Staffers for both GOP senators have told our readers unequivocally that it wasn't Hatch or Corker that placed the hold on the nomination of Neil Barofsky to be inspector general for the bailout money.

So what have we learned so far?

Seven senators' offices have said unequivocally that they're not responsible: Coburn, Dole, Allard, Coleman, Warner, Hatch, and Corker.

In addition, staffers for four more -- Shelby, Sessions, Inhofe, and Bond -- have given versions of "not to my knowledge", meaning these senators probably aren't prime suspects, though they can't be definitively struck from the list.

That leaves 38 more from whom we've yet to hear anything. (Remember, until January there are still 49 GOP senators.)

Meanwhile, we've left two messages with the office of Jim Bunning, the Kentucky GOP senator who during a recent hearing expressed his opposition to Barofsky's appointment, but have heard nothing back.

Maybe our Bluegrass state readers will have more luck...

In response to our quest to figure out which GOP senator is blocking the nomination of Neil Barofsky to be inspector general for the bailout money, Paul Blumenthal of the Sunlight Foundation, a good government organization, provides some key background on how these Senate holds work:

We've had our fair share of experience with secret holds, having fought to reveal the identities of those secretly blocking the Coburn-Obama bill (FFATA) and the campaign finance e-filing bill (S. 223). The first thing of note is that secret holds were, for the most part, abolished during the 110th Congress. The Honest Leadership and Open Government Act mandated the disclosure of the identity of a senator secretly blocking a "measure or matter" "not later than 6 session days" after the initiation of the hold.

The Barofsky nomination provides a good example of the loopholes in this mandate of disclosure. If a bill or, in this case, a nomination comes up prior to a long recess, the disclosure of the offending senator's identity will have to wait until the Senate reconvenes for at least 6 session days, not calendar days. So far, since the nomination was blocked, the Senate convened for two session days. While they are expected to convene tomorrow for a pro forma session, it is unknown whether the Senate will convene for four more days by the end of the year.

In other words, if the Senate does end up convening for four more days this session, we could soon find out the mystery senator's identity -- though how that would actually play out in practice remains unknown.

But if, on the other hand, the Senate doesn't meet for four more days this session, we could never know, and the hold could remain in place at least until the new Congress convenes.

Meanwhile, reports from readers continue to pour in -- more soon.

A staffer for the outgoing Virginia senator confirms to a reader that he didn't put a hold on Neil Barofsky's nomination to be bailout IG.

A staffer for Sen. Norm Coleman unequivocally denied to a TPMmuckraker reader that the Minnesota senator is blocking Neil Barofsky's nomination to be inspector general for the bailout, and said that Coleman wants the appointment to go forward.

A staffer for the outgoing Colorado senator has told a reader that Allard isn't blocking Neil Barofsky's nomination to be inspector general of the bailout.

That's six on the record...

A member of the recently-ousted North Carolina senator's staff tells a reader that she didn't put a hold on the nomination of Neil Barofsky as inspector general for the bailout.

We've already all but ruled out four other GOP senators: Coburn and Inhofe from Oklahoma, and Sessions and Shelby from Alabama.

An hour ago, we asked readers to call their GOP senators and ask whether they put a hold on the nomination of Neil Barofsky to a key post overseeing the Treasury Department's use of bailout money.

We've already heard back from readers on four senators...

Sen. Tom Coburn (OK) -- A reader reports that Coburn's office "was absolutely categorical. They publicize all their holds and they have not placed one on Barofsky."

Sen. James Inhofe (OK) -- "His staff said that they 'didn't believe' that the Senator had placed such a hold.

Sen. Jeff Sessions (AL) -- Sessions' legislative director told a reader: "Not to my knowledge."

Sen. Richard Shelby (AL) -- A staffer told our reader: "I don't think so. If he had, I would have heard about it." (Shelby is the ranking Republican on the Senate banking committee, which cleared Barofsky's nomination two weeks ago.)

Keep letting us know what you hear...

Here's one possible suspect in the mystery of which Republican senator put a hold on the nomination of federal prosecutor Neil Barofsky for the key post of special inspector general for the bailout.

