Don Siegelman

Whistleblower: Aide Reported On Siegelman Case To "Recused" U.S. Attorney "Every Day"

Zachary Roth | November 21, 2008, 6:13PM

The New York Times has more details about the possible continued involvement of the U.S. Attorney in the prosecution of former Alabama Democratic governor Don Siegleman, even after she had formally recused herslef form ghe case because her husband was a GOP operative who had run the gubernatorial campaign of Siegelman's opponent.

The paper reports allegations made in a sworn affidavit by a whistleblower in the office, Tamarah Grimes, about the involvement of U.S. Attorney Leura Canary. Time had reported similar claims earlier this month -- in response to which Siegelman expressed outrage in an interview with TPMmuckraker.

Says the Times:

[I]n her complaint, the Justice Department employee, Tamarah T. Grimes, cited several instances suggesting Ms. Canary maintained a close watch on the case. Ms. Grimes said a legal aide in the office reported on Mr. Siegelman's trial to Ms. Canary or her top deputy "every day, sometimes several times per day by telephone." Once, she observed Ms. Canary "frantically pacing in the executive suite" after a courtroom blowup, "pleading with someone" to get on the phone to "tell Louis he has to control his temper."

Ms. Grimes also disclosed an e-mail message written by Ms. Canary commenting on legal strategy in the case and suggesting to aides that Mr. Siegelman not be allowed to "comment on court activities in the media." Ms. Grimes, who is also in an dispute with the department related to her allegations that the Siegelman prosecution team had harrassed her, cited the affidavit of a former legal aide in the Montgomery office, Elizabeth Jane Crooks, who wrote that "the morning that the trial started, the U.S. attorney herself carried food and beverage over to the courthouse to support the 'Trial Team.' "

The Times also reports that lawyers for Siegelman, whose appeal begins next month in Atlanta court, have made new filings based on Grimes' claims.

Ted Stevens

Stevens Witness: I Lied About Immunity Deal

Zachary Roth | November 21, 2008, 4:30PM

A witness who testified against Ted Stevens has said in a letter to the judge that he falsely denied on the stand that he had an immunity deal with prosecutors in exchange for his testimony.

The witness, David Anderson, a welder who worked on the Alaska senator's home, wrote in the letter that his testimony that there was no immunity agreement "is simply not true". And he wrote that prosecutors "instructed me on how to sugar coat [the immunity deal] and get it swept under the rug during the trial."

The letter was filed today by defense lawyers.

Stevens was convicted on seven counts of having lied on his Senate disclosure forms about gifts he received from an oil-services contractor. Earlier this month, he lost his bid for re-election to the Senate.

Late Update: Anderson's letter contains more eyebrow-raising allegations than we'd first noted. He writes: "There was a contract to have me murdered issued by Bill and Mark Allen."

According to a report on the blog AlaskaDispatch, Anderson is Bill Allen's nephew, and Mark Allen is Bill Allen's son. Anderson clashed with Mark Allen, and therefore Bill Allen, over a woman. To protect his family, both from Bill Allen and from unspecified future charges, Anderson testified against Stevens, he told AlaskaDispatch's Tony Hopfinger, who has written for Bloomberg News and Newsweek.

So obviously, this news is being driven by a lot of different agendas, which we don't yet know enough to evaluate. And the specific details of the Anderson-Allen dispute aren't necessarily relevant. But the key point is that if there's compelling evidence that Anderson gave false testimony, or that prosecutors encouraged him to testify falsely or in a misleading manner, Stevens' conviction could potentially be put in doubt.

We'll keep you posted as things become clearer...

Late Late Update: DOJ has responded to Anderson's claims. AP reports:

The Justice Department responded quickly, saying the government never made any agreement of immunity for Anderson or any of his family or friends. "Mr. Anderson's statement in his November 2008 letter is not true, and the court is aware that it is not true," government lawyers said.

...

[T]he Justice Department said Anderson told two FBI agents in an August 13 meeting that he knew there was no immunity agreement and that the March affidavit was false.

The government agreed not to make him testify against family members, but "Anderson knew that there had been no agreement relative to immunity or promises of immunity by the government as to anyone," the Justice Department said.

