CIA

Some Destroyed CIA Tapes Showed "Enhanced Interrogation Techniques"

Zachary Roth | March 6, 2009, 6:24PM

In new court documents filed today, the Justice Department acknowledged that twelve of the destroyed CIA interrogation tapes depict "enhanced interrogation techniques" -- what most people call torture -- the ACLU announced in a press release.

The government also said it would provide a list of summaries, transcripts, and memoranda related to the destroyed tapes, though the ACLU noted that a previous list was almost entirely redacted.

The CIA admitted earlier this week that it had destroyed 92 interrogation tapes. The destruction was ordered by then operations chief Jose Rodriguez.

In an earlier Freedom of Information Act request, the ACLU asked for information on the treatment and interrogation of detainees in U.S. custody. It filed a motion in December 2007 to hold the CIA in contempt for its destruction of the tapes, which it argued violated a court order requiring the agency to produce or identify all the records it was asking for.

Financial Crisis

Beat The Press?

Zachary Roth | March 6, 2009, 5:22PM

Here's some interesting Friday afternoon reading ... The Deal's Robert Teitelbaum on the question of how much blame the financial press deserves for the current mess we're in.

We don't agree with everything Teitelbaum says -- he goes too easy on the press in places -- but the notion you often see thrown around, that business reporters necessarily failed because they didn't "predict" the collapse has always struck us as simplistic, so it's refreshing to see someone trying to think a bit more deeply.

Don Siegelman

Siegelman: "The Fight Will Continue"

Zachary Roth | March 6, 2009, 3:53PM

Don Siegelman has responded to the appeals court ruling earlier today that upheld most of the charges of which he was convicted.

In a blast email message to supporters, Siegelman wrote:

I am disappointed, but not discouraged. The fight will continue.

He added:

My family and I are deeply appreciative of the outpouring of support and prayers. Your words and actions keep our spirits lifted and our resolve strong. We will get through this, and we will win.

Don Young

Don Young Aide The Latest To Be Indicted In Abramoff Scam

Zachary Roth | March 6, 2009, 3:30PM

Yet another indictment in the Jack Abramoff case...

The Justice Department has announced that Fraser Verrusio, the other Hill staffer who went on that 2003 Team-Abramoff-funded trip to the World Series -- including a trip to a strip club and a chauffeur-driven limousine -- has been charged with accepting an illegal gift, and failing to report it on his financial disclosure form.

Last November, Trevor Blackann, an aide to Sen. Kit Bond, pleaded guilty to failing to report that same trip.

Verusio was at the time a policy director on the House Transportation committee. According to the indictment, he accepted the trip in exchange for inserting into the Federal Highway bill amendments favorable to an equipment rental company, which had hired Abramoff's firm to lobby for it.

Todd Boulanger and James Hirni, two members of Abramoff's team, have already pleaded guilty in connection with the scheme.

The Transportation committee was at the time chaired by Alaska GOPer Don Young. So today's news may bring federal prosecutors closer to Young himself, whose ties to Abramoff and his firm have been amply documented.

We're guessing it won't be long before prosecutors announce a plea deal with Verrusio, in which he agrees to cooperate fully. Hope those strippers were worth it.

Don Siegelman

Court: No Jury Misconduct In Siegelman Case

Zachary Roth | March 6, 2009, 1:51PM

So what's the significance of the court ruling upholding most of the bribery and corruption charges on which former Alabama governor Don Siegelman was convicted?

Siegelman's appeal wasn't primarily focused on the allegations that his prosecution was politically motivated. (Bill Canary, the husband of Leura Canary, the US Attorney on the case, was a state GOP operative and close associate of Karl Rove, who had run the campaign of Siegelman's gubernatorial opponent.)

Still, today's ruling did touch tangentially on that set of issues. One of Siegelman's arguments on appeal was that there had been inappropriate contacts between jurors and prosecutors during the trial. That claim was of a piece with several allegations of prosecutorial misconduct detailed in an internal DOJ report -- including evidence that Leura Canary kept advising junior prosecutors on the case, even after recusing herself.

But the court appears to have rejected that claim, upholding a district court's opinion that no significant misconduct occurred.

As for Rove's alleged ties to the prosecution -- a witness has given sworn testimony that Rove was involved -- we'll hear his side of the story in the coming weeks, when he sits down with the House Judiciary committee to talk about both Siegelman and the US Attorney firings.

Don Siegelman

Siegelman Appeal: Court Reverses Two Counts, But Upholds Others

Zachary Roth | March 6, 2009, 1:12PM

The court that's hearing Don Siegelman's appeal of his conviction on bribery charges has reversed two of the counts of which the former Alabama governor was found guilty -- but upheld several others.

In an order issued today, a US appeals court reversed two counts related to Richard Scrushy's activities while on the state board to which Siegelman appointed him.

However, it upheld the several charges related to Siegelman's appointment of Scrushy to the board in the first place, which was found to have come in exchange for campaign contributions -- the heart of the case against Siegelman.

The court also ordered a new sentencing hearing, in light of the reversal of the two counts. It's unclear as yet how those reversals will affect Siegelman's sentencing.

We've put in calls to Siegelman and his lawyers, and will be back with more soon.

Karl Rove

Rove Lawyer: Testimony Won't Happen For "Several Weeks"

Zachary Roth | March 6, 2009, 12:24PM

So when exactly will Karl Rove have his big sit-down with the House Judiciary committee to reveal what he knows about the White House's involvement in the US Attorney firings?

According to Rove's lawyer, Robert Luskin, not for "several weeks." That's how long it will likely take, Luskin told TPMmuckraker, for both Rove and the committee to review the relevant documents and schedule the testimony. Luskin declined to give a more specific time frame.

The agreement securing Rove's testimony, announced Wednesday between Congress and the Bush administration, acknowledged this need for deliberation, declaring: "The interviews will be conducted as soon as possible consistent with needed preparation time and the availability of the witnesses and their counsel."

But Luskin did defend Rove's comments to FoxNews.com, published yesterday, in which he warned of a "show trial" and said that Democrats "would love to have me barbecued."

Arguing that Rove had legitimate concerns about the fairness of the process, Luskin referred to a comment made about Rove by Judicary chair John Conyers -- "someone's got to kick his ass." Luskin also said that Speaker Nancy Pelosi had told Rolling Stone that Rove might have to go to jail. (In fact, Pelosi said she foresaw Rove being prosecuted.)

"If you were the subject of that, you'd worry about the process too," said Luskin.

Luskin also confirmed to TPMMuckraker that he had played no role in the agreement, and was not kept closely informed about the progress of negotiations.

