TPM News

Scott McClellan's testimony is underway before the House Judiciary Committee.

He was asked early on about President Bush's involvement in the leak of CIA operative Valerie Plame's identity.

"I do not think the president in any way had knowledge of it," McClellan said.

Also, we heard he got a $75,000 advance for the book.

Read more for the text of his opening statement.

Late Update: The Judiciary Committee recessed for the House debate on the compromise bill on the federal wiretapping law. That debate is underway and will last one hour.

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After everyone had a chance to sift through yesterday's breakthrough "compromise" on a new federal surveillance law, the biggest winer of the day was not Republicans or Democrats but the telecom companies.

Today's Washington Post summarizes the legal impact succicntly in it's front-page story :

The agreement extends the government's ability to eavesdrop on espionage and terrorism suspects while effectively providing a legal escape hatch for AT&T, Verizon Communications and other telecom firms. They face more than 40 lawsuits that allege they violated customers' privacy rights by helping the government conduct a warrantless spying program after the Sept. 11, 2001, attacks.

The final compromise on the immunity issue was this: Many Democrats had wanted the federal courts to review whether the surveillance program was legal before granting immunity. The White House wanted the courts to have no involvement whatsoever. The "compromise" calls on the courts to consider the surveillance legal if the companies can prove that the Administration told them it was legal. (Which we know they did).

The Chicago Tribune reports:
The new bill would require federal courts to cast those lawsuits aside if the companies can show that they received written requests from the government stating that their cooperation was deemed lawful and had been authorized by the president.
The House is expected to vote on the measure today. Though billed as a compromise, the final version was viewed as a victory for the White House, according to the Post.
But overall, the deal appears to give Bush and his aides, including Attorney General Michael B. Mukasey and Director of National Intelligence Mike McConnell, much of what they sought in a new surveillance law.
As for the future of the spying program, this new law allows it to grow.

The Wall Street Journal this morning wrote:
The lasting impact of the agreement would be a broader scope for the government's domestic surveillance.

Before 9/11, the NSA had to acquire a specific warrant if it wanted to listen to any conversation involving a U.S. citizen. Now, the secret court would be able to approve broad patterns of surveillance, focused on groups of people believed to be overseas, even if they are communicating with people in the U.S. So without a warrant, the NSA could listen to the conversation of a U.S. citizen if he or she was talking to a suspicious person overseas.
Several Democrats spoke out against the bill, but enough of them agreed to assure this version will pass into law.

Again, from the Journal:

The outcome was driven largely by the realities of election-year politics. Democrats, particularly more conservative ones, in vulnerable re-election races couldn't afford to appear to be dodging a big national-security issue. And many believed the law needed to be updated before surveillance orders expired in August. House Democratic leaders struggled for months to find a proposal their entire party could support but couldn't overcome splits between conservative and liberal Democrats -- some of whom are reacting angrily to the deal.
Behind the political positioning, however, was the pressure from the telecom firms -- particuarly AT&T and Verizon, which both stepped up their lobbying efforts this spring.

Just who makes up Rep. Don Young's "A Team," the nine transportation lobbyists listed in Young's "Intern Survival Guide" who "can talk to whoever they want" when they call his congressional office?

We've put together a snapshot of each "team" member. Pictures, mysterious silhouettes and more after the jump.

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We know the feds have had their eye on former Rep. John Sweeney for a while.

DOJ investigators pulled some of Sweeney's financial records from the House clerk in 2006 and reviewed them along with those from other lawmakers linked to convicted Washington lobbyist Jack Abramoff.

Now we're learning about a previously unreported search of his congressional office just about the time voters kicked him out of office in late 2006.

The Times Union up in Albany has made two references (here and here) to the search in its recent coverage:

The FBI also entered Sweeney's congressional office on his last day in Congress in 2006 and took computers, cellphones, various electronic devices, equipment and records from his aides, two sources familiar with the matter said.

A source close to Sweeney's former congressional office said the FBI first indicated its interest in Sweeney's activities when it seized records and computers of his staffers at the end of 2006.

It's not precisely clear whether this was a search of Sweeney's office on Capitol Hill or an office back in his district. Whatever the FBI got during that search might not be much help. A federal judge has since ruled that FBI searches in Congressional offices can violate the constitution. (Thanks to Rep. William Jefferson, whose Hill office was raided in May 2006.)

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As lawmakers continue to react to the "compromise" deal on a new federal surveillance law, several Democrats in the Senate are coming out against the bill.