Interior Department

Interior Disciplines Staffers For Partying With Oil Workers

Zachary Roth | November 21, 2008, 2:08PM

Looks like having sex with employees of oil companies you're supposed to be regulating -- not to mention doing drugs in the office -- isn't such a great career move after all.

An internal Interior Department report issued in September found that a "culture of substance abuse and promiscuity" had existed from 2002 to 2006 in the department Denver office. Staffers had been getting drunk and having sex with oil company personnel, as well as doing coke and smoking pot in the office.

And today, reports the Associated Press, Interior took disciplinary action against those involved -- ranging from a warning letter to termination. The department wouldn't provide further details on the punishments.

Workers in the office were also found to have accepted golf and ski trips, snowboarding lessons and concert tickets from oil companies.

Mack Whittle

UPDATED -- Report: Treasury Looking Into Whittle Pay

Zachary Roth | November 21, 2008, 12:15PM

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.

Todd Boulanger

Justice Docs Suggest Identities of Team Abramoff Lobbyists Who Bribed Aide

Zachary Roth | November 21, 2008, 11:09AM

Yesterday, Trevor Blackann, a former aide to Missouri Republicans Sen. Kit Bond and Rep. Roy Blunt, pleaded guilty to concealing thousands of dollars in illegal gifts he received from lobbyists who were part of Team Abramoff.

Exactly who were those lobbyists? Today, Rollcall fingers Todd Boulanger and James Hirni as the top suspects:

According to documents provided by the Justice Department, Blackann received the majority of gifts -- valued at more than $3,100 -- in 2003 from an individual identified only as "Lobbyist D," a close Abramoff associate.

But details provided about "Lobbyist D" match the career trajectory of Todd Boulanger, a former aide to then-Sen. Bob Smith (R-N.H.), who later worked for the firm Preston Gates and then Greenberg Traurig.

...

Although unnamed, details about "Lobbyist E" match those of James Hirni, a former Senate aide who at one time worked for Greenberg Traurig with both "Lobbyist D" and Abramoff.

Boulanger has long been known as a key member of Team Abramoff. In 2006, TPMmuckraker published a 2002 email he sent to fellow lobbyists, asking them to contribute to the re-election camapign of Mississippi GOP senator Thad Cochran, whose office, wrote Boulanger, had "never said 'no'" to the Choctaw Indians, a casino-owning Abramoff client.

Both Boulanger and Hirni are still in the lobbying game. Boulanger works for Cassidy and Associates, while Hirni is a "director of Republican outreach" for Wal-Mart, according to Roll Call. Neither returned the paper's calls for comment.

Perhaps ominously for both, Blackann is said by his lawyer to be cooperating with prosecutors as they seek to build other cases.

As for Bond and Blunt themselves, the office of the former said yesterday he had "no knowledge" of Blackann's ilegal activities. Blunt's office has not yet commented publicly on the matter.

Jack Abramoff

Trip To "Gentleman's Club" Leads To Guilty Plea For Married Abramoff Crony

Zachary Roth | November 20, 2008, 5:03PM

The wide-ranging probe into the activities of disgraced GOP lobbyist Jack Abramoff has netted another conviction.

Trevor Blackann, a former aide to two Missouri Republicans, Rep. Roy Blunt and Sen. Kit Bond, pleaded guilty today to making false statements on his tax returns, concealing thousands of dollars in illegal gifts he received from Team Abramoff, reports The Hill.

What were those gifts? Only a free trip to Game 1 of the 2003 World Series in New York, a junket that included:

- airline travel to and from New York City.
- a ticket to the game.
- admission to, and entertainment at, a "gentleman's club" for the married aide.
- one-night accommodations in an "upscale" hotel.
- transportation in a chauffeured SUV.
- a souvenir baseball jersey.
- free meals and drinks.

All in all, not a bad haul.

In return, court filings allege, Blackann got Bond to write a letter of support for someone who wanted a political appointment to the Bureau of Indian Affairs.

According to the Associated Press, Blackann said in court documents Blackann that he knew "the lobbyists gave these things of value for or because of official actions they were seeking from him or had obtained from him."

Abramoff has been cooperating with prosecutors as they build cases against others in his circle.

