Former AIG executive Joseph Cassano, who ran the company's financial products division, is facing a federal investigation into whether he "misled auditors and investors" about the mortgage company's finances. AIG terminated Cassano's contract the day before the company went before a congressional panel in October. At the hearing, legislators pointed to the activities of Cassano, who made $280 million during his eight years at AIG, as a major factor in the company's collapse. (Washington Post)

Rep. William Jefferson (D-LA) filed yesterday for the 4th Court of Appeals to drop most of the criminal charges against him, a motion, which, if granted would overturn an earlier decision by a subset of the court's judges. Jefferson is on trial for corruption related to Nigerian business deals. His case rests on his broad interpretation of the "speech or debate" clause in the Constitution, which bars members of congress from being prosecuted for transgressions committed in connection with their legislative duties. (Times Picayune)

Former defense contractor Mitchell Wade, who pleaded guilty in 2006 to bribing former California GOP congressman Randy "Duke" Cunningham, is asking for a lighter sentence in return for his cooperation with federal corruption investigations, according to papers filed Wednesday by his lawyers. As it stands currently, Wade faces a minimum of nine years in prison; he has asked for "a year of home detention, a fine of $250,000, five years probation and substantial community service." Wade has provided information for probes of government employees, private contractors and five members of Congress in addition to Cunningham.

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House leaders voiced their support for the Constitution's "speech or debate clause" -- a provision designed to protect members of congress from being arrested for their legislative activities -- in a brief filed Monday in the case of outgoing Arizona GOP Rep. Rick Renzi. Renzi, who is accused of conspiracy, fraud, and money laundering, says the government collected evidence against him using an illegal wiretap order that taped conversations between him, aides, and other members of congress. He is one of a string of legislators, including Louisiana Rep. William Jefferson and Alaska Sen. Ted Stevens, to use this as defense. (CQ Politics)

Officials at the Office of Tax Revenue said that Rep. Charles Rangel (D-NY) incorrectly received a tax break on his DC home and could owe the government back revenue. The rule is designed for people who make DC their principle home, but Rangel has said his primary residence is in New York. The irregularity could complicate the House Ethics Committee investigation of allegations that the congressman received a rent break on his New York apartments. (Washington Post)

A House committee will investigate the investigation of Eliot Spitzer's post-Valentine's Day tryst with a call girl, amid speculation that the case was politically motivated and designed as revenge for Spitzer's aggressive prosecution of Wall Street executives. Meanwhile, a judge sentenced Ashley Dupre's booking agent to one year's probation. (AP)

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Sen. John Conyers (D-MI) and Sen. Patrick Leahy (D-VT) have written to Attorney General Michael Mukasey pressing the Justice Department on its decision to foot the bill for lawyers hired to defend former Attorney General Alberto Gonzales in a suit about politicized hiring practices. The DOJ had agreed to pay up to $24,000 per month, about twice the price of a public attorney, according to reports last week. (Politico)

Just be reasonable, a federal appeals court ruled Monday in a case about spying on American citizens abroad. The three-judge panel said the U.S. did not need warrants to conduct searches and electronic surveillance, but must meet the Fourth Amendment's requirement for reasonableness. (New York Times)

The New York Times reveals New York Democratic Rep. Charles Rangel's decision to support a tax loophole that allows companies to reduce taxes by opening offices abroad, despite his prior condemnation of it as unpatriotic. Rangel said he did not support closing the loophole because doing so would effectively impose a retroactive tax on the companies, something he opposes. Nabors Industries, which had lobbied aggressively in favor of the tax shelter, donated $1 million to a school project championed by the congressman. The two parties deny any quid pro quo. Rangel chairs the powerful Ways and Means committee and is a top fundraiser for other Democratic candidates. He faces an ethics investigation about charges that he did not disclose income drawn from real estate. (New York Times/Roll Call)

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Former California GOP congressman Randy "Duke" Cunningham and Louisiana's Democratic ex-governor Edwin W. Edwards, both convicted of corruption, are among the people seeking a presidential pardon before Bush steps down in January. Scooter Libby, whose sentencing in 2007 for perjury, obstruction of justice, and lying to investigators during the investigation of the Valerie Plame leak Bush commuted last year, is not on the list. During his eight years in office, Bush has granted only 157 pardons, just 17 more than the 140 Clinton granted during the final days of his tenure. (Washington Post)

