TPMMuckraker
April 26, 2009 - May 2, 2009

Cuomo Subpoenas 100 Hedge Funds, Enlists 36 States In Mushrooming Pension Probe

Moe Tkacik | May 1, 2009, 5:42PM

What did we tell you? The New York state pension fund scandal is starting to look pretty national. New York AG Andrew Cuomo just issued 100 subpoenas to investment firms in his expanding investigation of pay-to-play schemes that defraud public employee retirement funds, and announced the participation of 100 officials in 36 states' attorney general offices in the probe.

Who are the 14 holdouts? We suspect they're states that already regulate placement agents or ban them altogether, as New York did last week.

PERMALINK | COMMENTS (6) | RECOMMEND RECOMMEND (13)
Topics: Andrew Cuomo

Marc Correra

Marc Correra: The Link Between New York's Pension Scandal And "Toxic Waste" In New Mexico?

Moe Tkacik | May 1, 2009, 4:59PM

Three weeks ago we told you about accusations that the New Mexico State Investment Council had been under political pressure to invest teachers' retirement funds in risky investments like a $90 million "toxic waste" CDO backed by subprime mortgages -- and wondered if any of the other intensifying corruption investigations across the country might involve some of the same pay-for-players.

Sure enough, a few names emerged last week to link the New Mexico pension fund scandal to the alleged conspiracy to defraud the New York general pension fund under investigation by the state attorney general's office. One was Obama car czar Steve Rattner, who paid alleged ringleader Hank Morris more than a million dollars for securing investments in both states' pension funds. Morris was indicted in March for collecting $30 million in fraudulent "finder's fees" as a top adviser to the former state comptroller Alan Hevesi, in collusion with the pension fund's manager David Loglisci. But the indictment didn't address Morris's "placement" services in other states; his name turned up on a list of placement agents released by the New Mexico State Investment Council as the broker of a $20 million investment in Rattner's private equity firm Quadrangle.

The other thread running through both the New York and New Mexico pension funds was the advisory firm Aldus Equity, whose founder Saul Meyer was charged yesterday with participating in the New York conspiracy and which also until this week advised similar investments in New Mexico.

The further we looked, the wider and farther-back the suspicions of public pension fund pay-to-play seemed to extend, as Cuomo noted himself at yesterday's press conference:

PERMALINK | COMMENTS (6) | RECOMMEND RECOMMEND (17)
Topics: Aldus Equity, Bill Richardson, Dan Weinstein, Jerry Cremins, Marc Correra, pension scandals

AIPAC

Who Are The Gosslings?

Zachary Roth | May 1, 2009, 3:50PM

In recent days, speculation about who leaked to CQ the news about Jane Harman's wiretapped conversation with a suspected Israel agent has seemed to focus on former CIA director Porter Goss -- or, more precisely, the group of Goss aides known as the Gosslings.

So we thought it was worth taking a closer look at this crew. And it looks like they have quite a reputation...

PERMALINK | COMMENTS (17) | RECOMMEND RECOMMEND (9)
Topics: AIPAC, CIA, Jane Harman, Porter Goss, Wiretapping

Michael Steele

RNC: Steele Spent $18,500 To Redecorate Office

Zachary Roth | May 1, 2009, 1:50PM

OK, it's small potatoes compared to John Thain's legendary $1.2 million redecoration of his Merill Lynch office suite. But still: in these cash-strapped times, we're wondering how RNC members feel about Michael Steele's decision to spend $18,500 on his own quarters.

Check out this nugget, from a Politico story about rancor between Steele and the committee members:

PERMALINK | COMMENTS (7) | RECOMMEND RECOMMEND (7)
Topics: John Thain, Merrill Lynch, Michael Steele, Republican National Committee

Psychotic Debt Collectors

The "Fatal Attraction" Method Of Debt Collection

Moe Tkacik | May 1, 2009, 12:18PM

Remember James Ricobene, the suburban Chicago man who fell behind on his Mercedes payments and found a threatening wall post on his daughter's MySpace page a few weeks later? Yeah, we thought that was bad, but some of you had much worse tales from the collection agency annals.

But the tale of Phoenix's Jennifer Dicks and her delinquent Chevy Cavalier is so beyond we fully expect Lifetime to option the story for a film. Last year Dicks (allegedly) bought a Chevy Cavalier with a loan from the Auto Financing Network, a local auto loan company that claims to approve 100% of applicants for loans. AFN's website claims its Top 3 Priorities of 2008 are #1 Treat Customer Right #2 Treat Customer Right #3 Treat Customer Right.