Bailout

Suit Seeks To Block Whittle's Executive Pay

Zachary Roth | November 20, 2008, 2:43PM

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

Whittle Was On McCain's South Carolina Finance Team

Zachary Roth | November 20, 2008, 1:25PM

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.

Bailout

Pay Limits Wouldn't Have Whittled Mack's Much

Zachary Roth | November 20, 2008, 12:56PM

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.

Mack Whittle

Earlier Retirement Date Lets CEO Of Bailed-Out Bank Pocket $18 Million

Zachary Roth | November 20, 2008, 11:57AM

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.

Credit Ratings Agencies

Senate To Probe Ratings Agencies

Zachary Roth | November 20, 2008, 10:36AM

Yesterday we told you about the key role of the credit ratings agencies in helping to trigger the current financial crisis.

And today, the Wall Street Journal reports that a probe by the Senate's Permanent Subcommittee on Investigations will focus in part on that very subject.

As we explained, the leading ratings agencies -- Moody's, Standard and Poor's, and Fitch -- are paid by the banks whose securities they rate, creating a clear incentive for them to inflate their ratings.

The Senate investigation is expected to go more deeply into the problem than did hearings held last month by Rep. Henry Waxman's House Oversight Committee.

Norm Coleman, the subcommittee's ranking Republican, who will lead the portion of the investigation focusing on the ratings agencies, told the Journal: "We're going to look at the root causes of this, looking at whether the inherent conflict clouded the judgment of the agencies. Somebody missed something here. Was it because of the complexity or was it in the zeal to make money?"

The SEC, as well as New York Attorney General Andrew Cuomo, are already looking into the agencies. An SEC report released in July found "serious shortcomings" in their practices.

Thomas Kontogiannis

More Trouble For Cunningham Buddy

Zachary Roth | November 20, 2008, 9:19AM

Looks like Thomas Kontogiannis -- who's now in jail for helping launder bribes for his friend, former GOP Congressman Randy "Duke" Cunningham -- has more legal woes. He's been accused in a newly filed lawsuit of participating in a scheme to steal more than $50 million, reports Newsday.

The lawsuit, filed by Manhattan-based DLJ Mortgage Capital, alleges that Kontogiannis and others drew up false loan applications on residential properties in Brooklyn and Queens, which they either owned or planned to develop.

Newsday goes on:

The applications were approved by one of Kontogiannis' mortgage funding firms, which then obtained the money from DLJ and the other institutions, according to court papers.

DLJ and the other lenders eventually discovered that the mortgages were never recorded, the complaint stated, adding that the scheme was only uncovered when monthly mortgage payments ended. A further investigation revealed that many of the properties were then sold by Kontogiannis and the other defendants, DLJ said in its complaint.

Kontogiannis' wife Georgia, and other relatives, are also named as defendants.

Cunningham pleaded guilty in 2005 to conspiracy to commit bribery and is serving an eight year sentence in federal prison.

During Cunningham's recent sentencing, a prosecutor told the judge that there was an ongoing criminal investigation into Kontogiannis' alleged mortgage fraud.

Bailout

"It Could Be Structured By Cows And We Would Rate It": How The Ratings Agencies Helped Cause The Financial Crisis.

Zachary Roth | November 19, 2008, 5:43PM

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.

George Bush

Dems Bash Burrowing Bushies

Zachary Roth | November 19, 2008, 10:38AM

Yesterday we flagged a Washington Post report about the "burrowing" of Bush administration political appointees into career jobs at various departments -- most prominently Interior -- where it will be difficult for the incoming Obama administration to dislodge them.

Bush certainly didn't invent what's sometimes called the "headless nail" phenomenon, but he's taking a bit of heat for the news nonetheless. Yesterday, reports the Post in a followup, Democratic senators Chuck Schumer and Diane Feinstein wrote in a letter to the White House:

Today's report reveals that senior members of your administration are undermining your public commitment to ease the transition by reorganizing agencies at the eleventh hour and installing political appointees in key positions for which they may not be qualified," they wrote. "We respectfully urge you to stand by your public commitment to a smooth transition by directing executive agencies immediately to halt any conversions of political appointees to career positions.

