For Contempt In Stevens Trial Brought Similar Case In 2006

Zachary Roth | April 15, 2009, 4:02PM

Are the Ted Stevens prosecutors in line to get a taste of their medicine?

As we've reported, six federal prosecutors from the Stevens case -- members of DOJ's Public Integrity unit, including its head, William Welch -- are now being investigated for knowingly withholding evidence, a potential criminal act.

Prosecutions for this offense -- known as a Brady violation -- are exceedingly rare. But it turns out that in 2006, an Assistant US Attorney was tried on the charge -- and acquitted amid allegations that his prosecution was over-zealous. In fact, the prosecutors who argued the case against the AUSA were with -- you guessed it -- the Public Integrity unit. And for part of that time, they were supervised by Welch himself. (For more on the Stevens Six, go here.)

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Topics: Alaska, Justice Department, Ted Stevens, William Welch

BlackRock

Goldman Claims Trading Profit Had Nothing To Do With AIG; BlackRock Bond Chief Calls BS

Moe Tkacik | April 15, 2009, 3:39PM

On Monday afternoon Goldman Sachs posted a miserable first quarter for most of its typical investment banking divisions -- and a record $6.56 billion in revenue for its trading unit, giving the bank a net profit nearly double Wall Street expectations. Mere seconds into the question and answer session of yesterday's conference call with analysts, Guy Moszkowski of Merrill Lynch asked the question on everyone's lips: what did the $180 billion money vortex called AIG have to do with those numbers? Nothing, insisted chief financial officer David Viniar, who said the impact of the unwind for the quarter "rounded to zero" and later professing to Bloomberg he was "mystified" over the public fascination with the question.

Was Viniar lying? Yesterday we explained how Goldman appeared to have booked the cash flow from the bailout in its "orphan month" of December, making Viniar possibly technically truthful. But then Peter Fisher, who heads fixed income trading for the hedge fund BlackRock, all but accused Viniar of flat-out lying. With the seen-everything tone one might expect of the longtime central banker Fortune once described as "one of those behind-the-scenes guys who keep Wall Street from coming apart at the seams," Fisher told Bloomberg Surveillance host Tom Keane in an audio segment uploaded by the blog ZeroHedge that Goldman, as
rumored, had reaped huge "one-off" profits on the AIG unwind.

"So," Keane asked sarcastically, "did [Goldman] make those trading gains by taking the hide out of BlackRock?" That got a laugh, so Keane pressed:

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Topics: AIG, BlackRock, David Viniar, Goldman Sachs, Peter Fisher

AIG

Source: SEC (Unlike DOJ) Cooperating With Congress's Request For AIG Docs

Zachary Roth | April 15, 2009, 12:17PM

Earlier this morning, we reported that the Justice Department is dragging its heels on a demand from Congress to hand over information compiled by a highly placed government monitor at AIG.

But DOJ's recalcitrance is underlined by the approach of the SEC, which was also asked to turn over the monitor's information. According to a source on the House Oversight committee, the SEC has said it's complying with the request, and is expected to turn over the information shortly.

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Topics: AIG, Edolphus Towns, Financial Crisis, House Oversight, Justice Department, Securities and Exchange Commission, Wall Street

Bradley Birkenfeld

Second Florida Yachting Exec Charged In UBS Tax Shelter Probe

Moe Tkacik | April 15, 2009, 12:07PM

Another rich client of UBS has been charged with using Swiss banking secrecy laws to evade taxes: it's Robert Moran, who failed to declare a $3.7 million account with the bank on his 2007 tax return.

Like Steven Michael Rubinstein, who earlier this month became the first UBS client charged in the investigation, Moran is a Florida yacht dealer charged with a single count of tax fraud. The Times specifies that the two are "not connected" except inasmuch as theirs were two of the 285 names the ailing Swiss bank, which today announced it would cut another 7,500 jobs after posting a $1.8 billion loss, handed over to the IRS earlier this year as part of a $780 million settlement into its tax evasion business.