A new motto for 2009 might be in order. ("Treat Customer Like Psycho Ex-Girlfriend"?) In a lawsuit filed against the company in an Arizona superior court Dicks claims the collection agency went so far as to buy the url that matches her name and create a "Jennifer Dicks isn't paying for her Cavalier!" website.

PERMALINK | COMMENTS (66) | RECOMMEND RECOMMEND (48)
Topics: Psychotic Debt Collectors

AIG

AIG Sets Date For Liddy Testimony -- But Only Under Threat Of Subpoena

Zachary Roth | May 1, 2009, 11:45AM

AIG and the House Oversight committee have agreed to a date, May 13, on which the firm's CEO, Ed Liddy, will testify before the committee. But it looks like Liddy will be going to Washington kicking and screaming.

As we noted earlier this week, the committee invited Liddy to testify May 6, and told us that it expected to see him then. But today the Wall Street Journal reports (sub. req.) that that day "was scrapped because AIG is due to report its results for the first quarter the following day."

PERMALINK | COMMENTS (0) | RECOMMEND RECOMMEND (1)
Topics: AIG, Bailout, Ed Liddy, Financial Crisis, House Oversight, Wall Street

Allen Stanford

Stanford To Feds: Take Me Now. Please?

Zachary Roth | May 1, 2009, 11:07AM

Doesn't anyone want Allen Stanford?

The accused Ponzi schemer tried to turn himself in to the Feds yesterday -- without success.

Over to the Houston Chronicle:

PERMALINK | COMMENTS (0) | RECOMMEND RECOMMEND (6)
Topics: Allen Stanford, Securities and Exchange Commission

Swine Flu

Swine Flu: Clearing Up The Numbers

Zachary Roth | May 1, 2009, 10:25AM

As we try to figure out just how concerned to be about swine flu (yeah, we're still calling it that, even if Obama won't), the key indicator we're all looking at is the scale of the outbreak in Mexico, where all this appears to have begun (though that's no longer certain (sub. req.)).

But the Mexican government has used several different metrics to gauge that question. And the numbers, of course, have been been constantly shifting in the last few days as the situation changes. So we thought we'd try to clear up the confusion by briefly laying out what the different numbers are, and what they mean.

PERMALINK | COMMENTS (30) | RECOMMEND RECOMMEND (7)
Topics: Barack Obama, Swine Flu

AIPAC

Report: AIPAC Case Dropped

Zachary Roth | May 1, 2009, 9:51AM

The AIPAC case -- which provided the backdrop for the current flap over Jane Harman's wiretapped conversation -- has been dropped, reports the Jewish Telegraphic Agency:

A source with intimate knowledge of the case against two ex-AIPAC staffers accused of passing along classified information says the case has been dropped.
Keith Weissman, the American Israel Public Affairs Committee's former Iran analyst, and Steve Rosen, its former foreign policy chief, were charged under a rarely used section of the 1917 Espionage Act that makes it a crime for civilians to receive and distribute closely held defense information. Both men were later dismissed by AIPAC, with the organization claiming the two had violated its rules; Rosen, in turn has filed a multi-million dollar lawsuit against AIPAC.

Federal prosecutors reportedly had been considering dropping the criminal case in the wake of a number of recent judicial decisions that make the prosecution more difficult. Among these was an appeals court rejection of a prosecution request to review the trial judge's order that prosecutors make the case that the defendants harmed the United States and not merely benefited Israel. Some Democrats see the case as a piece with Bush-era efforts to expand government secrecy powers, but the Post quoted its sources as saying that the review would have occurred whether or not Barack Obama had won election as president.

More on this and its significance in a little while...

PERMALINK | COMMENTS (14) | RECOMMEND RECOMMEND (10)
Topics: AIPAC, Jane Harman, Wiretapping

AIPAC

Harman And Goss: "Not ... Good Friends"

Zachary Roth | April 30, 2009, 5:10PM

Building off our post from yesterday -- in which we noted the interesting timing of the original 2006 report about the investigation into Jane Harman's AIPAC ties -- Foreign Policy's Laura Rozen has put together, on her personal blog, what amounts to a complete theory of the case. And it's a theory that implicates the Porter Goss camp right from the start.

So we thought we'd follow that road a bit further. It's not news that Harman and Goss haven't exactly been best buds, either while Goss chaired the House intelligence committee and Harman was its ranking Democrat, or later when Goss led the CIA from 2004 to 2006.* One former intel committee staffer explained the relationship to TPMmuckraker this way: "Jane is an assertive person. And Porter struck me as someone who wanted to avoid conflict. I would not say they were good friends."