Bank of America

B of A: Revealing Merrill Bonus Info Would Cause "Irreparable Harm"

Zachary Roth | March 6, 2009, 11:07AM

We didn't get to this yesterday afternoon... but it looks like Bank of America is going to the mat to avoid telling Andrew Cuomo's investigation who got those controversial Merill Lynch bonuses.

B of A, reports Bloomberg, filed court documents yesterday claiming that revealing the identities of the lucky bonus recipients would cause "grave and irreparable harm" to the firm, because it would let competitors know which areas of B of A's business the company considers most valuable, and would therefore make it easier to steal B of A's top talent. It would also create "internal dissension and consternation," and could even create security risks for those named.

In other words, if it became known who we gave huge bonuses to in a year when Merrill collapsed, people would be so mad they'd physically attack them.

Does any of this even pass the laugh test?

Former Merrill CEO John Thain has already talked to Cuomo's team about the bonuses, after a judge ordered him to do. But its not clear what he said. B of A CEO Ken Lewis refused last week to turn over a list of who got the bonuses.

Merrill gave out the awards on an accelerated schedule last December, just weeks before the failed firm came under the control of B of A. Thain has since been fired.

Bradley Schlozman

Schloz-Backed Voter Fraud Lawsuit Bites The Dust

Zachary Roth | March 6, 2009, 10:47AM

Another nail in the coffin for those bogus GOP claims of voter fraud...

Remember how Todd Graves was fired as US Attorney for the western district of Missouri, after he wouldn't go along with a Bradley Schlozman-backed effort to sue Democratic state officials for failing to purge ineligible voters from the rolls, alleging that this failure could open the door to rampant voter fraud? The Bushies then moved Schlozman himself into Graves' position as US Attorney so that he could push the case personally.

Well, the case has quietly dragged on, after being dismissed by one court, then reinstated by another. But yesterday, lawyers for the Obama Justice Department asked a judge to drop the suit.

There wasn't much doubt by this point about the suit's bogusness, especially given what we've learned about Schlozman's politically motivated approach to his work both at main DOJ and as US Attorney. But now it's more or less official.

Another Republican claim of voter fraud bites the dust.

AIG

Who Are The AIG Counterparties? Here Are Some...

Zachary Roth | March 5, 2009, 4:58PM

Over at TPM, Josh has been doggedly highlighting the refusal of both AIG and the federal government to reveal the identity of AIG's counter-parties in its disastrous credit default swaps. And several lawmakers have in recent days pressed Tim Geithner and Ben Bernanke on the issue.

The question matters, of course, because AIG needed to make its most recent multi-billion dollar trip back to the public trough (that's over $160 billion in all for AIG, if you're counting) in order to pay back its creditors on those disastrous swaps -- and thereby, we're told, prevent a wider financial collapse. So identifying who those swaps were made with will tell us, in effect, who this latest portion of our money is ultimately going to.

It's worth noting, then, that, thanks to some great reporting from the Wall Street Journal and the New York Times, we do in fact have some preliminary information about who AIG's partners were on the swaps.

This Journal story from October 2008 names the following nine American and foreign banks as having bought swaps from AIG: Goldman Sachs; Merrill Lynch; UBS of Switzerland; Credit Agricole SA of France; Deutsche Bank of Germany; Barclays, and Royal Bank of Scotland Group, of Britain; and CIBC, and Bank of Montreal, of Canada.

Merrill is described by the Journal as a "big client" of the AIG unit that did the swaps.

By the end of 2007, with the value of the underlying assets plummeting, many of these banks had asked for collateral on the swaps, according to the Journal.

For instance, the paper reports that Goldman held swaps that insured about $20 billion of securities. In August 2007, Goldman demanded $1.5 billion in collateral from AIG. It ultimately got $450 million, then another $1.5 billion last October. At that point, says the Journal:

Goldman hedged its exposure by making a bearish bet on AIG, buying credit-default swaps on AIG's own debt.

That picture of Goldman's exposure jibes with a New York Times story from September 2008 about the credit default swaps, which reported that Goldman was AIG's "largest trading partner," and likewise gave a figure of $20 billion for Goldman's exposure to AIG.

The Times also implicates another domestic firm: JP Morgan (now JP Morgan Chase). In fact, it recounts that it was derivatives traders from that company that a decade ago, first brought to AIG's London-based financial products unit, run by Joseph Cassano, the ill-fated idea of doing credit default swaps.

It reports:

Ten years ago, a "watershed" moment changed the profile of the derivatives that Mr. Cassano traded, according to a transcript of comments he made at an industry event last year. Derivatives specialists from J. P. Morgan, a leading bank that had many dealings with Mr. Cassano's unit, came calling with a novel idea.

Morgan proposed the following: A.I.G. should try writing insurance on packages of debt known as "collateralized debt obligations." C.D.O.'s. were pools of loans sliced into tranches and sold to investors based on the credit quality of the underlying securities.

It's not 100 percent clear, then, that JP Morgan Chase is a current counter-party of AIG on the swaps -- but it certainly wouldn't be surprising.

That same Times story offers another hint, albeit a vague one, about the identity of the counter-parties.

While clients and counterparties remain closely guarded secrets in the derivatives trade, Mr. Cassano talked publicly about how proud he was of his customer list.

At the 2007 conference he noted that his company worked with a "global swath" of top-notch entities that included "banks and investment banks, pension funds, endowments, foundations, insurance companies, hedge funds, money managers, high-net-worth individuals, municipalities and sovereigns and supranationals."

What to make of all this? Well, here's one thing. As Josh has noted, the usual argument given against disclosing the identities of the counter-parties is that it would reduce public confidence in the banks that were named, with potentially disastrous consequences for their positions. But there's little evidence we're aware of that any of the banks named above suffered such an effect when, for instance, the Journal and the Times published their stories -- whose accuracy have not been questioned.

In fact, Geithner and Bernanke haven't deigned to explain their position in even this much detail -- so it's difficult to know whether there are factors we're not considering. But in the absence of a fuller explanation, we'll keep pressing...

Voting

Dem Bill Would Crack Down On Voter Caging

Zachary Roth | March 5, 2009, 2:26PM

The 2008 election may be over, but the voter suppression wars that went along with it certainly aren't.

Eleven Democratic senators led by Sheldon Whitehouse of Rhode Island today introduced a bill designed to make GOP operatives think twice about launching indiscriminate challenges on people's right to vote. The bill would outlaw challenges to voting eligibility that are based on unreliable information.

The bill appears targeted at the GOP's "caging" tactic -- in one manifestation of which, Republicans in Michigan and other states considered challenging the eligibility of voters who were on a list of people whose homes were subject to foreclosure.