A Washington Post report highlights the role of the Office of Thrift Supervision in the financial crisis, showing that the federal regulator "failed to rein in the destructive excesses of banks under their watch despite clear evidence of mounting problems." To date this year, banks under OTS regulation, including big names like IndyMac, Bancorp, and Washington Mutual, account for $355.7 billion in failed assets. (Washington Post)

General Motors announced Friday it would return two of its private planes, just days after auto executives got blasted for flying private jets to Washington to plead for a federal bailout. The company maintained that the decision had been made prior to the bad press. (Washington Post)

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Embattled military contractor Blackwater Worldwide received quite a blow today when U.S. officials said that the new Iraqi security agreement doesn't give retroactive immunity to military contractors. This means that Blackwater employees could now be tried for crimes in Iraq, such as the infamous shooting in September of last year when Blackwater guards opened fire and 17 civilians were killed in Baghdad. (McClatchy)

An internal CIA probe found that the CIA misled Congress and the Justice Department during their 2001 investigation into a shot-down Peruvian plane. The incident occurred in April 2001 when a Peruvian pilot working with the CIA mistakenly opened fire on a small plane suspected of carrying narcotics traffickers, which in reality was carrying U.S. missionaries. The inspector general found that the CIA often ignored rules of engagement in Peru and officials gave false statements to cover up their actions. The ranking Republican on the House intelligence committee, Rep. Peter Hoekstra (R-MI), called Thursday for a new criminal inquiry. (Washington Post)

Sen. Ted Stevens (R-AK) left the Senate Thursday to tears, applause, and a standing ovation after giving a final floor speech. With staffers visibly weeping to his side, convicted felon Ted Stevens concluded his speech on a note that has both guided his career and often gotten him into pork related trouble: "To hell with politics. Just do what's right for Alaska." (Politico)

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The cause of death of two U.S. soldiers is in dispute and the Army has reportedly shredded documents related to the case. The military claims the men died in enemy action in Iraq, but a Salon October report, based on eye-witness testimony and video footage, suggested they were killed by friendly fire and that the Army was engaged in a coverup. (Salon)

Washington lawmakers took some steps to install an oversight apparatus for the bailout yesterday, naming the last two members of the Congressional Oversight committee and vetting Neil Barofsky, President Bush's nominee for bailout inspector general, before the Senate Banking Committee yesterday. But senators said they were worried that, as currently structured, the bailout bill does not give the inspector general enough power. The committee said it would vote on Barofsky by the end of the week. (Washington Post)

A Government Accountability Office report released today blasts the Homeland Security Department for spending billions of dollars of taxpayer money on projects, like luggage scanning equipment and illegal immigrant raids, that are not properly reviewed before or after they start. (USA Today)

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Environmental Protection Agency officials are pushing back against a Bush administration plan that would change how pollution is measured near national parks and and would cease to make pollution violations illegal. Regional directors of the agency say the new rules pander to coal mining companies and would allow underestimations of toxic gas levels. The EPA will decide on the issue this week, but an appeal would flip the decision to the Obama administration, which is likely to be more pro-environment. (Washington Post)

The Pentagon will file new charges against a high-profile Guantanamo detainee it says conspired in the 9/11 attacks. In May, a military court dismissed the charges against Mohammed al-Qatani, who was stopped trying to enter the U.S. just days before the September 11 attacks, without explanation. Defense lawyers at the Pentagon see the move as an effort to "tie the new administration's hands," in the words of one. Obama has promised to close the camp. (New York Times)

TPMMuckraker bids farewell to Sen. Ted Stevens (R-AK), after absentee ballot counts gave Democratic contender Mark Begich an insurmountable lead. Stevens, who celebrated his 85th birthday Tuesday, was convicted in October of concealing $250,000 worth of gifts on financial disclosure forms. (Stevens has said he will appeal after the sentencing in February.) He had served in the Senate since 1968, where he earned a reputation for a fiery temper and his finesse of the federal earmark system. With Stevens out, the Democrats now will be assured of at least 58 seats. (Washington Post)

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The ACLU contends that the U.S. is using other countries to detain U.S. citizens without charges or access to lawyers, in a suit the organization plans to file today. The suit holds the U.S. responsible for the imprisonment of Naji Hamdan, an American Muslim, in the United Arab Emirates. The FBI has admitted to interviewing people being held by other countries, but denies involvement in Hamdan's arrest. (McClatchy)

