In it, but not of it. TPM DC

The Minnesota election court just heard arguments on Norm Coleman's motion to declare illegal ballots that he had previously agreed were legal, and boy was it tense.

The Coleman camp sent up James Langdon, the member of the team who has best come across as sympathetic and sincere. "We understand that we stipulated, and we take that very seriously," Langdon said. "However, our research told us we could not stipulate to make something legal that was in fact illegal."

The claim here is that the court has ruled that only strict standards will be applied in letting in any new ballots. But some of those 933 previously-rejected ballots that were counted on January 3 wouldn't pass this test. Therefore, the Coleman camp says, these ballots must be culled, tying the ballot itself to the original envelope for potential un-counting.

Langdon went even further and said that the Coleman campaign has filed a motion to apply the court's standards to all absentee ballots that have already been counted -- that is, the absentees from Election Night.

This contains an obvious problem: All those previous absentees were de-coupled from their envelopes on Election Night.

So the Coleman camp is now attempting to create a legal trap for the court: Undo the February 13th ruling and let in all those votes we want, or we will insist that the result is illegal.

And really, even if those other voters are let in, the Coleman camp might turn around and still insist that the whole count is illegal.

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The stock market's rocky ride today, stoked by senior Democratic senators appearing to foreshadow bank nationalization, prompted White House spokesman Robert Gibbs to re-assert the government's lack of interest in financial takeovers.

"This administration continues to strongly believe that a privately held banking system is the correct way to go," Gibbs told reporters today.

The market proceeded to rebound slightly before closing lower, with the Dow 100 points down. Was Wall Street indicating skepticism about Gibbs' intentions? Not to Scott Talbott, chief lobbyist for the Financial Services Roundtable, which represents the market's biggest players in Washington.

Talbott is strongly opposed to and unconcerned about nationalization -- but he pointed out that the term remains undefined in the public discourse. "There are two ways to do this," he told me.

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We mentioned yesterday that Sen. John Cornyn (R-TX) was hanging onto the political donations he received from accused billion-dollar fraudster Allen Stanford.

But hold on! Cornyn seems to have reconsidered. The senator announced today that $4,000 would be donated to charity to offset contributions received from Stanford's company.

It's unclear how the $4,000 number was settled on, since Cornyn has received nearly $20,000 in Stanford-linked donations since 2000. But as chairman of the oft-cash-strapped Senate GOP campaign committee, Cornyn may have a serious need to hold onto all the contributions he can.

This leaves Rep. Pete Sessions (R-TX) as the other notable holdout from returning Stanford donations. Stay strong, congressman.

We've now found a case of lead Coleman lawyer Joe Friedberg actually being concerned about ballot fraud, and wanting to keep a vote out as a result -- so much so that he'll speculate about a Franken-voter being mentally disabled.

Really. No joke.

In court just now, lead Franken lawyer Marc Elias went over a rejected ballot envelope for which he said a power of attorney had been granted by a disabled voter, to allow a family member to fill it out. The issue was that the mark made to authorize the family member was not a signature or a conventional "X", but was instead an amorphous scribble. Elias and Goodhue County elections official Carolyn Holmsted spent some time hashing it out.

Then Friedberg took issue with this whole idea of the power of attorney to fill out a ballot, which is a specifically allowed clause in Minnesota law for disabled voters.

"And normally, people give powers of attorney because they're incompetent, mentally disabled," Friedberg began, before he was interrupted by a very loud objection from the Franken side.

"Your honor, this door was opened," Friedberg replied.

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Norm Coleman's legal filing from this morning, calling for the throwing-out of ballots he previously agreed were legal, really has the Franken camp angry. The new Franken filing in response doesn't just call for the Coleman lawyers' request to be denied, but goes further: "Contestants' effort to renege on the stipulation they freely entered and eviscerate the binding order of this Court warrants the imposition of sanctions." (Emphasis ours.)

The case here from the Franken camp is that the 933 absentee ballots in question should never have been numbered in the first place, as it violates the secret ballot -- they objected to it when the Coleman camp demanded it, but the Secretary of State's office did it, anyway. Thus, they said, they entered into a careful negotiation with the Coleman camp to stipulate that the ballots were all legal, and that the numbers would be blacked out. Now Coleman has declared the agreement null and void.

"As the Court is well aware, the February 3 Stipulation and Order was the product of lengthy negotiations between the parties," the filing said. "One key purpose of the Stipulation and Order was to settle a claim in litigation. Settlement agreements -- especially those turned into orders -- are highly favored by the courts."