And White House press secretary Dana Perino was forced to deny that there's an orchestrated effort to embed loyalists in the bureaucracy.

But there's evidence that the burrowing under Bush has been extensive, and hasn't just been confined to the administration's waning days. The Post adds:

The Government Accountability Office has long tracked such political-to-career conversions, and it reported in May 2006 that during the first four years of the Bush administration, 144 political appointments were converted to career positions. Thirty-six were at the Health and Human Services Department, 23 were at the Justice Department, 21 were at the Defense Department and 15 were at the Treasury Department.

It'd be nice to know just which Bushies have already embedded themselves in those departments. We'll see what we can find out...

Tim Mahoney

Mahoney on Sex Scandal: "I Will Ride This Out"

Zachary Roth | November 18, 2008, 4:24PM

Looks like the reality hasn't quite sunk in yet for Tim Mahoney.

The red-faced Florida Democrat, who lost his House seat this month after admitting to at least two affairs, showed up today to a Financial Services Committee hearing today, ignoring the advice of the committee staff and even that of his own aides, reports ABCNews.com.

What's more, Mahoney aides say he told them he wanted to meet privately with committee chair Barney Frank to offer his advice on the economic crisis.

As he left the hearing room, Mahoney told the website: "I'm still a congressman with a job to do, and I intend to ride this out."

But one of his staff members took a different view, telling ABCNews.com: "Someone didn't get the memo that he wasn't re-elected."

Alberto Gonzales

Who's Paying For Gonzo's Defense On Politicization Charges? We Are.

Zachary Roth | November 18, 2008, 4:00PM

To defend him against charges that he politicized DOJ hiring practices, Alberto Gonzales will have a private attorney -- on the taxpayers' dime, reports McClatchy.

The move, requested by Gonzo himself, will likely end up costing taxpayers about twice as much as a top DOJ attorney would have, according to the news service.

Gonzales is being sued by a former high-ranking Justice official, Dan Metcalfe, on behalf of a group of his law students. An internal DOJ report found that, under Gonzales, the department had favored politically conservative candidates for internships, prosecutor jobs, and immigration judgeships. The students allege that their careers were irreparably harmed as a result of being unfairly passed over for two department programs that hire law students.

A Justice Department spokesman told McClatchy the department wouldn't comment on the reasons for the approval, or on the cost to taxpayers.

And how do you like this rationale from Robert Bork Jr. -- a spokesman for Gonzales, and the son of the unsuccessful arch-conservative Supreme Court nominee -- for why Gonazles requested the private lawyer?

Gonzales, said Bork Jr., "values the work that the Department's civil attorneys do in all cases" but believes that "private counsel can often be useful where (department) officials are sued in an individual capacity, even where the suit has no substantive merit."

Senate Judiciary Committee

Senate GOPers On US Attorney Firings: Voter Fraud, Voter Fraud!

Zachary Roth | November 18, 2008, 2:21PM

Election-law expert Rick Hasen picks out an interesting passage from the minority section of the Senate Judiciary Committee's just-released report into the US Attorneys firings.

Some members of the committee's Republican minority -- including senior senators like McCain pal Lindsey Graham, new NRSC chair John Cornyn, and ex-presidential candidate Sam Brownback -- strenuously disagreed with the findings of the Majority (and with an internal report produced by DOJ's Office of the Inspector General) that the White House helped engineer the firings, and that several of the dismissals were made for inappropriate political reasons.

Instead, they used the report as a chance to bang the drum on "voter fraud" one more time. But they continue to willfully confuse voter registration fraud with voter fraud -- even though numerous experts have now pointed out that there's no evidence that fraudulent voter registration forms lead to fraudulent votes being cast.

The dissenting Republicans wrote:

Perhaps the most Orwellian aspect of the Majority report is its repeated insistence that there is no vote fraud in this country that is ever worth investigating. At one point, the Majority even places scare quotes around the term, lest anyone receive the impression that the Majority believes that voter fraud could ever be a real problem. Yet during the federal elections just concluded, the American public saw numerous examples of serious attempts to commit voter fraud in this country.