The U.S. Postal Service has hired an outside investigator to determine whether mortgage giant Countrywide Financial waived fees on a $322,700 mortgage issued to Postmaster General John Potter. Sen. Chris Dodd (D-CT) and Sen. Kent Conrad (D-N.D.) also received "VIP" loans from the company. All three have said they were unaware they were receiving discounts. Countrywide, which was bought out by Bank of America in January, had been a large issuer of subprime loans. (AP)

The House Energy and Commerce Committee will investigate allegations by agency scientists that Food and Drug Administration managers ignored warnings and approved medical devices that are unsafe or ineffective. The letter does not specify which products were thought to be wrongly approved. (New York Times)

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Sen. Chuck Grassley has asked the Treasury Department's inspector general to investigate the potential conflicts of interest surrounding a change to bank merger tax code made as part of the bailout package. Grassley, the most senior Republican on the Senate Finance Committee, names one of Treasury Sec. Hank Paulson's top aides, and questions whether his and others' ties to Wells Fargo and Wachovia executives might have prompted the change, which pushed the controversial Wachovia buyout to Wells Fargo over Citi. The unprecedented leeway given to the Treasury Department to conduct the bailout has raised concerns among lawmakers and watchdog groups that there will not be sufficient oversight. (Financial Times)

Dan Rather's multi-million dollar suit over the CBS investigation of his 2004 "60 Minutes" piece about President George Bush's treatment in the National Guard has found evidence that the network wanted to pick people who would "mollify" the GOP to lead the investigation, which Rather says was politically biased. Notes from top CBS officials show that they considered well-known conservatives like Rush Limbaugh, Ann Coulter, and Matt Drudge. In the segment, Rather suggested that Bush had received preferential treatment in the National Guard; CBS later backed away from the report. The controversy led Rather to resign as anchor. (New York Times)

White House e-mails that went "missing," among them some sought by prosecutors during the investigation of the Valerie Plame leak, could remain confidential, according to the Associated Press. The service reports that federal appeals court justices appeared unconvinced by arguments Friday that records that would explain the e-mails' disappearance fall under the Freedom of Information Act. The suit was filed by the watchdog group Citizens for Ethics and Responsibility in Washington. The three judges hearing the appeal are Republican appointees. (AP)

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The legal troubles of Rep. Rick Renzi (R-AZ) began last February, when an Arizona grand jury charged the congressman with using his post to influence a federal land deal benefiting a former business partner, and indicted him on 35 counts including conspiracy, fraud, and money laundering. Yesterday, it slapped eight more charges on him, alleging that he had led a criminal insurance enterprise and lied on his tax returns. Renzi, who steps down from Congress in January, pleaded not guilty and will stand trial in March. (Congressional Quarterly)

Guantanamo detainees are held in conditions that have led to war crimes charges elsewhere, and they continue to have psychological problems even when returned to their home country, charges a report issued this week by two human rights organizations. The U.S. has released 520 people from the prison, many of whom say they were mistakenly rounded up after being sold to American forces. 250 detainees remain. The report urges the incoming Obama administration to investigate the camp's activities. (Reuters/McClatchy)

Drilling for natural gas, a policy being touted as a means of reducing America's dependence on foreign oil, may contaminate water supplies with unsafe levels of chemicals like benzene, a compound that can cause leukemia, according to an investigation by Pro Publica. The drilling process, pioneered by Dick Cheney's former company Haliburton, uses water pressure and chemicals to break rocks and release the gas. It was exempted by Congress from the Safe Water Act after a 2004 Environmental Protection Agency study declared it safe. (ProPublica)

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The State Department will likely fine Blackwater millions of dollars, the largest private security company operating in Iraq, for shipping weapons to Iraq without the proper permits. The company, which faced investigation in 2007 for its role in the killing of 17 Iraqi civilians, has been accused of arms trafficking, charges the company denies. No criminal charges have been filed. (McClatchy)

Former government lawyers are speculating that the Obama and Bush administrations will come to an "unsatisfactory compromise" on whether White House officials must testify about their role in the firing of nine U.S. attorney generals. Congress has subpoenaed top Bush aides Joshua Bolten and Harriet Miers for documents pertaining to the scandal, but the White House claims executive privilege. A September Justice Department report faulted the Bush administration for stonewalling a DOJ investigation of the affair. (AP)