It would also appear to cover the GOP effort we reported on in New Mexico last fall, in which the state party publicly announced its intention to challenge 28 mostly Hispanic voters, based on a grab-bag of suspicions. All of those voters were later shown to be valid.

Whitehouse said of the bill:

Last year's historic election proved that the right of an eligible voter to cast his or her vote is essential to our democracy.

The full press release, featuring quotes from many of the other senators, follows after the jump ...

Read more »

Andrew Cuomo

Cuomo Subpoenas More Of Merrill's Top Earners

Zachary Roth | March 5, 2009, 1:45PM

Yesterday, we noted a report in the Wall Street Journal that Merrill Lynch's top ten execs were each paid more than $10 million last year. The ten made slightly more than the top ten earners for 2007, despite the company's collapse last year.

Now, the Journal follows up by reporting that several of those execs have been subpoenaed in New York Attorney General Andrew Cuomo's investigation into Merrill's awarding of billions in bonuses.

Among the group are Andrea Orcel, who was Merrill's top investment banker, Thomas Montag, who led global sales and trading, and Peter Kraus, who ran strategy. They all now work at Bank of America, which took over Merrill after its collapse.

Another of the top ten, former Merrill CEO John Thain, has already spoken to Cuomo's investigators.

Bank of America, whose role in the bonus fiasco is also being scrutinized by Cuomo, filed a court petition yesterday to try to keep the pay information secret. B of A CEO Ken Lewis reportedly refused to answer investigators' questions on the subject when he met with them last week.

Barack Obama

The Scudder Memo: Half A Loaf Better Than None?

Zachary Roth | March 5, 2009, 12:14PM

Here's one other key aspect of the Rove-Miers testimony agreement that's worth noting...

The agreement declares that the famous "Scudder memo" will be made available "for Committee review only". In other words, the committee won't get to keep a copy, nor will it be able to release the memo publicly.

That seems at first like a significant concession.

The Scudder memo, to refresh your memories, appears to be a key piece of evidence in the effort to get to the bottom of the White House's role in the firings. Michael Scudder, an associate White House counsel, was tasked by White House staff with conducting an internal inquiry fully documenting the White House's involvement in the affair. He interviewed numerous White House and DOJ officials, including Rove. In their report on the firings released last year, Justice Department investigators identified the Scudder memo as one of the most crucial documents to which they lacked access, that might have helped them uncover the truth.

But it's not quite that simple. In an emailed statement to TPMmuckraker, a committee source explained why the committee settled for being able to review the memo only:

The Scudder memo was identified by OIG/OPR as a critical document even they could not get, and we would not have accepted a settlement that did not get us full use of the document in the interviews. At the same time, we do respect the need for White House lawyers to investigate rising controversies, and so we think the agreement works a fair compromise that won't limit our investigation or unduly burden any future Administration.

In other words, it sounds like one or both of the Bush and Obama White Houses were concerned, perhaps legitimately, about maintaining the ability to conduct internal reviews of controversial issues with the confidence that the results will remain confidential. And the committee felt willing to compromise on that point, as long as it was given adequate time to review the memo before it questioned Rove and Miers.

And of course, when transcripts of the testimony are released, we'll likely learn the key facts included in the memo anyway-- since they'll presumably be included in the committee's questioning and in the witnesses' responses.

On the related subject of the Obama White House's role in the deal, here's the cover letter that went with the agreement, written by Obama White House counsel Gregory Craig, and sent to Judiciary chair John Conyers, and President Bush's lawyer, Emmet Flood.

The letter, which notes that "both the Bush administration and the House Judiciary Committee have confirmed to me orally and in writing that they have accepted the terms of the enclosed Agreement."

In other words, as recent reports have suggested, the Obama White House was intimately involved in shaping this agreement -- a fact that would appear to explain the concern for maintaining the White House's ongoing ability to conduct confidential internal inquiries.

Justice Department

Anticipating Testimony, Rove Begins The Spin

Zachary Roth | March 5, 2009, 11:38AM

In his first public comments about the deal to secure his testimony on the US Attorney firings, Karl Rove told Fox News.com:

I understand they may be the hors d'oeuvres, but I'm the main course. Some Democrats would love to have me barbecued.

But beyond that eye-catching quote, something far sneakier came out of the interview. Rove used a curious argument to defend his role in the firings, saying:

If White House contact with the Justice Department is inappropriate, then what are we doing by allowing anybody who has anything remotely to do with the political campaign -- like the general counsel of the Obama White House -- to have any contact with the Justice Department?. I mean, we named the Justice Department building after the campaign manager of the 1960 presidential campaign - Robert F. Kennedy.

Leave aside the shot at Bobby Kennedy. Rove seems to be arguing that the White House's coordination with the Justice Department over the firings is comparable to any contact that the White House counsel might have with the department.

But as Rove knows, one of the concerns that the firings scandal brought up was the fact that the Bush White House allowed numerous White House staffers to talk to DOJ officials about the case. Democrats responded with efforts to limit those contacts -- and Rove certainly has never before expressed the view that those efforts didn't go far enough.

And while we're on the subject of Rove's mendacity, here's another point worth noting: Yes, Rove will testify under penalty of perjury. But he appears to have shown in the past that he's perfectly capable of dissembling even under such conditions.

In 2006, there was fevered speculation that Rove would be indicted for perjury for lying to Pat Fitzgerald's investigation into the Valerie Plame affair. Rove initially did not tell the grand jury about his conversation about Plame with Time's Matt Cooper (now at TPM!), claiming he forgot about it.

A New York Times story from 2006 lays out the details:

In his February 2004 testimony, Mr. Rove acknowledged talking to the columnist Robert D. Novak about Ms. Wilson, but he did not tell the grand jury about a second conversation he had about her with Matthew Cooper, a Time magazine reporter. Mr. Novak revealed her name and C.I.A. employment in a column on July 14, 2003.

Critics of the Bush administration have asserted that the revelation was retaliation against her husband, Joseph C. Wilson IV, a former diplomat who had publicly accused the administration of twisting some of the intelligence used to justify going to war with Iraq.

Mr. Rove later voluntarily told the grand jury about the conversation with Mr. Cooper, and said that he had forgotten about it in the rush of his daily business. But Mr. Fitzgerald has long been skeptical of Mr. Rove's account of his forgetfulness, lawyers in the case say.

So it wouldn't run counter to precedent if Rove again walked right up to the line of inviting a perjury charge when he testifies.

Something for Conyers and his team to be aware of, perhaps.

George Bush

Rove Can Claim Privilege Only When Asked About Bush

Zachary Roth | March 5, 2009, 10:16AM

We've obtained a copy of the agreement on Karl Rove and Harriet Miers' testimony about the US Attorney firings, and it appears to answer some of our initial questions.