PERMALINK | COMMENTS (7) | RECOMMEND RECOMMEND (9)
Topics: AIPAC, CIA, George Bush, Jane Harman, Porter Goss, Wiretapping

Andrew Cuomo

Cuomo Charges Dallas Money Manager, Says NY Pension Scammers Are Part Of A "National Network"

Moe Tkacik | April 30, 2009, 4:00PM

New York AG Andrew Cuomo added a new name to the growing list of indictments in the New York Pension Fund scandal: Saul Meyer, the (youthful-looking) 38-year-old founder of the private equity fund Aldus Equity. Meyer won't be the last, Cuomo assured reporters at a press conference announcing the charges today:

"I believe we are disclosing a national network of actors who often acted in concert and did this all across the country," Mr. Cuomo said. "They collaborated, they often partnered and victimized states and taxpayers across the country. It's also an ongoing scam."

We said as much yesterday, when we showed you how a key figure in the pension scandals in New Mexico and New York was a direct descendant-in-law of a key figure in a California pension scam of the nineties. And we told you about Aldus, a key name linking the New York fraud to a suspected scheme to scam the teachers' retirement fund in New Mexico and possibly other public pension funds, last week.

Aldus's usual business was advising state pension funds on private equity investments. But it went a step further in New York, using its access to the pension's billions to arrange a $375 million investment to create its own private equity fund. The idea was hatched by Hank Morris, the top adviser to former state comptroller Alan Hevesi who is charged with defrauding the pension fund in a scheme to collect phony "finder's fees." According to the indictment, Aldus paid Morris about $320,000 to secure itself a $375 million investment from the pension fund. Not bad for a private equity firm that, according to this Dallas Business Journal puff profile that ran (all of) two months ago: "started in 2003 with no clients."

PERMALINK | COMMENTS (4) | RECOMMEND RECOMMEND (6)
Topics: Aldus Equity, All Muck is Local, Andrew Cuomo, Barrett Wissman, Bill Richardson, CalPERS, Calpers, Saul Meyer, Steve Rattner

Chrysler Before And After Chapter 11: What Changed?

Moe Tkacik | April 30, 2009, 1:56PM

So Chrysler is filing for Chaper 11 bankruptcy protection. But the terms of the "prepackaged" bankruptcy the government is proposing look...suspiciously exactly like the deal the Treasury was negotiating in hopes of averting bankruptcy.

Here's the difference: outside the bankruptcy process, secured creditors -- meaning holders of bonds secured by collateral like plants and machinery -- have to essentially give unanimous consent to any deals, because of the risk the deal would be threatened in court. Inside bankruptcy court, they only need half of the creditors representing more than two thirds of the dollar value of the loans to "cram down" a deal.

The Obama Administration, in a deal already accepted by the four big banks holding 70% of that secured debt, was offering $2 billion to those secured creditors -- a figure it raised last night to $2.25 billion.

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

AIPAC

Harman Releases Media Statement On Media Advisor

Zachary Roth | April 30, 2009, 9:58AM

We wondered yesterday whether Lanny Davis, who was just hired by Jane Harman as a "media advisor" to deal with the AIPAC flap, was behind her very aggressive effort to show that her sense of humor is intact.

And it looks like we weren't the only people with questions about Lanny's role.

PERMALINK | COMMENTS (4) | RECOMMEND RECOMMEND (3)
Topics: AIPAC, Jane Harman, Lanny Davis, Wiretapping

The Daily Muck

Ben Buchwalter | April 30, 2009, 9:23AM

Attorney General Eric Holder said Wednesday that the U.S. has identified 30 Guantanamo detainees to be released and will ask allies to take the former suspected terrorists within the next few weeks. Holder made the announcement in Berlin, Germany, a country which has so far declined to say whether it will take released detainees. Other European countries, including Britain, France and Portugal, have signaled that they will consider taking former Gitmo detainees to assist in President Obama's stated goal to close the controversial military prison within the year. (Reuters)

PERMALINK | COMMENTS (3) | RECOMMEND RECOMMEND (6)
Topics: The Daily Muck

Jack Abramoff

Casting Call for Casino Jack

Lila Shapiro | April 30, 2009, 9:02AM

As Zack Roth reported on Monday, Kevin Spacey has signed on to play Jack Abramoff in the upcoming "modern day GoodFellas" type thriller Casino Jack.

As devoted mappers of Abramoff's twisted world, we wanted to give TPM readers a chance to share their dream cast lists. So we've put together a gallery of some of the key players. Leave your notes in the comments. The best suggestions will be incorporated into a glamorous Casino Jack: TPM Photo Feature.

Enter.