Three Asian electronics companies pleaded guilty to a price fixing scheme and will pay a $585 million fine, the second highest criminal fine to come out of a Justice Department antitrust investigation. The agreement, settled in a San Francisco court, related to LCDs, the liquid crystal display monitors used in items like laptops and cell phones, which are also the subject of regulator's inquiries in Asia and Europe. (AP)

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With funds from Congress's $700 billion bailout up for grabs, lobbyists are scrambling to influence the allocation of the money, which was originally intended to help banks. Their first stop is to Jeb Mason, a 32-year-old ex-underling of Karl Rove, who is the Treasury's business liason. (New York Times)

The Wall Street Journal suggests that the new president may retain controversial intelligence policies, pointing to centrist advisers from both Democratic and Republican camps and a recent vote supporting an expanded surveillance law. (McClatchy/Wall Street Journal)

Intelligence officials say FBI Director Robert Mueller and CIA Director Michael Hayden, whose support for surveillance and interrogation programs placed them in the center of disagreements about the Bush administration's handling of the War on Terror, believe they will be replaced by the Obama team, a move supported by some Congressional Democrats. Both men say they would remain at their posts if given the opportunity. (Washington Post)

But until Obama takes over, Bush remains in charge of Guantanamo, and moderates within the administration may be gaining ground in the debate about Guantanamo, reports the LA Times. The paper publishes part of a previously undisclosed letter from earlier this year which urges Bush to set more limits on interrogation practices in Guantanamo. (LA Times)

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Insurance giant AIG spent $343,000 on an executive retreat to an Arizona resort last week, despite a financial situation so dire that the Treasury Department agreed to give the firm another $150 billion in taxpayer money Monday. The company has already apologized for its October spree at the lavish St. Regis resort in California, which occurred shortly after the company received its first multi-billion dollar infusion from the government. It does at least appear that AIG has stuck to its promise to take the current economic conditions into account. This time, the company tried to keep the event secret. (New York Times/ABC)

One of Barack Obama's first moves as president may be to close Guantanamo Bay and institute a special national security court to prosecute detainees. The Cuban base has come under fire at home and abroad from those who say the Pentagon is using the offshore location to circumvent US laws against harsh interrogation tactics and holding prisoners for lengthy periods without charge. (CNN)

Absentee ballots poured into Alaska over the weekend, likely pushing voter turnout past the 2004 rate and going some way toward quelling rumors that the state's elections had been manipulated. More than 90,000 ballots remain uncounted, more than enough to leave still contested Senate and House races, featuring controversial GOPers Ted Stevens and Don Young, up in the air. Absentee voters will likely amount to nearly 30 percent of the total. (Daily News Miner)

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Since 2004, the U.S. military has carried out previously undisclosed attacks against Al Qaeda in Pakistan, Syria, and other countries with which we are not at war. The attacks were authorized by a secret order signed by then-Defense Secretary Donald Rumsfeld in the spring of that year, which allowed the military to attack Al Qaeda anywhere in the world. (The New York Times)

Rumors continue to swirl about the low turnout in Alaska last Tuesday, where 8,311 fewer votes were cast than in 2004, despite tight races in the Senate and the House, and Sarah Palin's presence on the Republican presidential ticket. The votes haven't all been counted yet, and Stevens' race is still up in the air. But Ivan Moore, the state's most prominent pollster, tells the paper that "something smells fishy." Still he adds -- along with representaives from both parties -- that it's premature to suggest that the vote was manipulated. (Anchorage Daily News)

The U.S. killed nearly 40 Afghan civilians in an airstrike last week, a joint U.S.-Afghan inquiry confirmed. The U.S. had originally put the total number of deaths far lower. Civilian casualties have strained U.S. relations with the Afghan government. (Reuters)

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The first hearing on the government's reasons behind holding six enemy combatants in Guantanamo began yesterday, only to be closed to the public -- and the detainees themselves -- after a judge ruled that the evidence was classified. The case is the first to come to trial after the Supreme Court's June decision that gave detainees habeas corpus rights. In 2005, the judge overseeing the trial, Bush-appointee Richard Leon, said enemy combatants had no habeas corpus rights. (New York Times)

The U.S. will open a probe into two airstrikes in Afghanistan that may have left 60 civilians dead, amid growing pressure from local leaders who say the U.S. military's attacks frequently disregard the dangers posed to innocent people. (CNN)