Are any subjects off limits?

The scope of the interviews will be limited to: (1) facts relating to the evaluation of, decision to dismiss, or decision to replace the former U.S. Attorneys in question; the alleged decisions to retain certain U.S. Attorneys; and any allegations of selective prosecution related thereto; and (2) testimony or representations made by Department of Justice officials to Congress on the U.S. Attorneys matter. For the period beginning on March 9, 2007 (the date of the Committee's first written demand for information from the White House), interviews will not include the content of conversations involving: (i) Mr. Rove and members of the White House Counsel's office; or (ii) Ms. Miers and members of the White House Counsel's office. In the case of Mr. Rove, the interview also will include facts relating to the prosecution of Alabama governor Don Siegelman.

And when can Rove and Miers claim executive privilege?

As to official privileges, counsel will direct witnesses not to respond to questions only when questions relate to communications to or from the President or when questions are outside the scope of questioning set forth above.

You can see the whole thing here.

David Iglesias

Iglesias: Make Rove Testimony Public ASAP

Zachary Roth | March 5, 2009, 8:49AM

David Iglesias has responded to the news of a deal to secure Karl Rove and Harriet Miers' testimony about the firings of Iglesias and seven other US Attorneys.

In a statement to TPMmuckraker, Iglesias, whose firing as US Attorney for the district of New Mexico was deemed the "most troubling" by a Justice Department report released last year, said:

Today's agreement represents true progress in this matter which has been on-going for over two years. I trust that the initial private testimony of Mr. Rove and Ms. Miers will become public at the soonest possible date.

Justice Department

Pelosi: Rove Deal Is "Victory For The Constitution"

Zachary Roth | March 4, 2009, 6:40PM

House Speaker Nancy Pelosi and Senate Judiciary chair Pat Leahy just released separate statements on the agreement to secure Karl Rove's testimony.

Pelosi:

The agreement for Karl Rove and Harriet Miers to testify upholds a fundamental principle: no one is above the law and Congressional subpoenas must be complied with.

As public officials, we take an oath of office to uphold the Constitution. It is the institutional duty of Congress -- as an independent branch -- to ensure against abuse of power through meaningful oversight over the Executive Branch. When there are credible allegations about the politicization of law enforcement, the need for Congressional oversight is at its greatest.

In upholding our oaths of office, the House of Representatives was determined to preserve checks and balances -- the separation of powers that protects the rule of law. It brought action in court to enforce the Judiciary Committee's subpoenas, and won a major ruling by U.S. District Judge John Bates dismissing the extreme position of absolute immunity from Congressional oversight advocated by the Bush Administration for former Administration officials. Under this agreement, the precedent established by Judge Bates' historic ruling rejecting this extreme Bush Administration doctrine will be preserved.

Today's agreement is a great victory for the Constitution, the rule of law, and the separation of powers. I appreciate the strong leadership of Chairman John Conyers and the assistance of the Obama Administration.

Congress now has the opportunity to uncover the truth and determine whether improper criteria were used by the Bush Administration to dismiss and retain U.S. Attorneys.

Leahy:

I hope today's agreement will help to finally uncover the truth about the firings of U.S. Attorneys and the Bush White House cover up designed to shield from public view the inappropriate and illegal actions of the last administration.

It should not have taken until now to obtain testimony and documents from Bush administration officials connected to the investigation into the firings. Today's agreement leaves in place the court ruling that rejected the Bush administration's unprecedented and unfounded blanket claims of executive privilege and immunity. I rejected those claims as excessive and wrong in my ruling on President Bush's position over a year ago, and a bipartisan majority of the Senate Judiciary Committee ultimately found Karl Rove and former White House Chief of Staff Josh Bolten in criminal contempt.

I commend Chairman Conyers for the agreement reached today. I hope Congress, and the American people, will now finally hear long overdue answers to serious questions about political interference by the Bush White House in our nation's top law enforcement agency.

House Judiciary

The Rove Agreement: What We Still Don't Know

Zachary Roth | March 4, 2009, 6:24PM

The House Judiciary committee's announcement this afternoon of an agreement on Karl Rove and Hariet Miers' testimony about the US Attorney firings leaves a few key questions still unanswered:

1) The committee says: "It was agreed that invocations of official privileges would be significantly limited." Limited how? Exactly when can Rove and Miers invoke the privilege? The devil could very well be in that detail.

2) Did the committee agree to steer clear of any specific subjects?

3) Why won't Rove and Miers be under oath? It's true that they'll still be under penalty of perjury, and, when you're talking about a congressional investigation, that penalty is no different whether the subject is under oath or not. But in that case, why not just put them under oath to avoid any confusion? Presumably, because the Bush administration objected. And if it objected, then the oath question is meaningful. (Lawyers with relevant experience, feel free to weigh in here!)

We've called the Judiciary committee to put these questions to them, and will keep you posted.

John Conyers

Agreement Sets Stage For Rove Testimony On US Attorney Firings

Zachary Roth | March 4, 2009, 5:47PM

The House Judiciary committee just announced an agreement that it says will secure Karl Rove's testimony about the US Attorney firings.

The committee says in a press release that it has forged a deal with the Bush White House which will see Rove and Harriet Miers conduct transcribed interviews before the committee, under penalty of perjury, on the subject of what they know the about the White House's role in the firings. If the committee wants to follow up by with public testimony by requiring public testimony, it has reserved the right to do so.

By the terms of the agreement, Rove and Miers' ability to invoke executive privilege -- a privilege that President Bush has been claiming exists in perpetuity even after a president leaves office -- will be "significantly limited", though the announcement does not indicate the nature of those limitations.

The interviews won't technically be under oath. But since the criminal penalties for lying to Congressional investigators are the same whether or not the interview is conducted under oath, that's not seen as a major hurdle in getting to the truth.

In addition:

The Committee will also receive Bush White House documents relevant to this inquiry. Under the agreement, the landmark ruling by Judge John Bates rejecting key Bush White House claims of executive immunity and privilege will be preserved. If the agreement is breached, the Committee can resume the litigation.

And:

[I] the Committee uncovers information necessitating his testimony, the Committee will also have the right to depose William Kelley, a former White House lawyer who played a role in the U.S. Attorney firings.

Committee chair John Conyers called the agreement a victory:

I have long said that I would see this matter through to the end and am encouraged that we have finally broken through the Bush Administration's claims of absolute immunity. This is a victory for the separation of powers and congressional oversight. It is also a vindication of the search for truth. I am determined to have it known whether U.S. Attorneys in the Department of Justice were fired for political reasons, and if so, by whom.