Yachts were a "fertile recruiting ground" for UBS, according to Bradley Birkenfeld, the former UBS private banker whose "statement of facts" in the criminal probe of his role in the bank's tax evasion business provided the basis for much of the larger investigation. And Moran is a resident of Lighthouse Point, Florida -- also an address used by Birkenfeld's most famous client Igor Olenicoff, the billionaire real estate developer for whom Birkenfeld once laundered cash by traveling to the United States with a toothpaste tube full of diamonds. Birkenfeld's statement confesses to "numerous overt acts [of tax fraud] in Broward County," where both Rubinstein and Moran reside. Both men appear to be cooperating in the investigation.

So who boarded those fancy yachts, one of which can be chartered for the reasonable price of a million dollars a week plus expenses?

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Topics: Bradley Birkenfeld, Robert Moran, UBS

AIG

Justice Dragging Heels On Congress's Request For AIG Docs

Zachary Roth | April 15, 2009, 9:50AM

Last month, as we noted at the time, House Oversight committee chair Ed Towns formally asked the Justice Department for records kept by a government monitor, who since 2004 has had access to high-level internal deliberations at AIG.

But DOJ seems to be dragging its heels.

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Topics: AIG, Financial Crisis, Joseph Cassano, Justice Department, Wall Street

The Daily Muck

Ben Buchwalter | April 15, 2009, 9:21AM

Hours after filing for bankruptcy in a U.S. court, Bernard Madoff's London-based financial firm sued Peter Madoff -- the Ponzi schemer's brother, and employee -- for "unjust enrichment." The company also moved to seize Peter Madoff's assets, including a $200,000 Aston Martin car, which the company claims in court documents he purchased with company funds. This was the first action to seize the assets of Peter Madoff, who has not been charged with wrongdoing in connection to his brother's multi-billion dollar Ponzi scheme. Filing under Chapter 15 of the bankruptcy code, Madoff Securities International said they owed up to $1.5 billion in liquid funds and assets. This is part of a larger effort to liquidate Bernard Madoff's assets to repay victims of his massive Ponzi scheme. (Bloomberg)

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Topics:

AIG

AIG Responds On PR Expenses: We'll Give Congress What It Wants, And Then Some

Zachary Roth | April 15, 2009, 9:06AM

AIG has responded to the letter from Rep. Ed Towns requesting information about the company's PR expenses, that we first reported on yesterday -- and which has now been picked up by Reuters, Bloomberg, and ABC News, among others.

Here's the statement they sent us:

In more than 30 media appearances since the beginning of the year and elsewhere, Mr. Greenberg and his lawyers have made false and misleading statements about AIG, including his role in creating AIG Financial Products and its credit default swap business, as well as the circumstances surrounding his forced departure from AIG during an accounting fraud investigation. We look forward to providing Congressman Towns with background on why it has been necessary to correct these and other misstatements, which are both misleading to the American public and damaging to AIG and its ability to repay taxpayers.

This issue is not about AIG's corporate public relations expenditures, which are down sharply since last year. It is about correcting Mr. Greenberg's false and damaging statements.

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Topics: AIG, Bailout, Edolphus Towns, Financial Crisis, House Oversight, Wall Street

Jack Abramoff

Sweeney To Enter Rehab, Says Lawyer

Zachary Roth | April 14, 2009, 5:41PM

Eagle-eyed reader B.K. passes along this tidbit which we missed from late last week.

As we told you, former New York GOP congressman -- and Jack Abramoff buddy -- John Sweeney last week was charged with a felony DUI after he told officers who stopped his car that he was in "big trouble" and refused to take a roadside sobriety test. But later in the week, a local New York news channel reported that Sweeney's court appearance, scheduled for last Friday, had been postponed.

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Topics: Jack Abramoff, John Sweeney

Did Goldman Hide AIG Payout In The "Orphan Month" Of December?

Moe Tkacik | April 14, 2009, 2:35PM

Since it appeared near the top of the list of AIG's investment bank counterparties, investors -- and bloggers, and politicians, and anyone with an interest in the bailout -- have been eagerly awaiting the first quarter results of Goldman Sachs. Would the unwind, as rumored, be wholly responsible for a profitable quarter at the investment bank?

It's hard to say: the nature of accounting doesn't make it easy to determine these things. But what was interesting about the earnings numbers was the separate set of numbers for December 2008, which the bank dubbed an orphan month. Goldman changed its reporting schedule this year to follow a calendar year from a fiscal year that started in December. While this was initially reported as a sneaky losses-hiding tactic, Morgan Stanley did it too -- it's part of the emergency classification switch that changed the two investment banks into "bank holding companies" and enabled them to borrow cheaply from the Fed last September.