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It is now quite possible that the political landscape in California, the single largest state in the Union and home to about 12% of the country's population, could undergo a transformation that would drastically change the ideological balance.

And it all comes down to political science. Like most other states, each party in California now holds its own primary to select a standard-bearer for the general election. (The parties are allowed to exclude registered independents.) Democrats always allow the indies in, while Republicans will often keep it closed. Left-wingers often win Dem primaries, and right-wingers win for the GOP.

But in exchange for his vote to pass the budget, moderate Republican state Senator Abel Maldonado demanded and received a provision setting a 2010 referendum to switch to something else called "Top Two," used in Louisiana and Washington state. All candidates run on the same primary ballot, and the top two candidates, regardless of party, advance to a runoff.

So in deep-blue districts there would be two Democrats, and deep-red districts would produce two Republicans. The relatively moderate candidates would then have the edge in those districts, which Maldonado says is needed to improve the legislative process. (In an interesting twist, the office of governor is exempted.)

A previous referendum on this proposal was held in 2004, but it failed 46%-54%. The Dems didn't even remotely want it this time -- Maldonado forced it in exchange for his budget vote.

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Hmmm ... let's say you were planning the schedule for Monday's Fiscal Responsibility Summit at the White House, and you were looking for candidates to talk about "Contracting and Procurement." Would you select the longtime defense-industry lobbyist who had to get an exemption from ethics rules in order to win his Pentagon post?

I only ask because Bill Lynn, the deputy defense secretary and former Raytheon K Streeter, will be one of those leading the "Contracting and Procurement" session (h/t to Ben Smith).

On another note, any thoughts about Treasury Secretary Geithner leading the "Tax" portion of the summit?

A series of recent reports, from the Journal to the Center for Responsive Politics (CRP), have offered staggering stats on the lobbying dollars paid out by banks, automakers, and other companies getting bailout money under the Troubled Assets Relief Program.

But all these numbers can be a bit befuddling in the aggregate. Is it really true, as the CRP states, that companies benefiting from the bailout have received a 258,449% return on their lobbying investments? Not really -- because lobbying expenditures are not broken down by topic area, there's no way to determine what portion of companies' K Street spending was dedicated to securing a slice of the bailout pie.

(For true TARP geeks, here's a great rundown of the cavalcade of legislation that sparked the lobbying interest of bailout participants.)

So what can we conclude about lobbying spending by bailed-out banks?

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We reported earlier this week that K Street's biggest financial players are urging the Treasury Department to assuage their concerns with the executive compensation limits that were added to the new stimulus law by Senate Democrats.

But Bloomberg adds an interesting wrinkle in its story today on the narrow room for Treasury to maneuver around the new compensation caps:

It's unclear whether the rules will apply to Public-Private Investment Fund, the Treasury's effort to remove the toxic assets clogging banks' balance sheets. The fund would offer government financing to help induce private investors such as hedge funds to purchase illiquid securities.


It's understandable that the executive-pay caps' applicability to hedge funds would be uncertain -- after all, their involvement in Treasury chief Tim Geithner's new public-private fund has yet to be fully determined. But Geithner has committed to spending some amount of taxpayer money in an attempt to coax private equity giants into buying devalued, mortgage-backed assets.

Whether or not that public money comes as part of the Troubled Assets Relief Program, it seems that the new executive-compensation limits are intended to apply to hedge funds who participate. Congress even included a sliding scale (read about it here) that would limit the pay caps based on how much each company received in taxpayer-funded benefits. If private equity succeeds in wiggling around the rules, one suspects that banks not participating in the TARP's capital purchase program will be next.

The Coleman campaign has just filed a very interesting motion in the election trial, changing their position for the fourth or fifth time on whether to count rejected absentee ballots -- and demanding that votes they've already stipulated as legal should be thrown out.

A review of the back-story is necessary. You might remember that the campaigns agreed during a statewide review of rejected absentee ballots that a group of 933 ballots were in fact legal and should be counted. Those ballots were counted on January 3, and they gave Al Franken a net gain of 176 votes. The Coleman campaign then started crying foul that some of these votes were really illegal and had to be thrown out.

When those votes were counted, numbers were affixed to the ballot envelopes and the ballots themselves, a just-in-case measure for if they would have to be thrown out again later on. Coleman later dropped this claim, and the election court's order to formalize this also commanded the Secretary of State's office to redact those numbers, in order to protect the secret ballot.

But now Coleman wants an order to stop the redactions, and to declare that some of these votes must be identified and thrown out. (ed. note: It is now too late to completely do this. See late update below.)

So Coleman was originally against counting them, then for it, then against it, then for it, and now against it, in that order.

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