Today was the deadline a court had set for the Obama administration to file a brief in the Miers-Bolten case, indicating whether or not it supports the Bush White House's claim of executive privilege. White House counsel Greg Craig has reportedly been working with the Judiciary committee and with former Bush White House officials to forge a deal.

Late Update: It's worth noting that TPMDC's Matt Cooper pointed to something like this outcome in a post from January...

Michael Steele

Report: More Questions About Steele's Campaign Payments

Zachary Roth | March 4, 2009, 4:38PM

Looks like Michael Steele's got more to worry about than his abject surrender to Rush Limbaugh the other day.

The RNC chair is also facing renewed questions about what looks like irregular campaign spending during his thwarted 2006 Senate bid in Maryland.

We told you a few weeks ago about allegations -- albeit from a convicted felon seeking reduced jail time -- that Steele's campaign made payments to a company run by his sister, for work that was never performed. FBI agents questioned Steele's sister about the issue, and the Steele camp still hasnt given explanations for the payments that add up.

Now, a local Maryland TV station reports on what sounds like a similar possible scheme. Both Steele and fellow GOPer Bob Ehrlich -- who was running at the time to hold on to the governorship -- made payments from their campaigns to a firm called Allied Berton, according to campaign finance records.

As the news channel, WBAL, reports:

The firm's Web site said it was in the business of trading commodities, such as minerals, metals, coffee and sugar. But the campaign payments it received, according to the candidates' accounting, were for a wide range of other activities, according to campaign filings.

It continues:

Steele's Senate campaign made four payments to Allied Berton in October and November 2006 totaling more than $64,000. Each of those expenses was listed as political consulting, according to campaign filings.

The company is run by Sandy Roberts, a well-connected Republican who held a party for Steele at the 2004 Republican National Convention in New York.

A Steele spokesman offered no better explanation for these payments than it has for the payments to Steele's sister -- saying only that Steele's campaign followed all FEC rules.

As for the Ehrlich camp, it said that the payments might have been for those homeless election day workers that the Republicans bussed in from Philadelphia to give the illusion of African-American support.

Why the GOP would have entrusted that task to a commodities trading firm was not explained.

Arlen Specter

Too True! Specter and Cornyn Oppose Truth Commission

Zachary Roth | March 4, 2009, 3:57PM

GOP senators Arlen Specter and John Cornyn are leaving no doubt where they stand on Senate Judiciary chair Pat Leahy's proposal to create a Truth Commission to look into the Bush administration's war on terror policies.

They oppose it.

In a press release the pair sent out, Specter said:

When this idea of the so-called 'truth commission' first surfaced I said it was unnecessary because you had a change of administration, you could walk in the front door, ask for directions to the relevant filing cabinet, go in and open the drawer and find out anything you wanted to know. Well that's been done. And it's being done to a greater extent. You had some rather startling disclosures with the publicity in recent days about the unusual, to put it mildly, legal opinions which were issued to justify executive action.

Cornyn added:

I oppose the creation of a so-called 'truth commission' because it is a redundant and politically divisive exercise that would distract the Executive, Congress, and the American people at a time when we should be focused on reinvigorating our economy and winning the war on terror. This roving, unaccountable inquisition into each and every grievance with a Bush Administration policy is a backward-looking proposition that is directly at odds with President Obama's stated goals of unity and moving forward. Now is not the time for government to waste more of taxpayers' money by outsourcing a core Congressional responsibility.

It appears these senators can't handle the truth.

Bank of America

Merrill's Top Ten Earners Made More Last Year Than In 07

Zachary Roth | March 4, 2009, 1:23PM

"While Merrill staggered, 11 top executives were paid more than $10 million in cash and stock last year, say people familiar with the situation," reports the Wall Street Journal.

Amazingly, the top ten earners at the company in 2008, according to the paper, made slightly more than the top ten in 2007: $209 million, up from $201 million.

Remember, as you think about that, what happened to Merrill last year. It collapsed -- so wrecked by its investment in toxic mortgage assets that it had to be taken over by Bank of America. Then, even after that deal had been announced, it absorbed such massive fourth quarter losses that B of A needed $20 billion from the Treasury to digest Merrill.

None of that, of course, stopped Merrill, under then-CEO John Thain, from dishing out billions in bonuses late last year -- a decision currently being probed by New York Attorney General Andrew Cuomo.

On that front, the WSJ reports that B of A plans to file a court motion today to try to keep the compensation data from becoming public. But Cuomo will counter with his own motion arguing it should be released.

The paper also has some good thumbnails of these high-rollers:

Thomas Montag: Started as head of global sales and trading at Merrill in August and now heads global markets at Bank of America. He was handed a $39.4 million pay package and Merrill stock awards valued at approximately $50 million. The stock awards were issued to replace stock he held in Goldman Sachs Group Inc., his previous employer.

Andrea Orcel: A top Merrill banker who now heads international corporate and investment banking for Bank of America. He got $33.8 million in 2008, down from approximately $36 million in 2007. His 2007 package included a special $12 million bonus for advising Royal Bank of Scotland Group PLC and other acquirers of ABN Amro Holdings NV, a now-troubled deal.

Peter Kraus: Hired as head of strategy at Merrill in September and was given a $29.4 million contract and Merrill stock to replace his holdings in Goldman, where he used to work. He is now the chief executive officer of investment management firm AllianceBernstein. (Ed note: We wrote about Kraus's $37 million Park Avenue apartment here.)

David Gu: Head of rates at Merrill; now heads global rates and currencies at Bank of America. He made $18.7 million in 2008, down from $19.8 million in 2007.

David Goodman: Co-head of global commodities at Merrill and Bank of America. Got a two-year employment guarantee from Merrill in 2007, paying him $16.5 million in 2007 and another $16.5 million in 2008.

Pat Leahy

GOP Witness: By Historical Standards, Bushies' War On Terror Conduct Was "Exemplary"

Zachary Roth | March 4, 2009, 12:13PM

The Senate Judiciary committee is currently holding hearings on that proposal from committee chair Pat Leahy to set up a Truth Commission to look into the Bush administration's war on terror.

We'll have more to say on this whole subject soon, but for now it's worth noting that, as you'd expect, Bush allies are fighting hard to stymie Leahy's idea.

Just now, the committee heard from David Rivkin, a lawyer who served in the Justice Department and the White House under Presidents Reagan and George H. W. Bush.

Explaining why he opposed Leahy's proposal, Rivkin declared:

Yes, mistakes were made. Yes, some bad things happened. But compared with the historical baseline of past wars, the conduct of the United States in the past eight years ... has been exemplary.

We're sure that victims of torture under the Bush administration would appreciate Rivkin's willingness to supply that historical context.