PERMALINK | COMMENTS (10) | RECOMMEND RECOMMEND (5)
Topics: Jack Abramoff

Ken Lewis

Ken Lewis Keeps Job At Bank Of America; Chrysler's Bob Nardelli Loses His To Italians And Unions

Moe Tkacik | April 29, 2009, 7:08PM

It's a bittersweet happy hour for Bank of America CEO Ken Lewis. As of a few minutes ago, he gets to keep one of his two jobs -- the one with all the work. At the bank's annual meeting today shareholders voted by a razor-thin margin to keep Lewis in the CEO post and sack him as chairman. Walter Massey, a director at the bank and the president of Morehouse College, will replace him in the latter position. Lewis kept his job by a 50.3% vote in part on his strength among brokers who vote on behalf of their clients, bucking calls for reform by a formidable minority including one shareholder who referenced Psalm 83 at today's meeting.

But one name on the Endangered Executives list moved closer to gilded retirement today, according Washington Post report that the Treasury Department is hammering out a bankruptcy plan for the automaker that would replace CEO Bob Nardelli with the management of the Italian auto company Fiat and hand over majority ownership to the company's retirement fund, in exchange for the union's agreement to cut in half the $10 billion it is owed by the company. Chrysler sales were down 39% in March from the year earlier, as compared with 35% at GM, whose CEO Rick Wagoner was asked by the Obama Administration down last month. It's about time: while Lewis and Wagoner both had/have broad bases of support, Nardelli, who pulled down a high nine figure pay package while slashing veteran workers as CEO of Home Depot, doesn't appear to have much at all.

PERMALINK | COMMENTS (1) | RECOMMEND RECOMMEND (1)
Topics: Bob Nardelli, Ken Lewis

AIPAC

Evidence Growing That Goss Camp Is Behind Harman Leak?

Zachary Roth | April 29, 2009, 5:18PM

There seems to be an emerging consensus among smart people covering the Jane-Harman/AIPAC case that the sources for CQ's original report -- which revealed that Rep. Harman had been heard on a wiretap discussing a quid pro quo with a suspected Israeli agent -- were aligned with Porter Goss, the former CIA director.

And here's some more evidence pointing in that direction:

PERMALINK | COMMENTS (5) | RECOMMEND RECOMMEND (10)
Topics: AIPAC, CIA, Jane Harman, Porter Goss, Wiretapping

George Will

Hiatt: George Will's Critics Are "Trying To Shut Him Down"

Zachary Roth | April 29, 2009, 4:30PM

Fred Hiatt has waded back into the debate over George Will's global warming distortions -- a debate that only makes Hiatt look more out of touch than ever.

During an online chat with readers that was supposed to be about President Obama's first 100 days, Hiatt, the editor of the Washington Post's editorial page, had the following exchange with a reader:

PERMALINK | COMMENTS (31) | RECOMMEND RECOMMEND (27)
Topics: George Will, Global Warming, Media

CDR

The Pension Scandals: Six Degrees Of How "Toxic Waste" Lands In Teachers' Retirement Funds

Moe Tkacik | April 29, 2009, 3:31PM

LATE UPDATE: An earlier version of this post misidentified New Mexico State Investment Council portfolio manager Kay Chippeaux as being Frank Foy's replacement; Foy had held various titles including chief investment officer at the state's Education Retirement Board.

In June 1997 Tom Flanigan, the chief investment officer of the California State Teachers Retirement System, wrote a letter to his old mentor, then-SEC chief Arthur Levitt. He was under political pressure, he said, to gamble with teachers' savings. The state comptroller was demanding he allocate a bigger portion of the fund to venture capital firms and hedge funds in what he thought to be an overheated market.

Meanwhile, hedge funds and private equity firms were hiring politically connected "placement agents" to descend upon his board of directors, who had final approval over his investment decisions. He had just watched the Texas investment firm Hicks, Muse, Tate and Furst secure a $100 million investment from the state employees' general retirement fund CalPERS after paying a $750,000 "finders fee" to a former board member and longtime Los Angeles politico named Alfred Villalobos. Villalobos had a questionable history with Hicks -- as a board member he'd already approved another $100 million investment in the firm on the advice of the fund's paid adviser Chris Bower. Nine months later, Bower sold his two-year-old yacht to Hicks founder Tom Hicks for a $45,000 profit. And there was other smoke around the deal, if no clear fire: Villalobo, for one had just filed for personal bankruptcy over gambling debts. And the board had initially rejected the deal -- when another LA politico on the board, a labor leader named Jerry Cremins, changed their minds. There was something "unseemly if not unethical" going on, Flanigan wrote. The SEC proposed rules regulating the placement agencies.