Sen. Russ Feingold (D-WI) has been the most outspoken since the deal was unveiled this morning.

"The proposed FISA deal is not a compromise; it is a capitulation. The House and Senate should not be taking up this bill, which effectively guarantees immunity for telecom companies alleged to have participated in the President's illegal program, and which fails to protect the privacy of law-abiding Americans at home. Allowing courts to review the question of immunity is meaningless when the same legislation essentially requires the court to grant immunity. And under this bill, the government can still sweep up and keep the international communications of innocent Americans in the U.S. with no connection to suspected terrorists, with very few safeguards to protect against abuse of this power. Instead of cutting bad deals on both FISA and funding for the war in Iraq, Democrats should be standing up to the flawed and dangerous policies of this administration."

Sen. Patrick Leahy (D-VT) also said he opposed the House deal.
"This bill would dismiss ongoing cases against the telecommunications carriers that participated in that program without allowing a judicial review of the legality of the program. Therefore, it lacks accountability measures that I believe are crucial.

Sen. Harry Reid (D-NV), who has been cool to recent talk about the House deal, appears on the fence, and issued this statement today:

"Senator Reid believes this version is better than the bill the Senate passed in February and much better than the Protect America Act signed by the President last summer, but he remains opposed to retroactive immunity and is reviewing the bill in its entirety."

The Senate passed a bill that provided retroactive immunity to telecom companies earlier this year, so it's unlikely that there will be enough votes to defeat the latest version of immunity.

Besides the sub-prime mortgage crisis, UBS has an entirely different set of problems to worry about: the criminal prosecution of their former employees and the possible public exposure of their massive wealth management business.

Bradley Birkenfeld, a former UBS banker in Geneva, pled guilty in a Florida court today, for conspiring to hide $200 million in client assets in order to avoid paying U.S. taxes. The plea is the latest in bad news for the bank, who has its wealthiest clients running for cover as authorities pressure bank officials to give up the names of over 20,000 of their high-net- worth clients.

And it's all because no one wanted to pay their taxes. Birkenfeld and colleague Mario Staggl, currently at large, helped billionaire American real estate developer and owner of Olen Properties Corp., Igor Olenicoff avoid almost $7.2 million in taxes between 2001 and 2006. Olenicoff was sentenced on April 14, 2008 and agreed to pay $52 million in back taxes.

In his statement today in U.S. District Court in Fort Lauderdale, Birkenfeld detailed how he, Staggl and other managers and bankers at UBS had concealed client assets.

From a Department of Justice press release earlier today:

Birkenfeld, managers and bankers at the Swiss bank, and U.S. clients prepared false and misleading IRS forms that claimed that the owners of the accounts were sham off-shore entities' and failed to prepare and file IRS forms that should have identified the true U.S. owner of the accounts.

To further assist U.S. clients of the bank in concealing their offshore accounts, Birkenfeld admitted that he, Mario Staggl, additional private bankers and managers at the Swiss bank, and others advised U.S. clients to place cash and valuables in Swiss safety deposit boxes, and purchase jewels, artwork and luxury items using the funds in their Swiss bank account while overseas. Additionally, they advised the clients to misrepresent the receipt of funds from the Swiss bank account in the United States as loans from the bank; destroy all off-shore banking records existing in the United States; utilize Swiss bank credit cards that they claimed could not be discovered by U.S. authorities; and file false U.S. individual income tax returns that omitted income earned by the clients and fraudulently misrepresented that the clients did not have an interest in and signature authority over accounts held offshore.

. . . To circumvent the requirements of the agreement between the bank and the IRS, Birkenfeld and others conspired to conceal the American real estate developer's ownership and control of the $200 million of assets hidden offshore by creating and utilizing nominee and sham entities, including Bahamian corporations, Liechtenstein trusts and Danish corporations.

According to the DOJ, Birkenfeld and his co-conspirators actions were in direct violation of a 2001 agreement between UBS and the American government, which stated that the Swiss bank would "identify and document any customers who received reportable U.S. source income or would withhold and anonymously pay a 28 percent withholding tax."

The guilty plea is the latest in what has been an ongoing and dramatic investigation of UBS and its Geneva bankers. In April of 2008, Martin Liechti, head of UBS' international wealth management business for the America's was briefly detained while passing through Miami airport. Birkenfeld, who has been talking to prosecutors for over a year regarding this matter, was arrested on May 7 upon entering the U.S. at Logan Airport for a high school reunion.

Staggl, co-founder of New Haven Trust Company Ltd. in Liechtenstein is considered a fugitive and is still at large.