Sen. Sheldon Whitehouse (D-RI) certainly didn't. He told Rivkin:

I would suggest, Mr. Rivkin, that until you know, and we all know, what was done under the Bush administration, you not be so quick to throw other generations of Americans under the bus, and assume that they did worse.

Late Update: Here's the video:

Bank of America

NYT On The Theresa Hatt Phenomenon

Zachary Roth | March 4, 2009, 11:37AM

It looks like the New York Times liked our Theresa Hatt story.

That was the one about how a Bank of America estates rep tried to guilt-trip the son of a deceased card-holder into paying his mother's credit-card balance, though he was under no obligation to do so. We also spoke to a former B of A collections rep, who told us such techniques were encouraged.

And today the Times reports on a debt-collection firm that contracts with credit-card companies to go after the relatives of people who died with outstanding debts.

The paper makes clear that in most cases -- like the one we highlighted -- the relatives have no legal obligation to pay up. Not that that's made clear, of course:

Scott Weltman of Weltman, Weinberg & Reis, a Cleveland law firm that performs deceased collections, says that if family members ask, "we definitely tell them" they have no legal obligation to pay. "But is it disclosed upfront -- 'Mr. Smith, you definitely don't owe the money'? It's not that blunt."

Collection agents at the firm, DCM, use some sophisticated techniques.

New hires at DCM train for three weeks in what the company calls "empathic active listening," which mixes the comforting air of a funeral director with the nonjudgmental tones of a friend. The new employees learn to use such anger-deflecting phrases as "If I hear you correctly, you'd like..."

"You get to be the person who cares," the training manager, Autumn Boomgaarden, told a class of four new hires.

Often, they succeed:

Brenda Edwards, one of DCM's top collectors, spoke with a woman in New Jersey about her mother's $544.96 credit card bill.

"She had no will, no finances, nothing," the daughter said. "Nothing went to probate." The $200 in the checking account was used for funeral expenses. But the woman also said the family "filed a form with the county," indicating that perhaps there was a legal estate after all.

"Is anyone in the family in a position to pay this?" Ms. Edwards asked, adding: "I'm not telling you it needs to be paid at all."

The woman reached a decision. "I will talk to my brothers and sisters and we will pay this," she said.

DCM's chief executive makes clear that right now, collecting even on small debts is crucial for credit card behemoths. "The financial services industry is under a tremendous amount of pressure, and every dollar we collect improves their profitability," he tells the Times.

But given the parlous state of the industry, those collectors had better be working overtime.

PERMALINK | COMMENTS (4) | RECOMMEND RECOMMEND (6)
Topics: Bank of America, Financial Crisis, Wall Street

Allen Stanford

Texas Paper On Cornyn and Sessions' Stanford Ties: "What Were They Thinking?"

Zachary Roth | March 4, 2009, 11:05AM

Are lawmakers who took those Antiguan junkets on Allen Stanford's dime paying a political price back home?

It's hard to say. But John Cornyn and Pete Sessions, the Texas GOP senator and congressman respectively, can't be psyched about this Dallas Morning News editorial.

"What were they thinking?" asks the piece in its lead, pointing out that Cornyn and Sessions must have known when they accepted those trips that Stanford would have been looking to curry favor.

The editors conclude, a bit lamely:

Sessions and Cornyn have donated $9,000 of those funds to charity. They would be wise to donate the rest - and to use better judgment next time.

The paper might have added that Sessions would also be wise to ensure that his staff doesn't misinform reporters about the nature of the congressman's relationship with Stanford.

Still, it's a start.

John Yoo

More OLC Memos To Come?

Zachary Roth | March 3, 2009, 4:16PM

Some followup by the New York Times on the Bush-era OLC memos released yesterday by the Justice Department...

Department officials have told the paper that they may soon release more secret opinions about counter-terror tactics. Those that contain classified information will need to be cleared with other government agencies before they can be released.

Separately, some Democrats are jumping on the controversial memos to bolster their argument for a commission to look into the Bush administration's counter-terror policies.

Senate Judiciary chair Pat Leahy, who has called for such a commission, put out a statement Monday that praised the Justice Department for releasing "some of these long-secret opinions." But it also argued that a "fuller review of these policies" by the new Obama team was needed.

And Sen. Sheldon Whitehouse said: "These memos appear to have given the Bush administration a legal blank check to trample on Americans' civil rights. We need to get to the bottom of what happened at O.L.C. and ensure it never happens again."

Also, the Times picks up on that footnote in the Steven Bradbury memo that we highlighted earlier. Reports the paper:

In a footnote to Mr. Bradbury's Jan. 15, 2009, memorandum sharply criticizing Mr. Yoo's work, Mr. Bradbury signaled that he did not want his repudiation of the legal reasoning employed by Mr. Yoo to be used against Mr. Yoo as part of the ethics probe.

Mr. Bradbury wrote that his retractions were not "intended to suggest in any way that the attorneys involved in the preparation of the opinions in question" violated any "applicable standards of professional responsibility."

Allen Stanford

Stanford Victims Starting To Emerge

Zachary Roth | March 3, 2009, 2:37PM

Just as happened in the Bernard Madoff scandal, we're now starting to hear some heart-wrenching stories from the victims of Allen Stanford's alleged fraud.

One older couple told their tale of woe to a North Texas TV station:

Marsha and Arlie Carter always planned to live out their golden years in Rainbow, Texas, outside Dallas. They sold their software company -- the business they built together from nothing -- to finance their dream.

"We hoped to pass it down to my kids and grandkids," Marsha said.

Then, last month, they turned on the news and learned the company their broker worked for was entangled in a case of massive alleged fraud. All the money associated with Stanford Financial Group was frozen, including about 30,000 brokerage accounts.

That's where the Carters were keeping most of the money they had saved.

"There's a possibility that we might lose the house if we can't have enough income to make the payments on it," Marsha Carter said.

Less tragically, the Dallas Morning News reports that many clients who had brokerage, money-market or mutual fund accounts with Stanford can't get to their money because those accounts have been frozen by a court-appointed receiver.

Reports the paper:

Mark Choate, chief executive of an irrigation landscape company, has a brokerage account that's been frozen for two weeks. "During that time," Choate says, "the stock market has been dropping like a rock, and I haven't been able to do anything about it."

A lawyer for clients like these tells the DMN:

A guy called me Thursday who has all of his net worth tied up in a construction project and meets his payroll through his Stanford accounts. He said, 'Larry, if I don't have access to that money, all these people aren't going to get paid. My construction project will go kaput, and my whole life will be in ruin.'