During Barofsky's appearance before the Senate banking committee November 19, Kentucky GOP senator Jim Bunning -- who from the beginning has been a staunch opponent of the bailout as a whole -- made clear that he opposed the nomination. Bunning expressed concern about the Treasury's decision last month to change its plan for how to use the bailout money, and about Barofsky's apparent reluctance, at a previous hearing, to question that decision by Treasury.

From the hearing:

Bunning: The bailout law also allows $50 million for your office, and so you will have a very ample amount of resources.

But I have serious concerns with your nomination. The nominee may be a dedicated public servant. He appears to be a skilled prosecutor and a man of integrity. But I wonder why taxpayers should have to pay $50 million to a watchdog who will have nothing to watch. How willing (sic) the IG performs (sic) his statutory role when the secretary has rewritten the law already, less than two months after it was enacted.

...

In his testimony earlier this week, Mr. Barofsky did not question Secretary Paulson's unlikely interpretation of the bailout law. Now, that's the money that is spent; if he does not question it, he will have little to do but watch the preferred stock positions mature.

...

Ultimately, I believe Mr. Barofsky, with his impressive legal skills, can serve the public far better in the Southern District of New York, where he can continue to prosecute mortgage fraud.

To be clear: Bunning, or any other senator, has a perfect right to oppose Barofsky's nomination for the reasons he suggests above. But anonymously preventing a free vote on the issue, especially at a time of such urgency, hardly offers a model of the kind of openness and transparency that Congress is calling for from the Treasury Department.

We've put in a call to Bunning's office, and will let you know what we hear.

Last week we noticed that at least one unnamed Republican senator has put a hold on the nomination of Neil Barofsky as the Treasury's Department's special inspector general for the bailout.

This is a crucial post for ensuring that the department spends its $700 billion wisely and without favor -- all the more so because Treasury Secretary Henry Paulson, and the man running the bailout, Neel Kashkari, are both former executives at Goldman Sachs, which has already received $10 billion from Treasury. And no one has seriously questioned Barofsky's personal fitness for the job.

Senators have the right to anonymously put a hold on any nomination to a federal post for any reason whatsoever. But given what's at stake here, it's worth trying to find out who's responsible for the hold, and why. We've put in a call to Senate GOP leader Mitch McConnell's office. But we could use your help too.

So if you live in a state with at least one Republican senator, we're asking you to call their office, tell them you're a constituent, and politely ask whether they put a hold on Barofsky's nomination, and if so, why. Then email us and let us know what you find out -- even if it's a 'no' or an inconclusive answer. If nothing else, your information can help us narrow down the list.

And in case it helps, here's the statement put out by Sen. Chris Dodd, the chair of the banking committee, that first mentioned the hold.

One final point: in Friday's post, we noted a jurisdictional dispute between the Senate banking and finance committees, mentioned in a Washington Post story before the hold was put on, as a possible explanation for the move. But a Hill staffer in a position to know tells us that the issue has been resolved. So you can scratch that idea.

We'll be watching for your emails...

Earlier today we noted that the Treasury Department had hired staff with the specific attributes needed to carry out its original plan for the bailout -- buying banks' bad assets -- only to then decide that it would change its approach by directly injecting capital. That news raised questions as to whether the department has the right people in place for what's an extremely complex and crucial task.

And a report in today's Wall Street Journal sheds a bit more light on the hiring issues that have plagued Treasury's response to the crisis. It reveals that the department is struggling to bring on enough people to handle the glut of applications for assistance that are flooding in from troubled financial institutions.

Neel Kashkari, the man running the TARP program, said at a recent at a luncheon before a housing organization that the department's Office of Financial Stability is operating at half-staff, with about 40 full-time employees. Kashkari said he hopes to double that number by the time the Obama administration takes over on January 20th.

(And by the way, granted Kashkari needs to keep the pubic informed on what he's doing, but doesn't he have more pressing matters to attend to right now than attending luncheons?)