It looks like Goldman booked its big AIG payday during the "orphan month." This would dovetail with the chief financial officer's playing down of the AIG impact on its conference call this morning:

First of all, virtually all of those cash flows, which as you know were just cash flows, they had nothing to do with the P/L and in fact, most of them were value-for-value cash flows, most of those took place before the end of the year. The mane [sic: think this means Maiden Lane] lane transactions were unwound before the end of the year. I would say our P/L related to AIG in the first quarter rounded to zero.

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Topics:

Barack Obama

Biden Mum On State Secrets Bill He Once Supported

Zachary Roth | April 14, 2009, 2:15PM

Et tu, Joe?

Last year, while trying to win the Democratic nomination for president, Joe Biden co-sponsored a bill to restrict the use of the "state secrets privilege" by the Department of Justice. But today, asked by the Huffington Post for Biden's current stance on the legislation, a spokesman for the vice president replied: "No comment on this from here." That "no comment" follows a similar tight-lipped stance from the White House itself.

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Topics: Arlen Specter, Barack Obama, Joe Biden, Justice Department, Pat Leahy, State Secrets, Wiretapping

Alaska

Stevens Rejected No-Jail Plea Deal Last Summer

Zachary Roth | April 14, 2009, 1:40PM

You can say one thing for Ted Stevens -- he's got cojones.

Court records that were just unsealed show that the former Alaska senator last summer turned down a plea deal with prosecutors that would have resulted in no jail time.

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Topics: Alaska, Justice Department, Ted Stevens

AIG

Congress Probing AIG Spin Shop

Zachary Roth | April 14, 2009, 12:57PM

Congress is demanding information from AIG about reports that the bailed-out insurance giant has four PR firms on its payroll -- and about its recent PR blitz aimed at discrediting former CEO Hank Greenberg.

In a letter sent this morning to AIG chief Ed Liddy and obtained exclusively by TPMmuckraker, House Oversight committee chair Ed Towns requests detailed information on AIG's PR expenses, specifically mentioning Hill & Knowlton, and Mark Penn's Burson-Marsteller, two high-priced experts in Washington spin that have signed on to represent the firm.

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Topics: AIG, Bailout, Edolphus Towns, Financial Crisis, House Oversight, Wall Street

Bailout

SEC Reviewing Whether B of A Broke Law On Merrill Bonuses

Zachary Roth | April 14, 2009, 11:37AM

Ever since AIG's bonus shenanigans exploded onto the national scene last month, Merrill Lynch's own outrageous payouts have kind of gotten short shrift. We've felt this was unfair to the Thundering Herd, since at an around $3.6 billion, its bonuses dwarfed those of AIG. Granted, its role in bringing down the financial system may not have been quite as central as that of AIG's financial products unit, but it's not like Merrill, which needed rescuing last fall by Bank of America, was squeaky clean. Where's the respect?

But luckily, the Merrill bonuses are back. The SEC is looking at whether Bank of America broke the law by not disclosing, in filings last year, the fact that it was planning to pay those bonuses, reports the Washington Post.

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Topics: Bailout, Bank of America, Financial Crisis, Mary Schapiro, Merrill Lynch, Securities and Exchange Commission, Wall Street

The Daily Muck

Ben Buchwalter | April 14, 2009, 9:16AM

Former Illinois governor Rod Blagojevich will be arraigned today before a federal court after being indicted on 16 counts of racketeering conspiracy and wire fraud earlier this month. Blago is expected to plead not guilty to all the charges, which include allegations that he used pay-to-play politics to sell Barack Obama's vacant senate seat. The four other people charged, Blago's former chiefs of staff John Harris and Lon Monk, his top fundraiser Christopher Kelly and Illinois powerbroker William Cellini will be arraigned in the next ten days. (Chicago Tribune)

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Topics: The Daily Muck

Muncipal bonds

Another Faustian Swap: Indianapolis Water Authority Forced To Cough Up $100 Million-Plus

Moe Tkacik | April 13, 2009, 6:28PM

Another day, another group of American taxpayers forced to cough up tens of millions of dollars to Wall Street over a little-noticed provision in a "swap" contract gone sour. Last week we brought you the parallel tales of sudden budgetary meltdown in Tennessee, Alabama, Illinois, New Mexico and Philadelphia that in part prompted the credit rating agency Moody's to issue a blanket negative credit outlook on all bonds issued by American cities and towns. Today it's the Indianapolis Water Authority being screwed in a swap deal that might force the utility -- and by extension, its customers -- to cough up a collateral call of as much as $100 million.