There's even a suggestion that Stanford may have swindled some of those West Indian cricket players who "won" $1 million each after beating England in a Stanford-organized match last year. In an interview conducted before Stanford's alleged fraud came to light but published this week, one player told (sub. req.) the New Yorker that he had left his prize-money in Stanford's bank, after the billionaire assured him and other players that he would keep it safe.

Meanwhile, a showdown has quietly been brewing, reports the Associated Press, between that court-appointed receiver, Texas lawyer Ralph Janvey, and the government of Antigua, where the Senate voted Friday to seize Stanford's property.

Stanford is Antigua's largest private employer, with about 800 people working for him. So the country's officials are anxious to keep Stanford's businesses in operation, rather than allowing Janvey to use the assets to pay back swindled investors.

Looks like this story could be with us a while...

Steven Bradbury

Is Footnote In OLC Memo Designed To Protect Its Author?

Zachary Roth | March 3, 2009, 12:41PM

There's an interesting detail buried in those OLC memos released yesterday, that perhaps hasn't gotten the attention it deserves.

In the January 15, 2009 memo written by then-acting OLC head Steven Bradbury -- in which he repudiated many of the previous OLC memos that articulated an expansive view of presidential power in the war on terror -- there's a footnote stressing that the memo is not "intended to suggest in any way that the attorneys involved in the preparation of the opinions in question did not satisfy all applicable standards of professional responsibility."

Why would Bradbury have gone out of his way to make this point -- especially in the context of repudiating those opinions?

Perhaps because the Justice Department's Office of Professional Responsibility has been working on a report on whether OLC lawyers violated standards of professional responsibility when they approved harsh interrogation tactics like water-boarding. And, as Newsweek revealed last month, a draft of the report is sharply critical of three senior OLC lawyers in particular -- John Yoo, Jay Bybee, and Steven Bradbury.

The report's release was delayed after then-Attorney General Michael Mukasey and his deputy Mark Filip objected that responses from Yoo, Bybee, and Bradbury should be included. As of February 6, Attorney General Eric Holder had not yet reviewed the report, and it had not yet been turned over to Congress.

So the fact that the earlier memos have been repudiated could potentially still affect the OPR report's conclusions about the lawyers' actions. As a result, Bradbury would have had good reason to explicitly state in his recent OLC memo that the repudiation of the original opinions did not bear on issues of professional responsibility.

It'll be interesting to see, when the OPR report is released, whether its authors agree with that take.

John Yoo

Experts Weigh In On Bush Justice Memos

Zachary Roth | March 3, 2009, 11:53AM

So what to make of those Bush administration legal memos, formulating counter-terrorism policy, that the Justice Department released yesterday?

The key news seems to be that at least ten of the opinions issued by the department's Office of Legal Counsel in the early years of the War on Terror -- outlining an expansive view of executive power -- were later deemed flawed and ordered withdrawn. We had previously known that this had occurred with just two such opinions.

In one memo, John Yoo argued that during wartime, the president could ignore free speech protections and could order warrantless searches. In another, the Bush DOJ claimed that detainees could be sent to countries that commit human rights abuses, as long as the US did not intentionally seek their torture. Five days before Bush left office, both of these opinions and several others were repudiated in a separate "memorandum for the Files" by Stephen Bradbury, then the acting head of the Office of Legal Counsel. That document was also released yesterday.

Other Bush administration memos that were later withdrawn argued that the president could unilaterally abrogate foreign treaties; could ignore guidance from Congress in dealing with terrorist suspects being detained; and could conduct warrantless wiretapping.

Since the release of the memos yesterday, expert opinion has essentially been united in denouncing the opinions.

Walter Dellinger, who ran OLC during the Clinton administration tells the New York Times that the Bradbury memo "disclaiming the opinions of earlier Bush lawyers sets out in blunt detail how irresponsible those earlier opinions were."

Jennifer Daskal of Human Rights Watch speaking to the Washington Post, singles out the memo that allowed the administration to send detainees to countries that commit human rights abuses. "That is [the Office of Legal Counsel] telling people how to get away with sending someone to a nation to be tortured," Daskal said. "The idea that the legal counsel's office would be essentially telling the president how to violate the law is completely contrary to the purpose and the role of what a legal adviser is supposed to do."

Orin Kerr, a law professor at George Washington, focuses on the memo that gave the administration the power to conduct warrantless wiretapping. Writing on the blog The Volokh Conspiracy, Kerr calls the argument that FISA doesn't apply to national security issues -- which appears to be the memo's argument -- "an extremely lame analysis." He continues: "Much of the point of FISA was to regulate that."*

And Salon's Glenn Greenwald is particularly outraged by an opinion arguing that the president can deploy the US military inside the US, directed at both foreign nationals and US citizens. Greenwald calls this "nothing less than an explicit decree that, when it comes to Presidential power, the Bill of Rights was suspended, even on U.S. soil and as applied to U.S. citizens."

He concludes:

If this isn't the unadorned face of warped authoritarian extremism, what is?

* This paragraph has been corrected from an earlier version which reported incorrectly that the blog post was written by Eugene Volokh.

John Sununu

Sununu: New Board Membership Doesn't Conflict With TARP Oversight Work

Zachary Roth | March 3, 2009, 10:51AM

John Sununu has denied the charge that he has a conflict of interest in regard to his work on the Congressional Oversight Panel for the TARP funds.

Over the weekend, we reported that the former New Hampshire GOP senator has joined the board of a firm that's an affiliate of Bank of New York Mellon -- which, in addition to receiving bailout funds itself, has contracted with the Treasury Department to help administer the program.

Yesterday, the Associated Press picked up the story, and got a response out of Sununu.

"ConvergEx Group is an independent company," Sununu said in an e-mail Monday. "It is not eligible to apply for or receive funds through any programs established under TARP." He pointed out that the bank "holds a minority position only" with ConvergEx.

That's a 33.8 percent stake to be exact, the AP reports. Not enough for Bank of New York to control ConvergeEx, but perhaps enough so that ConvergeEx's interests are at least somewhat affected by the TARP program.

Separately, a spokeswoman for the COP told TPMmuckraker that the panel has not yet formally addressed the issue, since it not met since Sununu's appointment to ConvergeEx's board was announced last week. We'll keep you posted if and when it does.

Barack Obama

Not Another One! Now Trade Rep Pick Has Tax Issues

Zachary Roth | March 2, 2009, 5:14PM

Here we go again...

Ron Kirk, the former Dallas mayor picked by President Obama to be US Trade Rep, has tax problems. Senate finance committee staffers told members of the committee that Kirk underpaid on his taxes by almost $10,000 from 2005 to 2007. He has agreed to file adjustments.

According to National Journal's Congress Daily:

The underpayments deal in part with speaking honoraria he received that he listed as charitable donations to his alma mater, Austin College.