The Journal adds, not exactly reassuringly:

In the past month, the Treasury has been scrambling to make major policy decisions while at the same time conducting the nuts-and-bolts tasks of finding a permanent staff. Decisions have largely been left up to interim staff members, many from other federal banking regulators, who are temporarily at Treasury but are expected to eventually return to their previous positions.

Part of the manpower problem here may be caused by the impending transition. According to Wayne Abernathy, an executive at the American Bankers Association, many Treasury staffers may be headed for the door in advance of the changeover, making it especially hard to keep the department fully-staffed.

Abernathy also suggests, intriguingly, that it may have been in part because of this very problem that Treasury switched from the asset-buying approach to the capital-injection approach. "I don't think that was a small part of why Treasury in the end abandoned the asset-purchase program," he told the paper. "It's very people-intensive."

But it doesn't appear that the switch has entirely solved the problem. And if, in addition to having too few people, Treasury also has the wrong people, as was suggested by that earlier report we noted, that would hardly help the situation.

This may have more to do with a desperate and extraordinary situation than with any deliberate malevolence or even incompetence, but given the stakes, the Treasury's personnel problems are worth keeping an eye on nonetheless.

Here's an interesting nugget in Congress's response to the financial crisis that hasn't received as much attention as it deserves.

Earlier this month, the Bush administration nominated Neil Barofsky, a federal prosecutor, to be the Treasury Department's special inspector general on the bailout program. That's a crucial post, given the astronomical sums at issue, the broad authority that Treasury has been given to distribute them, the concerns that have been raised about possible conflicts of interest, and the general urgency of our efforts to prevent an economic collapse.

So you'd think Congress would be doing everything it could to get Barofsky confirmed right away. You'd be wrong.

Last week, Sen. Chris Dodd, the Connecticut Democrat who chairs the banking committee, issued a little-noticed statement saying that although the nomination "was cleared by members of the Senate Banking Committee, the leadership of the Senate Committee on Homeland Security and Governmental Affairs, and all Democratic Senators," it was "blocked on the floor by at least one Republican member." (itals ours.)

Senate rules allow any senator to anonymously block a vote on confirmation to any federal post, for any reason.

The rationale for the move remains unclear. But a Washington Post story from a few days before Dodd's statement offers two suggestions. It notes that Barofsky supported Barack Obama, and describes an unresolved "battle between the Finance and Banking committees over which has jurisdiction over the confirmation process."

Blocking an urgent nomination because the nominee, like 52 percent of voters, supported Obama seems petty even by contemporary GOP standards. But a congressional turf war over jurisdiction seems only slightly less so. So either of these two explanations would be a pretty damning indictment of Congress's response to the crisis.

We'll keep you posted as we dig into this...

The Treasury Department had originally intended that the $700 billion of TARP bailout money would go to buying up the bad assets of banks and other financial institutions. But then, as was widely reported, Treasury Secretary Hank Paulson reversed course last month and announced that he would take an entirely different approach, using the money simply to inject new capital into troubled banks.

What have we lost through this flip-flopping? It's impossible to know for sure, but one line from a Tuesday New York Times report offers a hint. The paper notes an interesting finding in an audit of the rescue plan, conducted by the Government Accountability Office:

Treasury already had hired staff members for the initial mission, some of whom were not necessary or best suited for the work required under the new strategy.

So have new staff members, who have specific expertise in the issues involved in the new strategy, now been hired? Or is Treasury assigning the crucial task of rescuing the nation from financial collapse to staffers who aren't the best people for the specific job? We'd love to know.

The rest of the expected contents of the GAO report are hardly more encouraging. The Times says the report "is expected to be critical of the Treasury Department's failure to set up ways to track how its bailout money is being used in the marketplace."

It's also "likely to call for tighter controls over the conflicts of interest that are arising as financial specialists, institutions and law firms are hired for Treasury work that could later aid their private-sector clients."

Both of these potential problems have been highlighted by members of Congress and others in recent weeks.

More on this when the report is officially released next week...

With all the different programs being undertaken by the federal government to rescue the economy, it's hard to keep straight everything that taxpayers are now on the hook for.