The deal is a familiar one: in 2005 the city of Indianapolis refinanced $550 million in fixed-rate bonds to raise money to fund its acquisition of its old water company from the private utility company NiSource, which agreed to sell it as a condition of regulatory approval of its merger with Columbia Energy Group. The deal involved the ailing bond insurer MBIA as well as a similar German-Irish firm called Depfa Bank, which insure the utility's ability to pay up by writing credit default swaps on municipal bonds that protect investors in the event of default. But as Barney Frank pointed out last week, the risk of municipal bonds defaulting is historically minimal -- while the risk that MBIA and Depfa might default was steadily rising as they began to chase the riskier (AIG-dominated) business of writing swaps on collateralized debt obligations. And when those "insurers" started to see their credit downgraded last year, suddenly it was municipalities like Indianapolis that were swamped with calls demanding collateral -- which translates to a major refinancing being funded by an emergency 17.5% rate hike this summer.

If you're having trouble getting your head around how this works, it's a little like this: in order to get a cheaper interest rate on your mortgage, you pay you bank extra for a "swap" insuring the investors who buy the mortgage in the case of your default. But then the bank that originated the mortgage starts making riskier loans and its credit rating agencies downgrade its debt, it turns out the owner of your mortgage can demand collateral from you. Except in the case of municipal bonds, the homeowners are cities and towns with the legal authority to tax citizens and an infintessimal record of actually defaulting -- and the banks were using your interest payments to extend home loans to unemployed high school dropouts and senile 80-year-olds living on Social Security.

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Topics: Indianapolis Water Authority, MBIA Inc., Muncipal bonds, Municipal finance

Bob Ney

Ney's New Role? Right-Wing Radio Talk Show Host

Zachary Roth | April 13, 2009, 5:25PM

A second act for our old friend Bob Ney.

Starting today, the former Ohio GOP congressman will be hosting a midday chat show on a right-wing West Virginia radio station, WVLY AM 1370, according to the station's web site.

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Topics: Bob Ney, Jack Abramoff, Lobbyists, Media

Vito Fossella

Fossella Pleads Guilty To DUI

Zachary Roth | April 13, 2009, 3:59PM

Vito Fossella, the former GOP congressman from Staten Island, NY, has pleaded guilty to DUI charges, the Associated Press reports -- and according to his lawyer, the decision was prompted in part by the death of a Major League Baseball player last week.

Fossella was arrested May 1, 2008, and charged with driving while drunk. The arrest led to revelations that he had fathered a child as part of an extra-marital affair. He served out his term, but did not run for reelection this fall. He was convicted in October, but was appealing his conviction.

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Topics: Sex, Vito Fossella

Barack Obama

Obama Admin Fighting To Block Detainees From Challenging Detentions In Court

Zachary Roth | April 13, 2009, 2:58PM

On Friday, we reported the comments of a lawyer for four Gitmo detainees, who told us that, in his view, the Obama administration is continuing the Bushies' policy, by stonewalling efforts by detainees to appeal their detentions in federal courts.

And that same day, another data point emerged suggesting the new administration is taking a hard line on detainee policy.

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Topics: Barack Obama, Detainees, Guantanamo, Justice Department

Bernard Madoff

WaPo's Kurtz Takes No Position On NYT's Merkin/Madoff Op-Ed

Zachary Roth | April 13, 2009, 1:30PM

One final note on the great New York Times Merkin/Madoff op-ed disclosure brouhaha, which we've written about here and here.

The Washington Post's Howard Kurtz covered the controversy in today's column. Here's the entirety of what he wrote:

When the New York Times published a March 21 op-ed column sympathetic to a "quintessential nice guy" -- stock swindler Bernie Madoff -- contributing writer Daphne Merkin noted that she had "a sibling who did business with him."

That turned out to be J. Ezra Merkin, former chairman of GMAC, now accused by New York authorities of defrauding clients by funneling more than $2 billion of their money to Madoff. Was the vague "sibling" reference really enough?