A few months later, Flanigan was sacked.

PERMALINK | COMMENTS (9) | RECOMMEND RECOMMEND (24)
Topics: Bill Richardson, CDR, Calpers, pension scandals

AIPAC

Harman: In Case You Missed It The First Time, My Sense Of Humor Is Still Intact

Zachary Roth | April 29, 2009, 2:44PM

I think we get the message ...

Following up on yesterday's rib-splitting news that Jane Harman's team for the Capital Challenge Road Race has been named "Tapped Out", Harman's office is now looking to make more headlines on the subject. Earlier this afternoon, it sent a press release reading:

PERMALINK | COMMENTS (0) | RECOMMEND RECOMMEND (2)
Topics: AIPAC, Jane Harman, Lanny Davis, Wiretapping

Pat Leahy

Leahy to Bybee: Why Not Give Us Your Side Of Torture Story?

Zachary Roth | April 29, 2009, 1:49PM

As the calls for his impeachment grow louder, Jay Bybee -- the Bush OLC lawyer who wrote one of the torture memos, and who is now a federal judge -- has been given the chance to share his side of the story.

The unlikely invitation comes from Pat Leahy, the chair of the Senate Judiciary committee. In a letter sent to Bybee today, Leahy invites him to testify before the committee about his role in writing the memos.

PERMALINK | COMMENTS (9) | RECOMMEND RECOMMEND (9)
Topics: George Bush, Jay Bybee, Justice Department, Pat Leahy, Senate Judiciary Committee, Torture

Ken Lewis

The Campaign To Oust Bank Of America CEO Ken Lewis: But How Would Jesus Vote?

Moe Tkacik | April 29, 2009, 1:16PM

We feel a bit better about our own conflicted feelings about Bank of America's embattled CEO (and happy hour enthusiast) Ken Lewis after reading the Charlotte Observer's live Twitter feed of the bank's annual meeting. Dozens of shareholders are currently giving short speeches for and against ousting him today, and it is clear the bank's owners divided as well. The quintessential annual meeting muckraker Evelyn Y. Davis (the quintessential Evelyn Y. Davis profile is here) just spoke -- and she gave Lewis her full support.

As we noted earlier, the movement to oust Lewis has made bedfellows of MoveOn.org and McCain donors, and the camp that wants to let him stay is equally diverse. Davis, Habitat For Humanity, and the widely-worshiped bank analyst Meredith Whitney are all on Lewis' side. So who did John Moore, the sole shareholder thus far to be reported quoting the Bible, support?

PERMALINK | COMMENTS (3) | RECOMMEND RECOMMEND (1)
Topics: Ken Lewis

AIG

Feds Zeroing In On Cassano's Valuation Of Credit Default Swaps

Zachary Roth | April 29, 2009, 12:40PM

Yesterday we told you that federal investigators are now zeroing in on two other AIG staffers, in addition to Joseph Cassano, as part of their probe into potential criminal wrongdoing at AIG. But a report (sub. req.) in the Wall Street Journal, which confirmed that information, also began to flesh out the more interesting question of just what the Feds suspect Cassano and his crew may have done wrong.

We knew that that December 2007 presentation, at which Cassano and others reassured investors that everything was basically fine, was drawing particular scrutiny from investigators. But the Journal adds some meat to that bone.

PERMALINK | COMMENTS (0) | RECOMMEND RECOMMEND (5)
Topics: AIG, Financial Crisis, Joseph Cassano, Martin Sullivan, Wall Street

Hillary Clinton

Hillary Clinton Rents Out Donor List To... Hillary Clinton

Moe Tkacik | April 29, 2009, 12:20PM

Here's a cool way to get out of debt most Americans probably wish they had as an option: Hillary Clinton's presidential campaign made $2.5 million this year renting out its list of supporters to Hillary Clinton's campaign for Senate, the Wall Street Journal reports today, following up on last week's Politico item. That's enough to pay back the $2.3 million the campaign still owes to her campaign strategist Mark Penn.

Clinton's now-dormant political action committee, Hill PAC, also paid $822,000 to rent the list, and the William J. Clinton Foundation paid "more than $274,000" to rent the list. Why the sweetheart deal for her husband? Maybe it wasn't as valuable to an entity that already has a 2,922-page list of its own. The campaign tells the Journal the prices were set by outside appraisers. It made another $1 million renting out the list to 18 other customers, which paid an average of $50,000 apiece.

The significance of this, apart from "campaign finance is complicated," according to the Journal, is that Hillary is "holding onto" the list in "part of a plan that looks to retain an element of [her] political operation while she serves as secretary of state."