That's especially true because the commitments are being made by several different government agencies (primarily the Treasury Department and the Federal Reserve) and even more so, because they come in a range of forms.

Some of these commitments -- for instance, the Treasury's bailout program -- represent actual spending. We could see a return on these investments, of course, depending on how the companies that we've taken on fare going forward, but there are by no means any guarantees.

Others, meanwhile, represent loans backed by collateral, meaning the government would have had to have badly miscalculated for us not to be paid back in full, probably with interest. And some are simply loan guarantees.

So putting an exact figure on exactly how much we've put up doesn't tell us much. But here's our best attempt, based on piecing together several reports, at a non-comprehensive rundown of the major components of the government's effort to stave off a financial collapse.

Spending:

- The Troubled Assets Relief Program, in which Congress allocated $700 billion to the Treasury to buy equity stakes in financial institutions.

- A Federal Reserve program, announced in October, to buy up to $2.4 trillion in commercial paper that companies use to pay bills. That figure represents what eligible issuers could sell, but the Fed has said it does not intend to buy anywhere near that amount. Earlier this week the Washington Post put the amount that it had so far put up at $266 billion.

Read more »

Yesterday, the Washington Post and Bloomberg News both reported on the astronomical sum of money -- the Post put it at almost $900 billion -- that the Federal Reserve is quietly lending to banks and other financial institutions hit by the financial crisis.

Unlike with the $700 billion in bailout money allocated to the Treasury Department, the Fed won't reveal basic details about the program: for instance, which institutions are getting that money, how much they're getting, or which assets are being used as collateral on the loans.

Bloomberg News filed a Freedom of Information Act (FOIA) request, in order to pry loose the information, but the Fed responded that this was "confidential commercial information", reports the Post, and argued that the Federal Reserve Bank of New York, which keeps the information, is not subject to FOIA. Bloomberg has now filed a federal lawsuit against the Fed.

Some in Congress are also concerned. Several members at a hearing of the House Financial Services Committee last week expressed skepticism about the lack of transparency. And a staffer for Rep. Scott Garrett (R-NJ), a member of the House financial services committee, told TPMmuckraker that the congressman will soon send a letter to Fed Chairman Ben Bernanke asking him to provide further details about the loans.

At that same hearing, Bernanke explained the reason for the Fed's secrecy: "There's a concern that if the name is put in the newspaper that such and such bank came to the Fed to borrow overnight for a good reason, that people might begin to worry: Is this bank credit-worthy?" he said. "And that might create a stigma, a problem, and might cause banks to be unwilling to borrow."

Tim Yeager, a former economist at the Federal Reserve Bank of St. Louis, and now a professor of finance at the University of Arkansas, bolstered that view. He told TPMmuckraker that in normal times more disclosure makes sense, but that in times of crisis like this, "if word leaked out" that banks were going to the Fed to borrow money, "there could be a liquidity run."

We've made calls to the House financial services and oversight committees, and the Senate banking and finance committees, to ask whether they have plans to look into the issue further, given the amount of taxpayer money at issue. We'll let you know what we find out.

The Treasury Department is reviewing concerns relating to the $18 million compensation package received by Mack Whittle, the former CEO of South Financial bank, reports the Greenville News.

As we noted yesterday, Whittle moved up the date of his retirement, possibly so that his pay wouldn't be subject to restrictions on companies participating in the bailout program. Last week, South Financial received $347 million as part of that program.

A spokesman with the office of S.C. Rep. Bob Inglis told the Greenville News: "[Treasury is] examining the issue."

Inglis and South Carolina governor Mark Sanford -- who Whittle had in recent years opposed politically -- had asked Treasury to probe the matter. Both are Republicans.

In a letter to Treasury Secretary Henry Paulson, Inglis urged Paulson to close loopholes to prevent executives from gaming the system in the way that Whittle may have done.

As we reported yesterday, Whittle served on John McCain's South Carolina finance team, and raised money for George Bush in 2000.

Whittle, who has said he'll remain on South Financial's board, is also being sued by a company shareholder seeking to block the payment.

