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It seems the GOP

It seems the GOP really doesn't like those ads Montana Democrats are running in the state explaining Sen. Conrad Burns' (R) ties to Jack Abramoff. So they're taking up that increasingly familiar Republican campaign tactic: threaten the stations' campaign managers with a lawsuit if they don't stop running the ads. Crooks & Liars has a copy of the letter.

A TPM Reader takes

A TPM Reader takes a stab at the $9,000 <$NoAd$> check mystery ...

Regarding the Jack Abramoff/Guam Superior Court embroglio, I think you're barking up the wrong tree. There probably is some illicit "structuring" going on, but it's likely by the Guam court officials, not Abramoff. This is all surmise, of course, but anyone who has ever had "signature authority" in a corporation usually also has had dollar limits on that authority (that is, a limit on how much they can authorize without sending it to a superior/supervisor).

Sure enough, when you look at the Guam procurement code, section 5213 states, "Small Purchases. Any procurement not exceeding the amount established by regulation may be made in accordance with small purchase procedures promulgated by the Policy Office, provided, however, that procurement requirements shall not be artificially divided so as to constitute a small purchase under this Section."

Now, your posts mentioned that the Guam Supreme Court is trying to do something that, evidently, the Superior Court judges or administrators disagree with. The Superior Court people may not want to come right out and ask for $300,000 to lobby against the Supreme Court people (Guam's a small place, maybe it's bad politics, who knows?), and so they use administrative procedures to mask what they're doing. How much do you want to bet that the "amount established by regulation" is $10,000? Assuming that's the case, if you wanted to hide a procurement contract in plain sight, you'd make sure that the payments were each below the "amount established by regulation" in order to avoid having to make a procurement request up the chain of command.

Note, by the way, that the procurement code prohibits exactly that conduct. Thus, if Abramoff or his intermediary in California was aware of that, they could be accessories to some kind of violation in Guam, but without doing further research, it would be impossible to know that for sure.


More on this to come.

More on that money

More on that money funnelled to Jack Abramoff from Guam.

To recap the details, Abramoff's clients in Guam paid him $324,000 in 36 separate checks for $9,000. They didn't pay it to him directly but used a Laguna Beach, California attorney, Howard Hills, as the cut-out. The Guam clients sent the money to Hills; Hills sent it on to Abramoff, etc.

Now, as we also noted, the $9,000 number jumps out because it's just shy of $10,000. And banks must report all transactions over $10,000 to federal regulators.

I was curious whether bundling payments like this is a crime even if there's no other criminal activity tied to the transaction. And the answer seems to be: absolutely.

The law in question is 31 USC 5324(a). The relevant language reads: "No person shall, for the purpose of evading the reporting requirements ... structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions."

For the non-lawyers among us, the crime of "structuring" is put into more colloquial English in this government Bulletin on financial crimes: "Designing a transaction to evade triggering a reporting or recordkeeping requirement is called “structuring.” Structuring is a federal crime, and must be reported by filing a Suspicious Activity Report (SAR)."

The bulletin provides this example: "A customer breaks a large transaction into two or more smaller transactions. A man wants to conduct a transaction involving $12,000 in cash. However, knowing that the cash threshold of more than $10,000 for filing a CTR would be met, he conducts two cash transactions of $6,000 each."

Sounds familiar, doesn't it?

Now, as you know, I'm not a lawyer. And though I've discussed this matter with several lawyers over the course of the day, it's certainly possible that there's some detail I've missed which makes the cited law not apply.

There seems to be some conflict, for instance, between lawyers and bank officers who've written in over whether the law in question applies to checks or only to cash, bank orders, etc. (And if the federal law in question doesn't apply, what explains the $9,000 increments?)

But from what I've been able to glean so far at least, this looks like a textbook example, pretty much on its face, of a federal crime -- in which each of the three parties (Anthony Sanchez, Howard Hill and almost certainly Jack Abramoff) participated.

As I wrote earlier, I'd very much like to hear from any lawyers or financial services professionals who can shed more light on these issues discussed above.

Late Update: The more I hear on this, the more I'm wondering whether the law doesn't apply to ordinary garden-variety checks, as opposed to cash or bank notes, etc., if only because it's so hard to believe these guys ever could have gotten away with something so obvious. One TPM Reader, for instance, writes: "That is a puzzling number, but I don't think it directly violates a law. The law you cite is designed to monitor cash transactions, to help control various forms of laundering. It sounds like the $9,000 transactions were all done by check--and a $9,000 check is not at all unusual. It does raise questions, though, about how the money was reported as income ... just because it is unusual to break money into regular small amounts not tied to any kind of time or performance ..." In any case, as I said, whoever can shed some light on this...

Yesterday we noted this

Yesterday we noted this article in the Los Angeles Times which suggests that in 2002 the White House may have removed a United States Attorney who was about to begin an investigation into the lobbying activities of Jack Abramoff in the overseas territory of Guam. And Karl Rove appears to be directly tied to the decision-making -- at least on the man's replacement.

In that article, though, there's also this passage ...

In 2002, Abramoff was retained by the Superior Court in what was an unusual arrangement for a public agency. The Times reported in May that Abramoff was paid with a series of $9,000 checks funneled through a Laguna Beach lawyer to disguise the lobbyist's role working for the Guam court. No separate contract was authorized for Abramoff's work.


Certainly not the most efficient way to pay the bill, especially since it totaled more than $300,000. Here's the passage in the earlier article referenced by the Times ...

In 2002 Abramoff was retained by the Guam Superior Court to help fight a judicial reform bill pending before Congress. It was an unusual arrangement for a public agency. No separate contract was authorized, and Abramoff's lobbying fees were disguised in a series of small checks funneled through a California lawyer under an existing contract, records and interviews show.

