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A new report from the Inspector General of the State Department recommends that the department not renew Blackwater Worldwide’s license to operate in Iraq. The absence of Blackwater contractors would be the most significant of numerous security challenges facing American diplomats in the country. (Associated Press)

A new report from the ombudsman for U.S. Citizenship and Immigration Services charges that some federal judges have delayed swearing-in ceremonies for newly naturalized citizens. The delays, which stem from judges insisting upon administering oaths themselves — thus earning a fee from the government — may have kept many from voting in the November election. (Washington Post)

Residents of Las Vegas, Nevada and the surrounding area are complaining to the Congressional Oversight Panel of the federal bailout program that the results of the spending have not yet “trickled down” to average Americans. The area has seen unemployment rise to 7 percent and has the nation’s highest foreclosure rate. (Los Angeles Times)

Attorney General Michael Mukasey will recuse himself from the case of investor Bernard Madoff. Mukasey’s son is currently defending a senior employee at Madoff’s firm in the investigation. (Associated Press)

The office of Sen. Daniel Inouye (D-HI) has denied any wrongdoing by the senator in connection to convicted defense contractor Mitchell Wade. Some close observers of the case have suggested that documents filed in the Wade trial implicate five other members of congress, including Inouye; so far no charges have been filed against any of them. (ProPublica)

David Safavian’s defense lawyers got a second chance to make closing arguments Wednesday, after they complained that federal prosecutors had misrepresented conversations between FBI agents and their client. Safavian, the former chief of staff for the General Services Administration, is undergoing his second trial for lying about his relationship with Jack Abramoff. (Associated Press)

Rep. William Jefferson (D-LA) will appeal a second time to the Supreme Court to have his federal indictment overturned. Jefferson contends that evidence against him gathered from “privileged legislative material” violates a constitutional right provided by the Speech and Debate Clause. Numerous other courts have rejected Jefferson’s appeals. (Roll Call)

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