Late Update: In fact, the news that Treasury is looking into the Whittle matter was first reported yesterday afternoon by TheStreet.com. The financial news site was also first to raise questions about the timing of Whittle's departure back in October.

Mack Whittle is being sued by a shareholder of South Financial, who is trying to block his $18 million compensation package.

The shareholder, Vernon Mercier, said the suit was prompted by last week's announcement that South Financial would receive bailout funds, reports a South Carolina TV station.

A judge declined Mercier's request for an injunction blocking the payment, but delayed a decision on a motion to dismiss the suit.

A lawyer for Whittle, Billy Wilkins, told the court: "Mack Whittle and his family have given a lot to this community and it's a tough time for him. Particularly to be ridiculed as he has been in the press and accused of things that he didn't do: getting a golden parachute, taking advantage of the taxpayers. All of that stuff is absolutely not true."

Wilkins continued: "[Whittle's] retirement benefits are based solely on an employment contract that had been in existence for over two years when he retired. He's getting nothing more or less than that what he is legally entitled to."

Mack Whittle was a member of John McCain's South Carolina finance team for the Arizona senator's recent presidential bid, and was on the finance committee for South Carolina senator (and McCain pal) Lindsey Graham's 2002 Senate campaign. Whittle also raised money for George Bush's run in 2000.

That's according to a press release sent out by McCain's campaign in March 2007, and reported by the States News Service (via Nexis). It lists 40 members of the finance team, including:

Mack Whittle of Greenville, CEO of the South Financial Group. Bush Fundraiser 2000. Graham for Senate Finance Committee 2002.

Whittle also serves on the board of the University of South Carolina, according to published reports.

And according to the transcript (via Nexis) of an October 22 conference call with reporters, Whittle will remain on South Financial's board. On the call, Whittle said: "I have a three-year term on the board, and I just plan on continuing to serve out that term."

Whittle retired late last moth with an $18 million severance package. South Financial recently received $347 million in bailout money.

Late Update: In 2003, Bush also appointed Whittle a member of the Advisory Committee on the Arts, says this White House press release.

One other point worth noting on the story of Mack Whittle -- the former CEO of a South Carolina bank, whose expedited retirement date ensured that his company could get bailout money without his compensation package being limited by restrictions on CEO pay that were part of the bill.

Whittle got an $18-million golden parachute when he left late last month. But as the bank itself, South Financial, noted in a statement in response to the controversy, less than 15 percent of that total would have exceeded the pay limit imposed by Congress.

In other words, the limits on executive pay that Congress insisted on turn out to have very few teeth. That's in part because there are no limits on pensions -- so Whittle's $9 million pension would have been unaffected.

Senate Democrats last month tried to push the Treasury Department toward establishing stricter limits on executive pay. But during negotiations over the bailout, Treasury expressed the concern that stricter limits would reduce participation in the program.

Pro Publica notes the remarkable tale of Mack Whittle, the former CEO of South Financial Group, a South Carolina bank.

Whittle founded South Financial back in 1986, and under his leadership it grew to be the largest bank in the state. It expanded into North Carolina and Florida, eventually boasting $13.7 billion in total assets and 180 branch offices.

But Florida was one of the hardest hit states when the housing market crashed, and South Financial suffered. In early 2007, the bank's stock was above $26. Today it's at about $3.50. In the third quarter this year, South Financial posted a $25 million net loss.

In early September, Whittle announced that he planned to retire by year's end. A few weeks later, the financial crisis struck, and Congress soon passed a $700 billion bailout bill for banks. South Financial quickly announced that it would apply for bailout money.

Then, in a federal regulatory filing dated October 28, the bank quietly announced that Whittle had in fact stepped down as CEO a day earlier. No reason was given, and Whittle's successor as CEO had not yet been named.

So, why the expedited schedule? Perhaps because Whittle's new leaving date meant that he wasn't subject to limits on executive pay that were imposed as a condition of the bailout. As a result, Whittle enjoyed an $18 million send off, which includes a $9 million pension benefit, and perks like a $133,920 auto allowance and $75,000 for "financial planning." (He'll need some!)