The middleman, Laguna Beach lawyer Howard Hills, said in an interview that he backed out of his role after processing 36 separate checks in $9,000 increments totaling $324,000.

The transactions now are under investigation by the Guam Public Auditor's office.

In May 2002, Superior Court administrators were trying to stop legislation that would give the Guam Supreme Court authority over the Superior Court.

The bill's supporters at the time, such as Guam's congressional delegate, Robert A. Underwood, said the measure was needed to prevent undue political influence on the judiciary and also to clarify the authority of the Supreme Court.

Foes, led by Superior Court Chief Justice Alberto C. Lamorena and court administrator Anthony Sanchez, objected to Congress interfering with a Guam domestic matter. But they received an unexpectedly hostile reception at a hearing in Washington on May 8, 2002.

According to Hills' account, the court officials, licking their wounds over lunch, decided to call in Abramoff, known for his political ties to Rep. Tom DeLay (R-Texas), who was the House whip at the time.

The California lawyer, a former Reagan administration official, was acting as a consultant to the Guam Superior Court. Hills said the Guam contingent walked a few blocks to Signatures, the Washington restaurant they knew was owned by Abramoff.

At an impromptu meeting, Abramoff said he could help, Hills said. The lobbyist also told the Guam officials that DeLay and House Republican leaders would find abhorrent any interference by Congress in a local court dispute.

Hills withdrew, he said, thinking his services no longer were required. Instead, Hills said, he soon found himself helping to conceal Abramoff's agreement with the Guam court.

Rather than create a new contract for Abramoff, the Guam Superior Court hired the lobbyist under Hills' original consulting contract. No public disclosure was required and, according to Hills' account and e-mails reviewed by The Times, the unusual billing system was created.

One e-mail from Sanchez to Hills on May 23, 2002, asked "can you please send me 22 individual invoices at no more than $9K for May payments.... Very important." Sanchez used the e-mail address "nobodyonguam."

In another e-mail dated Sept. 30, 2002, Sanchez ordered Hills not to talk about the arrangement. Hills said he forwarded all of the $9,000 payments to Abramoff.

Eventually, Hills said, he called a halt to the arrangement and refused to submit any additional bills on Abramoff's behalf. That also ended the string of payments, prompting Abramoff's complaint to Sanchez.


As I said, a rather unorthodox method of payment. And the pattern was clearly no accident, as shown by Sanchez's direction to "send me 22 individual invoices at no more than $9K for May payments." The additional detail here is that federal law requires banks to report funds transfers of over $10,000. (The change to this amount is relatively recent; but I'm pretty sure it predates late 2002.)

Thus, it seems very hard to come up with a reason for this odd pattern of payment other than as an attempt to conceal the transaction from federal authorities. And of course using Hills as a cut-out allowed Abramoff to avoid filing the requisite lobbying disclosures.

I'd be curious to <$NoAd$>hear from lawyers with relevant experience what they make of this arrangement.

We just started the

We just started the second edition of our new TPMCafe Book Club this mornign.

This week we have author Larry Diamond talking about his new book Squandered Victory, essentially an insider's account of the poor planning, mismanagement and incompetence that bedevilled the Coalition Provisional Authority in Iraq. Diamond is a foreign policy hand with an expertise in democratization and, I think, also a Democrat. But he's a fellow at the Hoover Institution at Stanford. And through that connection, he became friends with Condi Rice.

It was Rice who contacted him about six months after the end of the war to ask if he'd go to Iraq as an advisor to the CPA.

The book is his story of what he saw there. And he's just started the discussion of the book this morning.

If you'd like to join in and ask Diamond your own questions, stop by.

The Wall Street Journal

The Wall Street Journal oped page -- the folks who brought you 'Karl Rove, Whistleblower' -- have unearthed the evidence of liberal bias in Bob Novak's on-air meltdown last week. Only Novak was sent to the penalty box, not Carville! And after all, Carville provoked him, right?

Actually, what's interesting here is that even if Novak was trying to re-prove himself as a tough guy in the eyes of the Journal hyenas, they seem to have gotten the message that he's not able to defend himself.

In any case, one other thing jumped out at me about the Journal's quick-and-dirty piece. Writes the Journal: "But far from "watching" Mr. Novak, we've defended him while the rest of the press corps has assailed him for doing his job and breaking the news about Valerie Plame's role in getting her husband Joe Wilson a job as a CIA consultant."

Now, I grant you that keeping tabs on all the falsehoods on the Journal oped page would amount to a Sisyphean task. But here we seem to have a bonus falsehood wrapped into the larger campaign of falsehood. "A job as a CIA consultant." Did Wilson ever have a job as a CIA consultant? I think that implies being paid. Whatever else one can say about the man, his trip to Niger or anything else, I believe there is an uncontested and never questioned record that the man was never paid anything but the expenses of the trip.

This is simply another intentional inaccuracy meant to support the larger inaccuracy that the fact-finding trip was a boondogle put together by his wife.

Lies beget lies and yet more lies. And eventually you have a whole oped page.

Switchboard call log update.

Switchboard call log update.

Last night I asked if folks with experience at the White House could give us some sense whether the Rove claim about the call logs was credible (see post below).

I heard from a number of readers, nearly all of whom did not find it credible, for various reasons.

However, the person I heard from who is in the best position to know (personal experience, etc.) told me that in fact that is how the log system operates and thus that the claim that the call was not logged because it came in through the switchboard is credible. So until I hear otherwise I think at least that very narrow question is settled.

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