Former NY Gov. Eliot Spitzer (D) may have broken local laws by soliciting sex from a call girl the night before Valentine's Day, but the Justice Department says he paid for it with his own money (never mind his career) and they will not bring charges against him. (AP)

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Just in case you missed this yesterday, Newsweek dishes on campaign secrets, reporting that hackers broke into both campaigns' computer systems in mid-summer and that VP candidate Sarah Palin actually spent more than $150,000 of campaign funds on clothing. Meanwhile uptight DC insiders were titillated -- I mean, scandalized -- by the thought of Sarah Palin greeting McCain aides Mark Salter and Steve Schmidt in a towel. (Newsweek)

Despite a trial that lasted more than a month, dredged up details of drug abuse, massage chairs, and marital dynamics, and ended in a guilty verdict, one in three Alaska voters said in exit polls that the corruption of Sen. Ted Stevens (R-AK) was not a factor in their decision. Loyalty to "Uncle Ted"--and perhaps to his mastery of the pork barrel system--may have trumped fear of felons, giving the 84 year-old a narrow lead against his Democratic challenger, Mark Begich. (AP)

High-profile Democrats and Republicans -- including minority leader Mitch McConnell -- have said Stevens can expect expulsion from the Senate if he returns. But now, with Stevens' re-election looking likely, McConnell has hedged, suggesting that the Senate will wait to take action until the case finishes working its way through the courts. (ProPublica)

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Despite GOP scare-tactics over voter fraud, a record turnout and attempts at voter suppression, few voting problems were seen in yesterday's historic election. (Chicago Tribune)

The alternate juror in the trial of Sen. Ted Stevens -- who was called in after Juror No. 4 lied about her father's death in order to attend a horse race in California -- is telling her tale in her own personal blog. Juror No. 11 spilled the beans on the jury's nicknames for the members of the court and the arguments made in deliberations. (Blog of Legal Times)

And speaking of Stevens, the 84 year-old senator seems to have defied the odds -- though the race has yet to be called -- with a slim lead over his Democratic contender, Anchorage Mayor Mark Begich who was heavily favored to win. Not one to be left out, scandal-ridden Rep. Don Young has soared to an apparent victory over Ethan Berkowitz (D) -- a huge upset over the poll which had him losing by as much as 13 percentage points. (Anchorage Daily News)

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Gov. Jim Gibbons (R-NV) isn't just content with having his name cleared. Gibbons said at a press conference Tuesday that he is open to suing the person who accused him of accepting bribes from a software company in exchange for contracts. The federal investigation prompted by Dennis Montgomery's accusations resulted Sunday in no charges for Gov. Gibbons. (AP)

Even with the 2008 presidential election happening today, news is still coming from the election in 2004. A Republican computer consultant testified in front of a federal judge Monday that he did not know of an effort to steal the election by rigging Ohio's vote for Bush. The consultant, Michael Cornell, ran a firm hired by former Ohio Secretary of State Ken Blackwell to provide a backup server in 2004 -- despite his clear GOP connections. (McClatchy)

Students at Grinnell College in a swing district in Iowa had their absentee ballots challenged Tuesday by Republican attorneys. In 2004, the House race in the district was won by just 300 votes by Rep. Eric Palmer (D) who now faces the same Republican challenger. Grinnell students are historically Democrats, and the 50 challenged ballots could impact this tight race. (Iowa Independent)

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Supporters of former Rep. Randy "Duke" Cunningham (R-CA) are pushing for a presidential pardon for Cunningham's tax evasion and conspiracy convictions. Cunningham, who is serving an eight year and four month sentence, has asked for his sentence to be commuted and the Department of Justice has received eight letters from supporters urging for a pardon. (UPI)

Sen. Majority Leader Harry Reid (D-NV) said Saturday that the recently convicted Sen. Ted Stevens (R-AK) would face expulsion proceedings in the Senate. Stevens, in a contentious re-election campaign, is battling to stay in the Senate as is. He's going on air Monday night in Alaska with a two minute ad to win voter support despite the conviction. (Roll Call/The Hill)

Former Detroit Mayor Kwame Kilpatrick may have more trouble coming his way. Kilpatrick's records from his nonprofit foundation have been subpoenaed by federal officials and government prosecutors are asking Kilpatrick's defense lawyers about how they were paid. Kilpatrick is currently serving a 120 day sentence for perjury and obstruction of justice charges. (UPI)

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