And -- proving you can have your cake and eat it too -- earlier this week, it was announced that South Financial will receive $347 million from U.S. taxpayers as part of the bailout program.

South Carolina governor Mark Sanford, a Republican, has suggested that Whittle may have been "gaming the system" by moving up his retirement date, and has called for a Treasury Department investigation.

The bank said in a statement that the hefty package "reflected [Whittle's] 20 year career with [South Financial Group] as its founder and only CEO."

One expert on executive compensation told Pro Publica: "The whole idea was to avoid these types of arrangements" The Treasury "doesn't want the companies receiving taxpayer funds, terminating executives and having them walk away with excessive golden parachutes."

In this case -- and perhaps in others yet to be revealed? -- it looks like Treasury may have fallen short, to say the least.

Late Update: Given that its South Carolina governor Mark Sanford who's calling on the Treasury Department to investigate Whittle, it's worth noting that -- according to the Columbia paper The State (via Nexis) -- in 2006, Whittle was at the forefront of a group of state business executives who were dissatisfied with Sanford's policies toward business as governor, and backed a potential primary challenger, former state commerce secretary Bob Royall. Royall ultimately decided not to run, but it seems likely that Whittle isn't at the top of Sanford's Christmas card list, to say the least.

This morning, reports the Wall Street Journal, credit ratings agency Standard & Poor's sharply downgraded its rating for bond insurer Ambac Financial, anticipating that the company's debt obligations would continue to absorb losses.

Why should we care?

Because this seemingly mundane piece of financial news offers a window into one of the crucial -- and often under-covered -- causes of the financial crisis currently shaking Washington and the country: the role of the credit ratings agencies. And inside that wider crisis, as we'll be making clear in the coming weeks, there's perhaps as much muck, both personal and institutional, as anything the Bush administration has given us over the last eight years.

First, a very quick and dirty rundown of the issue:

The banks and insurers felled by the collapse of the housing market relied on the three major credit ratings agencies -- S&P, Moody's, and Fitch -- to rate the mortgage-backed securities that they offered to investors. But here's the problem: the ratings agencies are paid for their work by the very banks and insurers for whom they're producing ratings. If the banks don't like the rating they receive from one ratings agency, they can simply go to another agency that's willing to produce a more favorable score -- what's known as "ratings shopping."

As a result, the agencies have an obvious incentive to knowingly inflate their ratings -- and sometimes even to rate junk securities that shouldn't even get a rating at all. And since many of these securities turned out to be all but worthless pools of home-loan mortgages, that's exactly what the ratings agencies often did.

Internal agency documents released last month as part of an investigation by Rep. Henry Waxman's House Oversight and Government Reform Committee show that at least some ratings analysts were aware that their ratings were more about increasing their company's bottom line than accurately gauging the value of the securities at issue.

Here's one IM exchange from April 2007, between two S&P analysts, reported last month by the Wall Street Journal --:

Rahul Dilip Shah: btw -- that deal is ridiculous.
Shannon Mooney: I know right ... model def does not capture half of the risk
Shah: we should not be rating it.
Mooney: it could be structured by cows and we would rate it.

And in a 2007 presentation to directors, Moody's CEO Raymond McDaniel wrote:

Analysts and MDs [managing directors] are continually 'pitched' by bankers, issuers, investors -- all with reasonable arguments -- whose views can color credit judgment, sometimes improving it, other times degrading it (we 'drink the kool-aid'). Coupled with strong internal emphasis on market share & margin focus, this does constitute a 'risk' to ratings quality.

At a hearing he held on the issue, Waxman himself quoted another S&P analyst asserting:

Rating agencies continue to create an ever-bigger monster, the CDO market. Let's hope we are all wealthy and retired by the time this house of cards falters.

The ratings agencies are now being forced by events to at last downgrade some of these securities -- hence today's news about S&P's belated move to downgrade Ambac, which sent the company's stock plummeting.