PERMALINK | COMMENTS (5) | RECOMMEND RECOMMEND (2)
Topics: Hillary Clinton

Jane Harman

Harman Hires Lanny Davis As Spin-Meister

Zachary Roth | April 29, 2009, 11:27AM

Jane Harman has hired Lanny Davis as a "media adviser" to help her deal with the fallout from the AIPAC story, reports Laura Rozen at Foreign Policy.

Hiring Davis suggests Harman -- who embarked on a media blitz last week, without perfect success, in response to the affair -- isn't so worried about the perception that she's too close to the Israel lobby. Davis -- who was special counsel to President Clinton during the Lewinsky saga, and an indefatigable spinner for Hillary Clinton's presidential campaign -- has long been a supporter of AIPAC, and serves as an adviser and spokesman for the Israel Project, a hawkish, pro-Israel group. He also, for good measure, appears regularly on Fox News.

PERMALINK | COMMENTS (9) | RECOMMEND RECOMMEND (6)
Topics: AIPAC, CIA, Jane Harman, Lanny Davis, Porter Goss, Robert Mueller, Wiretapping

AIPAC

Daily Show On Harman-AIPAC

Zachary Roth | April 29, 2009, 10:45AM

Jon Stewart had a good segment last night on the convoluted Jane-Harman/AIPAC affair, which brought out both the byzantine nature of the saga, and the ultimate fact that nothing much came of any of the scheming: Harman didn't get the intel job, the AIPAC guys didn't get off, and Haim Saban didn't withhold money from Democrats.

As Stewart put it: "Your government, not at work."

Watch:

The Daily Show With Jon Stewart

M - Th 11p / 10c

Your Government Not at Work - Jane Harman Scandal

thedailyshow.com

Daily Show
Full Episodes

Economic Crisis

First 100 Days

PERMALINK | COMMENTS (8) | RECOMMEND RECOMMEND (21)
Topics: AIPAC, Jane Harman, Wiretapping

The Daily Muck

Ben Buchwalter | April 29, 2009, 9:39AM

A report released Tuesday by the California attorney general details the history of abuse that permeated a small police department near Los Angeles. The report states that the Maywood Police Department was rife with sexual innuendo, racial profiling, and violence against suspects. One account alleges that officers Tasered a handcuffed man and his father while beating another man in the same room. AG Jerry Brown said the state would work to reform the department because "when you have rogue cops, it's just intolerable in a free society." (AP)

PERMALINK | COMMENTS (0) | RECOMMEND RECOMMEND (5)
Topics:

AIG

AIG's Sullivan: "Highly Unlikely" We'll Have To Pay Out On Credit Default Swaps

Zachary Roth | April 28, 2009, 6:22PM

We took another quick look at that press release that AIG released in November 2007 about its third quarter earnings -- which is now reportedly being looked at by federal investigators as evidence that the firm may have deliberately misled investors.

And here's one line that jumps out. The release quotes CEO Martin Sullivan saying:

AIGFP reported an operating loss in the quarter due principally to the unrealized market valuation loss related to its super senior credit default swap portfolio. Although GAAP requires that AIG recognize changes in valuation for these derivatives, AIG continues to believe that it is highly unlikely that AIGFP will be required to make any payments with respect to these derivatives. (our itals)

PERMALINK | COMMENTS (2) | RECOMMEND RECOMMEND (1)
Topics: AIG, Financial Crisis, Martin Sullivan, Wall Street

John Conyers

Conyers And Nadler To Holder: We Need Special Torture Prosecutor

Zachary Roth | April 28, 2009, 4:52PM

Reps. John Conyers and Jerry Nadler want a special prosecutor to investigate whether Bush administration officials committed crimes in ordering and justifying torture policies.

In a just-released letter to Attorney General Eric Holder, the Democratic lawmakers write:

The authorization and use of interrogation techniques that likely amounted to torture has generated concern and outrage in this country, and has harmed our legal and moral standing in the world. As a country committed to the rule of law, we must investigate and demand accountability for acts of torture committed by or own our behalf (sic). Appointing a special counsel to undertake this task would serve the interests of the department and of the public in ensuring that the necessary investigation is through and impartial, and that the United States fairly investigates serious and credible accusations of misconduct, even where high-ranking government officials may be involved.

PERMALINK | COMMENTS (7) | RECOMMEND RECOMMEND (7)
Topics: Barack Obama, House Judiciary, Jerrold Nadler, John Conyers, Torture

Jane Harman

Harman: Despite AIPAC Flap, I Can Still Make Lame Puns

Zachary Roth | April 28, 2009, 4:23PM

It's all in good fun -- but is an alleged quid pro quo with a suspected Israeli agent really a laughing matter?