Most of these incidents involved the Association of Community Organizations for Reform Now (ACORN), a group that actively promotes voter registration in many cities across the nation. ACORN tends to target areas where it believes that it can register Democratic voters, such as parks, public-assistance agencies, and liquor stores, ACORN's history is littered with claims and convictions of fraud. and generally hires part-time workers who are paid for each registered name to canvas these areas. In this election cycle, many different groups, from journalists to the GOP, strongly criticized the integrity of the organization's registration methods. As early as September, state officials reported fraudulent voter registrations submitted by ACORN, and as of October 6th, the New York Times reported that about 400,000 ACORN filings had been rejected by authorities as duplicates, incomplete, or fraudulent. After comparing their voter registration rolls, Georgia, Florida, and Ohio found 112,000 duplicate voters registered in two states, and authorities have rejected ACORN applications attempting to register such "voters" as Mickey Mouse and the Dallas Cowboys' offensive line.

Notice that the Republicans stop short of saying voter fraud was actually committed. They do say flatly, however, that faulty registration forms submitted by ACORN amount to "serious attempts" to commit voter fraud.

But they don't offer a single piece of evidence to support even this reduced charge.
Not one citation given -- most of which are to columns by conservative opinion columnist John Fund, or to posts on the conservative blog Powerline -- leads to an example that contains any evidence whatsoever of an effort to actually commit voter fraud.

It's one thing for Fund or Sean Hannity to try to muddy up these distinctions in an effort to confuse people into believing that voter fraud actually exists in significant numbers. But it's pretty shocking when Senate Republicans do so.

Senate Judiciary Committee

New Senate Report On US Attorney Firings Finds Rove Helped Compile List

Zachary Roth | November 18, 2008, 12:25PM

The Justice Department already found, in its report on the U.S. Attorney firings, that the White House engineered the firings, and that inappropriate political concerns had played in to several of the dismissals.

Still, the Senate Judiciary Committee released a report on the episode today that goes a little further. Its "Majority" (that is, Democratic) section concludes:

The evidence...shows that the list for firings was compiled with participation from the highest political ranks in the White House, including former White House Deputy Chief of Staff Karl Rove.

The evidence shows that senior officials were focused on the political impact of Federal prosecutions and whether Federal prosecutors were doing enough to bring partisan voter fraud and corruption cases. It is now apparent that the reasons given for these firings, including those reasons provided in sworn testimony by the Attorney General and Deputy Attorney General, were contrived as part of a cover-up.

In a separate section, several committee Republicans strongly disagreed with that view, and, perhaps unsurprisingly, took the opportunity to highlight allegations of voter fraud against ACORN.

The report was released to accompany contempt resolutions against Rove and White House chief of staff Josh Bolten passed by the committee last year. The two have refused to testify or provide documents to the committee as part of its investigation.

In a statement accompanying the report committee chair Pat Leahy, of Vermont, said:

The findings of the Senate Judiciary Committee in the course of its investigation into the hiring and firing of U.S. Attorneys have been echoed by the Justice Department's own internal oversight offices. Further, the White House's unsupported claims of executive privilege and immunity designed to shield the President's advisors from complying with congressional subpoenas have been rejected by the federal court.

Interior Department

Bushies Burrowing Into Career Posts At Interior, Other Departments

Zachary Roth | November 18, 2008, 11:51AM

The Bush administration's days may be numbered, but some loyal Bushies are taking steps to worm themselves or their subordinates into the federal bureaucracy, so that they can't be dislodged by the incoming Obama administration.

The Washington Post reports:

Between March 1 and Nov. 3, according to the federal Office of Personnel Management, the Bush administration allowed 20 political appointees to become career civil servants.

In one example of what some Washington veterans call the "headless nail" phenomenon -- in which political appointees quietly move into career jobs ithin their departments, making it hard for the incoming administration to remove them -- David Bernhardt, the top lawyer for the Interior Department, has shifted six of his deputies into senior civil service positions. One of these, Robert Comer, was found by an internal DOI report to have struck an agreement on grazing with a Wyoming rancher "with total disregard for the concerns raised by career field personnel." Another, Matthew McKeown, has attracted criticism from environmentalists for promoting grazing and logging on public lands.

Bernhardt told the Post: "I believe these management decisions will strengthen the professionalism of the Office of the Solicitor and result in greater service to the Department of the Interior. However, the next solicitor and the department's management team are free to walk a different path."