Indeed, this same dynamic preceded the collapse of insurance giant AIG in September. Until the 15th of that month, S&P had rated its unsecured debt at AA minus, far above what it merited given the value of the underlying mortgages -- leading investors to see AIG as a secure bet. When, on that day, S&P suddenly and severely cut their rating to bring it into line with reality, the company was required to post $14 billion to comply with the terms of the credit default swap agreements they had entered into. That was $14 billion AIG didn't have, and all of a sudden, U.S. taxpayers were on the hook.

It doesn't have to be this way. Sean Egan is a founder of Egan-Jones, an independent ratings agency that's paid not by insurers, but by investors. In testimony before Waxman's committee, and again in an interview with TPMmuckraker, Egan emphasized that -- despite the apparent personal corruption of individual analysts and senior management at the agencies -- the only way to fix the problem is for the federal government to take steps to re-align the system of incentives that prevails on the agencies. If they're rewarded for giving investors an accurate picture of the value of securities, they'll be likely to do so. If not, they'll keep pumping up their ratings to please the banks. And soon enough, a new house of cards will rise and fall.

In response to concerted requests from Republicans, Rep. Henry Waxman (D-CA), who chairs the House Oversight Committee, announced today that the committee will hold hearings into the failure of mortgage giants Fannie Mae and Freddie Mac.

Waxman's low-key announcement -- "the request we've received from the minority will be pursued," he said -- came at a hearing with executives of AIG, as part of a committee investigation into the failed insurer. Yesterday, GOP members of the committee launched a campaign to discredit Waxman's broader investigation into corporate misdeeds, including at AIG.

Republicans had also called on Waxman to look into Fannie and Freddie, who, unlike many other corporations implicated in the current financial crisis, have closer ties to Democrats than to the GOP, by some assessments.

At a hearing yesterday, Rep. Tom Davis of Virginia, the ranking Republican on the committee, said of Fannie and Freddie: "They seem to be at the epicenter of the crisis, and yet the chairman continues to focus on issues, such as executive compensation, that generate headlines but neither get to the root of the problem nor move us any closer to a solution. We'd hate to think the millions of dollars Fannie and Freddie executives contributed to Democratic congressional candidates also contributed to the reluctance to investigate this aspect of the crisis."

Republicans also called, at this morning's hearing, for Attorney General Michael Mukasey to appoint a special prosecutor to look into Fannie and Freddie.

Henry Waxman, House Oversight Committee Chairman, added three more hearings on the financial crisis to the Committee's schedule in October.

Oversight had already planned to hold hearings on AIG's bailout and Lehman Brother's bankruptcy.

The new hearings will cover hedge fund regulation, the breakdown of credit rating agencies and the role of federal regulators.

"This financial crisis has shaken the global economy," Waxman said. "Congress cannot wait until a new administration arrives in January to examine what went wrong and who should be held accountable."

Waxman wrote letters requesting testimony from Treasury Secretary John Paulson, philanthropist George Soros, former Fed chairman Alan Greenspan, SEC chairman Christopher Cox and the heads of a number of hedge funds.

We knew we hadn't seen the last news report on McCain campaign manager Rick Davis' ongoing ties to the lobby firm he founded, Davis Manafort.

Newsweek has taken a look at annual filings made by the company to the Virginia state government. Those filings, the most recent of which is from April of this year, list Davis as one of two officers and directors of the firm.

As the magazine notes, that information suggests that in recent days, the campaign "appear[s] to have overstated the extent to which Davis had severed his relationship with his lobbying firm." A statement posted on the McCain campaign website by a spokesman Wednesday morning -- in response to reports that Davis's firm was being paid by the home-loan giant Freddie Mac as recently as this month -- asserted that Davis "separated from his consulting firm, Davis Manafort, in 2006." And a campaign spokeswoman wrote in an email to Newsweek Tuesday that Davis "left" the firm that year.

Of course, the fact that someone is listed as an officer on a corporate filing doesn't prove that he was involved in the day-to-day running of the company during the period in question. But Newsweek's find will certainly keep the heat on Davis, who yesterday skipped lunch with reporters, at a time when McCain would prefer the focus to be on his own efforts, belated and vainglorious as they may be, to help avoid a financial meltdown.