CQ reports that Jane Harman's office plans to compete in a road race tomorrow, sponsored by the American Council of Life Insurers. The Harman team's name: "Tapped Out."

PERMALINK | COMMENTS (3) | RECOMMEND RECOMMEND (1)
Topics: AIPAC, Jane Harman, Wiretapping

Barack Obama

Court Rejects Obama Admin's State Secrets Claim

Zachary Roth | April 28, 2009, 2:29PM

A court has rejected the Obama administration's claim of the state secret privilege.

Via the blog Legal Pad: A three-member panel of the 9th circuit Court of Appeals ruled this morning on a request from the government that it dismiss the Jeppesen case, which focuses on the CIA's extraordinary rendition program.

PERMALINK | COMMENTS (22) | RECOMMEND RECOMMEND (15)
Topics: Barack Obama, CIA, George Bush, Justice Department, State Secrets, Wiretapping

AIG

Report: Feds Probing Two Cassano Deputies

Zachary Roth | April 28, 2009, 1:02PM

CBS News has some new developments in the criminal probe into AIG...

We knew that Joe Cassano, the former head of AIG's Financial Products unit, was in investigators' crosshairs for potentially giving misleading public statements about AIGFP's position. But the network now reports that the Justice Department is also looking closely at two of his deputies -- Andrew Forster, an executive vice president, and Thomas Athan, a managing director -- for the same reason.

PERMALINK | COMMENTS (0) | RECOMMEND RECOMMEND (5)
Topics: AIG, Financial Crisis, Joseph Cassano, Justice Department, Wall Street

AIG

Congress To DOJ And SEC: Hand Over AIG Docs Or We'll Subpoena Them

Zachary Roth | April 28, 2009, 10:21AM

Congress is upping the ante in its bid to get access to those insider reports on AIG compiled by a government monitor.

House Oversight chair Ed Towns, joined by ranking GOPer Darrell Issa, yesterday sent letters to the Justice Department and the SEC, threatening them with subpoenas if they don't hand over the information by this Thursday*.

PERMALINK | COMMENTS (3) | RECOMMEND RECOMMEND (4)
Topics: AIG, Bailout, Edolphus Towns, Financial Crisis, House Oversight, Justice Department, Securities and Exchange Commission, Wall Street

The Daily Muck

Ben Buchwalter | April 28, 2009, 9:25AM

A federal judge sentenced former Orange County sheriff Michael Carona to five and a half years in prison for attempting to obstruct a grand jury investigation. Carona was convicted in January for asking an assistant Sheriff to lie to a grand jury investigating Carona for using his office to attract cash and gifts for his wife and mistress. In a half-hour lecture during the sentencing, Judge Andrew Guilford told Corona that "lying will not be tolerated in this courtroom, especially by the county's highest-ranking law enforcement officer." Carona was once named "America's Sheriff" by CNN's Larry King for spearheading the investigation into the murder of a five year old girl. (LA Times)

PERMALINK | COMMENTS (0) | RECOMMEND RECOMMEND (10)
Topics: The Daily Muck

Tim Geithner

Dissecting Tim Geithner's 658-Page Schedule

Moe Tkacik | April 27, 2009, 6:27PM

As Treasury Secretary, Tim Geithner's public image has generally seemed "not quite ready for prime time." But his PR acumen as president of the New York Fed was in large part credited for landing him the job -- and now we know why. Geithner made one-on-one coffee dates, luncheons, tennis games, dinners and conference calls with reporters a major part of his job at the New York Fed, from the looks of the official schedule posted this morning by the New York Times. In addition to regular press briefings, backgrounders and whatever Geithner slipped in on his own time, Geithner scheduled one-on-one time for more than 68 journalists from 2007 to 2008, including twelve from the New York Times, ten from the Wall Street Journal and eight from the Financial Times. His favorite journalist by far appears to be Krishna Guha, an editorial page writer at the Financial Times, to whom he granted 12 interviews.

The Journal's Jon Hilsenrath and David Wessel, the FT's Gillian Tett and Chrystia Freedland and House of Cards author William Cohan also make a lot of appearances on Geithner's schedule, in addition to professional pundits Fareed Zakariah and Tom Friedman. What's particularly striking about Geithner's media schedule is how willing he seemed to be to speak individually with multiple reporters from the same media outlet: some days he would speak separately with three different FT journalists. As the Times has pointed out, Geithner wasn't necessarily satisfied with his press; the schedule shows three meetings with a publicist who represents Citigroup, and a few others with New York PR patriarch Howard Rubenstein.