But a career DOI official disagreed: "It is an attempt by the outgoing administration to limit as much as possible [the incoming administration's] ability to put its policy imprint on the Department of Interior."

Two Labor Department political appointees have also secured civil service jobs there.

This strategy is hardly unique to the Bush administration. In its final year of existence, the Clinton administration, says the Post, made 47 such moves, "including seven at the senior executive level."

Indefinite Detentions

Suit Charges U.S. Using Other Countries To Indefinitely Hold Terror Suspects

Zachary Roth | November 18, 2008, 11:14AM

The ACLU is today filing a suit alleging that the Bush administration has asked other countries to hold terror suspects whom the U.S. lacks the evidence to charge.

The poster boy for the case is Naji Hamdan, an American Muslim, who, reports McClatchy, has been held for nearly three months in the United Arab Emirates without charges, access to a lawyer, or contact with his family.

"If the U.S. government is responsible for this detention and we believe it is, this is clearly illegal because our government can't contract away the Constitution by enlisting the aid of other governments that do not adhere to the Constitution's requirements," an ACLU spokesperson told McClatchy.

An FBI spokesman said: "The FBI does not ask foreign nations to detain U.S. citizens on our behalf in order to circumvent their rights."

Hamdan served on the board of a Los Angeles mosque, and had originally been questioned by the FBI about possible ties to Osama Bin Laden as early as 1999. He moved with his family to the UAE in 2006, and was arrested by local law enforcement in August of this year.

Hamdan's family, which is bringing the lawsuit, says he's no friend of OBL. "Naji hates war. He hates what happened on September 11. He hates terrorism," his wife told McClatchy.

Blackwater

Blackwater Admits Probes Of Weapons Shipments

Zachary Roth | November 18, 2008, 10:04AM

Contracting giant Blackwater has confirmed the existence of multiple federal investigations into its work in shipping weapons to Iraq, reports Congress Daily.

The North Carolina company is facing separate investigations by a grand jury in the state, and by the State Department.

But in a statement, it took issue with some details from news reports last week. "The investigations ... do not allege that the company failed to obtain licenses or failed to ensure the government was aware of its actions," it said.

Rather, it said, "[t]he investigations concern Blackwater's not properly annotating the licenses, not timely submitting required reports, and not retaining required records."

Still, it essentially admitted the most eyebrow-raising charge -- that it had shipped weapons inside sacks of dog food -- saying that this was done to prevent theft.

Separately, federal prosecutors have drafted an indictment against Blackwater guards in connection with the deadly shooting of 17 Baghdad civilians last year, though no decisions on charges have been made.

Lobbyists

WaPo Parrots Industry Line On New "Privacy" Group

Zachary Roth | November 17, 2008, 5:39PM

Looks like The Washington Post got spun just a bit on a story about a new group said to be advocating for increased online privacy.

Under the milquetoast headline, "A New Voice in Online Privacy: Group Wants Tighter Rules for Collecting, Using Consumer Data", the paper reports:

A group of privacy scholars, lawyers and corporate officials are launching an advocacy group today designed to help shape standards around how companies collect, store and use consumer data for business and advertising.

Privacy scholars pushing for more online privacy makes sense. And "lawyers" could mean a lot of things. But exactly which "corporate officials" have an interest in tighter rules governing online consumer privacy?

Read on and things become clearer: The group, says the Post, is sponsored by AT&T, and will be led in part by Jules Polonetsky, "who until this month was in charge of AOL's privacy policy."

The paper adds:

Internet companies have come under fire for tracking consumers' online habits in order to tailor ads relevant to their interests. Lawmakers have held several hearings this year to examine online privacy protections.

President-elect Barack Obama has cited privacy as one of the technology issues his administration would address, setting the stage for a debate over standards for online publishers and advertisers. Obama also said he would appoint the first chief technology officer, who may be charged with making government data more transparent while protecting citizens' privacy. The Future of Privacy Forum will seek to work with the government on these issues.

So, reading between the lines, it's not hard to figure out what's going on here. Corporations understand that stricter privacy regulations are coming, no matter what they do. So they're trying to get out in front, by funding an advocacy group that appears to put them on the right side of the issue, but will almost certainly work to ensure that whatever reforms are put in place won't be too onerous for internet companies.