Ombudsman Clark Hoyt wrote yesterday that many readers thought "the disclosure was so limited as to be disingenuous," but Op-Ed Editor David Shipley defended it, saying that paper approached Merkin "in some respect because of her brother."

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Topics: Bernard Madoff, Financial Crisis, Media, Wall Street

Bernard Madoff

Report: Shana Madoff Contacted Prison Consultant

Zachary Roth | April 13, 2009, 12:05PM

A female relative of Bernard Madoff -- identified by the New York Post as Madoff's niece, Shana Madoff -- called a "federal prison consultant" to ask how much jail time she might be facing, the consultant told TPMmuckraker.

Larry Levine -- a former federal prisoner who now runs a company, Wall Street Prison Consultants, that gives advice to future inmates on how to survive prison time and win an early release -- said that a woman had called him about three weeks ago, saying that she might face conspiracy charges. At first, said Levine, the woman was hesitant to divulge any specific information, but, when pressed by Levine, said that she was a relative of Bernard Madoff, explained the basics of her situation, and asked how much jail time she might be facing. "No money changed hands," said Levine, describing the call as "exploratory".

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Topics: Bernard Madoff, Securities and Exchange Commission, Wall Street

AIG

AIG FP Chief: Taxpayer Ire Over Bonuses "Probably Hurt Taxpayers"

Moe Tkacik | April 13, 2009, 11:25AM

Last month AIG Financial Products head Gerry "Che" Pasciucco met with employees of the unit that took down the economy, and relayed a request from upper management that they return those controversial "retention bonuses," adding that he felt the request was tantamount to blackmail. But he was only thinking of us taxpayers, he tells today's Wall Street Journal, in a story that says 20 AIG FP employees -- not including the unashamed bonus keeper Jake DeSantis, who published his resignation letter in the New York Times -- had quit amid the controversy:

Mr. Pasciucco said that as a result of the bonus controversy, some employees' children were harassed, and some had clubs ask them to resign. "It doesn't surprise me that some senior people said, 'You know what, I've had enough,' " he said...Mr. Pasciucco says the controversy "hurt morale" and "stunned people such that our wind-down has slowed down." He added, "Taxpayers probably have been damaged."

But will we ever know how much we've been damaged? A Financial Times story about AIG FP's decision to "opt out" of a new International Swaps & Derivatives Association protocol signed by 2,000 derivatives market participant intended to to make the complex credit default swap business less "opaque" casts more doubt on that:

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Topics: AIG

Barack Obama

White House Won't Say Whether It'll Back Effort To Roll Back State Secrets Privilege

Zachary Roth | April 13, 2009, 9:51AM

A good advance on the state secrets story, from Greg Sargent over at the Plum Line.

Greg reports that the White House declined to tell him whether it would support a Democratic effort to roll back the use of the state secrets privilege.

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Topics: Barack Obama, Hillary Clinton, Joe Biden, Justice Department, Pat Leahy, State Secrets

The Daily Muck

Ben Buchwalter | April 13, 2009, 9:23AM

Neil Barofsky, the special inspector-general assigned to oversee the deployment of TARP funds, will begin to investigate more forcefully whether banks manipulated their books to receive more government assistance. Barofsky told the Financial Times, "I hope we don't find a single bank that's cooked their books to try to get money but I don't think that's going to be the case." At a congressional hearing earlier this month, Barofsky said that his office was involved in up to a dozen investigations into potential wrongdoing. He told the Financial Times that the system for deploying bailout funds was easily manipulated. "Indictments can serve as great deterrents," he said. (Financial Times)

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Topics: The Daily Muck

Bernard Madoff

NYT Public Editor: It's "Obvious" There Should Have Been "A Lot More" Disclosure On Merkin-Madoff Op-Ed

Zachary Roth | April 12, 2009, 1:17PM

Andrew Rosenthal, the editor of the New York Times editorial page, may not think the issue of disclosure in Daphne Merkin's op-ed about Bernard Madoff is "substantive". But it looks like the paper's public editor disagrees.

To explain: Last month, the Times published an op-ed by Daphne Merkin, a contributing writer to the Times Magazine, in which she argued that Madoff's victims weren't really victims because "no one was holding a gun to anyone's head."