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Topics: Tim Geithner

AIPAC

Did Goss Target Harman?

Zachary Roth | April 27, 2009, 5:33PM

In our last post on the Jane-Harman/AIPAC story, we noted growing evidence that Bush administration officials worked aggressively to prevent Congress from learning about Harman's wiretapped conversation with that suspected Israeli agent. But Ron Kampeas of the Jewish Telegraphic Agency had an (unfortunately titled) post late last week that took things in a very different, but equally interesting, direction.

Kampeas conducts a close reading of a New York Times report on the affair from last week to make a strong case that it was Porter Goss, then the CIA director, who took the initiative in going after Harman after hearing her on the wiretap, by trying to have authorized a separate wiretap of the lawmaker herself.

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Topics: AIPAC, CIA, Jane Harman, Porter Goss, Wiretapping

Jack Abramoff

Two Thumbs Up! Kevin Spacey To Play Abramoff in Casino Jack

Zachary Roth | April 27, 2009, 3:08PM

Get ready for Jack Abramoff: The Movie.

The well-sourced Hollywood blogger Nikki Finke reported Friday that Kevin Spacey and director George Hickenlooper were visiting the disgraced former lobbyist in prison -- as part of their research for Casino Jack, which will start filming next month, with the man who once played Keyser Soze in the lead role. (Variety had reported last August on plans for the project, then known as Bagman.)

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Topics: Jack Abramoff, Karl Rove, Lobbyists, Tom DeLay

Tim Geithner

The New, Amended Case Against Tim "Magical Thinking" Geithner

Moe Tkacik | April 27, 2009, 1:34PM

On the face of it, the lengthy Tim Geithner profile in today's New York Times is not quite as unflattering as last Friday's cover story in Portfolio -- but it's pretty close. Both perpetuate a slightly altered narrative about the Treasury Secretary: where earlier hit jobs depicted Geithner as a limp-wristed bureaucrat who took marching orders from the plutocrats who appointed him to head the New York Fed, the latest stories further the notion of Geithner as precocious, fundamentally unprepared child -- a sort of Sarah Palin of Clinton-anointed technocrats. A structured finance expert accuses him of "magical thinking" in the Times; Portfolio quotes Mike Barnicle's "eyes of a shoplifter" observation. "Think Bambi looking into the headlights on an 18-wheeler," says one economist of Geithner's fumbling through a question-and-answer session in 2006. "People thought, 'Whoa, that's kind of out there,'" says comptroller of the currency John C. Dugan of a short-lived proposal Geithner advanced last June to guarantee all bank debt. Management expert Peter Cohan suggests Geithner is flailing because he isn't very "good at math."

Between the lines of both stories, tough, are some more tangibly problematic signs for Geithner's future in the post.

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Topics: Tim Geithner

AIPAC

Hastert: Source Said Negroponte Blocked Me From Getting Briefed On Harman Wiretap

Zachary Roth | April 27, 2009, 12:29PM

The Jane-Harman/AIPAC story is only getting more interesting.

Former House Speaker Dennis Hastert has gone on the record with information that suggests a broader effort than we'd yet been aware of by the Bush administration to keep secret the fact that it had wiretapped a member of Congress.

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Topics: AIPAC, Alberto Gonzales, CIA, Dennis Hastert, Jane Harman, John Negroponte, Justice Department, Michael Hayden, Nancy Pelosi, Wiretapping

AIG

Congress To Ask Liddy: "What Caused The Downfall Of AIG?"

Zachary Roth | April 27, 2009, 10:22AM

AIG CEO Ed Liddy has already testified once before Congress about his firm's starring role in the financial crisis. But it looks like he'll soon be doing so again.

Last week, Rep. Ed Towns -- who chairs the House Oversight Committee, which is probing the causes of the crisis -- sent a letter to Liddy inviting him to appear May 6th. Among the topics that Towns intends to cover, according to the letter: "What caused the downfall of AIG?" and "what has AIG done with its Federal financial assistance?"

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

The Daily Muck

Ben Buchwalter | April 27, 2009, 9:22AM

The Iraqi government condemned a U.S. military raid targeting an elite Shi'ite militia, allegedly armed by Iran, which killed two civilians Sunday. After hundreds protested in Southern Iraq after the attack, Prime Minister Nuri al-Maliki said that the raid violated the U.S.-Iraqi security pact instituted this year, which stipulates that American soldiers cannot conduct military operations without coordination with the Iraqi government. Al-Maliki asked the U.S. military to release the detainees from the attack to the appropriate domestic courts. According to the pact, U.S. soldiers are immune from prosecution even if the raid is deemed illegal. (Reuters)