Not that that's unusual in Washington. But why should Post readers have to read between the lines to understand what's really going on?

Since the Post appears not to have bothered to look into the Future of Privacy Forum (FPF) much beyond reading and transcribing its press release, we asked the Electronic Frontier Foundation, a leading advocacy organization for the public interest in the online sphere, what they knew about the group.

In response, we hardly received a ringing endorsement of FPF's bona fides as an advocate for stricter privacy standards. "This is the first we've heard of this group, so we'll have to wait and see," an EFF spokesperson told us.

We should note, by the way, the San Francisco Chronicle did better in giving its readers an accurate picture of what's going on, reporting in the lede of its story:

AT&T is funding a group run by some of the nation's top privacy experts that aims to influence policy in the Obama administration and develop best practices on privacy for businesses.

John Conyers

Denying Congress Siegelman Docs, DOJ Gets Rumsfeldian

Zachary Roth | November 17, 2008, 5:08PM

The Justice Department is denying a subpoena from House Judiciary chair John Conyers for documents relating to the prosecution of former Alabama governor Don Siegelman.

Conyers is investigating whether the 2006 prosecution on corruption charges of Siegelman, a Democrat, was politically motivated.

In a letter sent Friday to Conyers, Principal Deputy Assistant Attorney General Keith Nelson writes that DOJ won't produce the documents in question, consistent with a department policy of not providing internal prosecution materials to Congress. Nelson makes the contorted argument that even though such documents in fact have been given to Congress in the past, that would not affect the decision on the Siegelman documents, because of supposed uncertainty about the facts of the other cases:

We do not believe that a possible departure from those policies in any given matter, the details of which may not be known or knowable at this point, requires us to set them aside in any other matter.

In response, a Judiciary Committee aide told TPMmuckraker:

Not sure when DOJ starting getting Donald Rumsfeld to write their letters, but I don't think the Committee's subpoena can be put off by some Justice Department Uncertainty Principle that refuses to answer Congressional oversight based on the unknowable nature of facts. In the end, this wrangling over oversight precedent misses the important point here - the Department's reputation is at a low ebb, and they should be working to clear away the clouds over the Siegelman case, not hunkering down and hoping they'll blow over.

At a 2002 press conference, Rumseld famously told reporters, in regard to whether Saddam Hussein had tried to pass weapons of mass destruction to terrorists:

[A]s we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.

Last week, we reported on new documents that have surfaced in the Siegelman case, showing, among other things, that the U.S. Attorney on the case -- who had recused herself because her husband is a top GOP operative who had run the gubernatorial campaign of Siegelman's GOP opponent -- continued to advise prosecutors.

In an interview with TPMmuckraker, Siegelman lamented what he called "outrageous criminal conduct" on the part of the US Attorney's office and main DOJ.

Barack Obama

Report: Top Obama Transition Staffer Led "Backdoor" Lobbying Campaign For Fannie Mae

Zachary Roth | November 17, 2008, 11:12AM

Change we can believe in?

Last week, the Obama transition team announced that it had tapped veteran Beltway Democrat Thomas Donilon to help lead its review of operations at the State Department. As multiple news outlets quickly pointed out, until 2005 Donilon helped oversee the aggressive lobbying operation of troubled mortgage giant Fannie Mae.

Now, ABCNews.com has fleshed out the picture a bit, reporting that Donilon oversaw what it describes as a "backdoor lobbying campaign ... to undermine the credibility of a probe into the firm's accounting irregularities."

The details, which center on a campaign to discredit an agency charged with overseeing the company:

The effort -- which reportedly included attacks on the funding for the oversight agency, the Office of Federal Housing Enterprise Oversight, and an attempt to launch a separate investigation into OFHEO itself -- was ultimately unsuccessful, and regulators eventually discovered top Fannie Mae executives had been manipulating the company's financial reporting to maximize their bonuses.

Donilon was not found to be involved in the financial manipulations, but he did help give Fannie's board the misimpression that the company was in good financial health, according to the OFHEO investigation.

Donilon did not comment to ABCNews.com.