Kirk instead should have reported the honoraria as taxable income and then deducted the donations. The panel also asked Kirk for substantiation of other charitable donations he has made, including a television set, and it has questioned Kirk's write-offs of business expenses, including those for Dallas Mavericks season tickets.

Finance chair Max Baucus seems to be standing by Kirk. Baucus issued a statement saying Kirk "is the right person for this job and I will work to move his nomination quickly."

But something tells us that's not going to be the last word here.

Allen Stanford

In Stanford's Wake, Levin Announces New Improved Tax Haven Bill

Zachary Roth | March 2, 2009, 5:01PM

Remember that bill we told you about last week, the one that was designed to crack down on offshore tax havens and might have helped stop Allen Stanford's alleged $8 billion scam? Well, it's back.

As we reported, the bill, introduced in 2007 by Sen. Carl Levin, died in the Senate Finance committee. A committee aide later told us that Committee chair Max Baucus never took it up because he favored a different approach to the problem.

But now Levin -- joined by Senators Sheldon Whitehouse, Claire McCaskill, D-Mo. and Bill Nelson -- has come back with an improved version of the legislation, the "Stop Tax Haven Abuse Act."

According to a press release, the bill now has three new provisions, that would:

(1) treat foreign corporations managed and controlled in the United States as domestic corporations for income tax purposes; (2) close an offshore tax dividend loophole that enables non-U.S persons to dodge payment of U.S. taxes on U.S. stock dividends; and (3) expand the tax return reporting requirements for passive foreign investment corporations (PFICs) to include U.S. persons who don't own a PFIC, but have formed, sent assets to, received assets from, or benefitted from a PFIC.

Baucus has already announced that he intends to introduce his own version of the legislation, that's more targeted at giving the IRS the tools it needs to detect tax cheats. So we'll have to see how that plays out.

But it seems like one silver lining in the Allen Stanford case is that it's gotten lawmakers into gear to try to fix the problem once and for all.

Bank of America

B of A's Lewis: Actually, Taking Public Money Was A Mistake

Zachary Roth | March 2, 2009, 4:34PM

Ken Lewis, the embattled Bank of America CEO, has told the Financial Times that taking $20 billion of government money to help it digest Merrill Lynch's losses was a "tactical mistake."

Lewis told the paper that the move made B of A appear as weak as Citigroup.

He also said that he intended to stay on atop B of A until the firm had paid the government back the $45 billion in total it has received from taxpayers, saying that could happen in 2-3 years.

Lewis has seen calls for his resignation over the mishandled Merrill merger. Merrill's massive losses in the fourth quarter of 2008 forced B of A to go to the federal government for help. Merrill's billion-dollar bonus awards, which are currently being probed by New York Attorney General Andrew Cuomo, have not helped the situation. Lewis recently stayed mum when questioned by Cuomo's investigators about what he knew about the bonuses.

Allen Stanford

Stanford Provided Majority Of Funds For Group That Sponsored Lawmaker Junkets

Zachary Roth | March 2, 2009, 12:34PM

From the start of the Allen Stanford mess, we've sort of had a hunch that the Inter-American Economic Council -- which paid for several Caribbean junkets and other events for US lawmakers -- was largely a creature of the Texas billionaire. And that hunch is looking increasingly accurate.

The Dallas Morning News reports that in 2005, the year the IAEC funded that big trip to Antigua for lawmakers of both parties that we posted pictures of, Stanford Financial provided 85 percent of the IAEC's revenue, according to its president, Barry Featherman.

Featherman also told the DMN that the IAEC raises no money except for the funds it receives from sponsors like Stanford for specific events. In other words, the organization exists, it appears, only to hold events with public officials.

And Featherman added that the group hasn't paid for any trips since 2007, thanks mostly to ethics rules passed by the new Democratic Congress early in that year, which banned House members from accepting free trips on private planes.

There are some other interesting nuggets in the DMN story. The paper reports that Tom DeLay "made at least 11 trips on Stanford planes between 2003 and 2006, according to federal campaign finance records."

And remember how the office of Texas GOP congressman Pete Sessions first claimed that Sessions didn't know Stanford personally -- a claim that was undone when we posted pictures of the two men schmoozing on that 2005 trip to Antigua? Well it looks like Sessions was getting more than just a nice Caribbean trip out of Stanford. The DMN reports that in 2004 when, thanks to redistricting, Sessions was in a razor-tight race to hold onto his Congressional seat against the powerful incumbent Democrat Martin Frost, Stanford's company came to the rescue, giving $37,875 in the final weeks of the race.

Separately, it looks like Team Stanford is staying mum on the charges that it orchestrated an $8 billion fraud. James Davis, Stanford's college roommate and the number two at Stanford Financial, who has also been charged in the SEC complaint, took the Fifth last week under questioning by agency investigators.

And last week, Laura Pendergest-Holt, the company's chief investment officer, was charged with criminally obstructing the SEC probe. The FBI filed court documents claiming Pendergest-Holt made "misrepresentations" about her knowledge of Stanford's investment portfolio, and about whether she met with other Stanford officials to prepare for her testimony. The charge may be evidence that the government is trying to flip Pendergest-Holt to testify about Stanford himself.

The Daily Muck

Zachary Roth | March 2, 2009, 9:53AM

A charity co-founded by Sen. Orrin Hatch (R-UT) -- a key Congressional champion of the pharmaceutical industry -- has received over $172,000 in contributions from drugmakers. Hatch's son has also been hired as a lobbyist by the industry. Big Pharma's contributions only came to light because the IRS mistakenly released a confidential tax filing to a nonprofit last year. Good government advocates say that points up the need for stronger disclosure laws. (Washington Times)

Court documents released in the Dusty Foggo case show that in 2005, Foggo and defense contractor Brent Wilkes had dinner at Washington's Capital Grille with then-Majority Leader Tom DeLay, and then-House Appropriations Committee chair Jerry Lewis, according to a report by the journalist Seth Hettena. Lewis has since claimed not to remember seeing Wilkes -- who pleaded guilty to bribing former GOP congressman Duke Cunningham -- in ten years. (SethHettena.com)

Erik Prince, the founder of Blackwater Worldwide -- now known as "Xe" -- has announced he is stepping down as CEO of the parent company. Though Prince will remain chairman, he'll no longer be involved in the day-to-day running of the firm he founded 11 years ago. Five former Blackwater guards are scheduled to stand trial for a shooting incident in a Baghdad Square that killed 17 Iraqi civilans in 2007. And both the State Department and Iraq recently declined to renew the company's license to operate in that country. "I'm a little worn out by the whole thing, the politics of it all," Prince said. (Wall Street Journal).

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