Clearly the wrangling is over regarding the surveillance compromise. A formal statement went out today that everyone agrees on this matter.

Senate Intelligence Committee Chairman John "Jay" Rockefeller (WV), Senate Intelligence Committee Vice-Chair Kit Bond (MO), House Majority Leader Steny Hoyer (MD), and House Minority Whip Roy Blunt (MO) announced today that a bipartisan compromise has been agreed to that will modernize the Foreign Intelligence Surveillance Act. ... "This bipartisan bill balances the needs of our intelligence community with Americans' civil liberties, and provides critical new oversight and accountability requirements," said Hoyer. "It is the result of compromise, and like any compromise is not perfect, but I believe it strikes a sound balance. Furthermore, we have ensured that Congress can revisit these issues because the legislation will sunset at the end of 2012."

The Electronic Frontier Foundation has a copy of the new legislation here.

Read on for the complete text of the Congressional statement.

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Rep. Laura Richardson (D-CA) has money troubles. She's had her homes fall into default five times in the last 13 months (seven times total), all while lending over $175,000 to her campaigns.

Maybe that's why the ethics watchdog group, Citizens for Responsibility and Ethics in Washington (CREW), called her a "deadbeat Congresswomen," and filed a request yesterday for a congressional investigation into shady looking mortgages and foreclosures.

Richardson responded through her spokesperson, who called the investigation request slim-pickings. From the LA Times:

William Marshall, a spokesman for Richardson, called the complaint "pretty mean-spirited. It rehashes old news." He said the House ethics counsel last week met with the congresswoman and said her ethics statement met House rules.

From the Wall Street Journal:

WASHINGTON -- After more than a year of partisan acrimony over government surveillance powers, Democratic and Republican leaders have agreed to a bipartisan deal that would be the most sweeping rewrite of spy powers in three decades. The House is likely to vote on the measure Friday, House aides said.

Removing the final barrier to action on the measure, which has been hashed out in recent weeks by senior lawmakers in both parties, House Democratic leaders decided to allow a vote on the bill, despite the opposition of many in their party.

The new agreement broadens the authority to spy on people in the U.S. and provides conditional legal immunity to companies that helped the government eavesdrop after the 2001 terrorist attacks, according to congressional aides in both parties.

Late Update: The deal-maker was offering some retroactive immunity to the telecom companies who have already participated in the program.
Critical to sealing the deal was a compromise that would grant conditional immunity to telecommunications companies for assistance they provided from September 2001 through January 2007. If the companies can show a federal district court judge "substantial evidence" they received a written request from the attorney general or head of an intelligence agency stating the president authorized the surveillance and determined it to be lawful, the cases against them will be dismissed.

We haven't heard what "conditional" means.

Politico reports that the House Democrats have agreed to vote for it, possibly tomorrow.

Late Update: The Electronic Frontier Foundation says the deal offers broad immunity and says the Democrats caved in to pressure from the telecom industry and the White House.
"Whatever gloss might be put on it, the so-called 'compromise' on immunity is anything but: the current proposal is the exact same blanket immunity that the Senate passed in February and that the House rejected in March, only with a few new bells and whistles so that political spinsters can claim that it actually provides meaningful court review," said EFF Senior Staff Attorney Kevin Bankston. "We call on all members of Congress to reject this sham compromise and maintain the rule of law, rather than deprive the millions of ordinary Americans whose privacy rights were violated of their day in court."
EFF is representing plaintiffs in a class-action lawsuit of AT&T customers who claim their records were illegally handed over to the National Security Agency (NSA).

Career officials are in open revolt over at the Office of Special Counsel.

The underlings are outraged at their boss, Scott Bloch, who is under investigation by the FBI. The one man in the Bush Administration who is supposed to investigate whistle blower complaints is himself accused of retaliating against whistle blowers.

"We're trying to deal with this by decapitation," one official told TPM. "The big question is: Why isn't the White House letting him go?"

Meanwhile, Bloch is desperately trying to improve morale.

Against the advice of career officials in the office -- some of whom have been subpoenaed in the investigation -- Bloch is convening a day-long "retreat" in Alexandria, VA, flying in officials from offices in Dallas, Oakland and Detroit, for a pep talk.

During the training session, Bloch himself will give a talk entitled: "Training on Accountability, Efficiency, OSC's Independence, and "What a Whistleblower is."

The meeting was scaled back from Bloch's original idea of a multi-day retreat out in the Shenandoah Valley.

"He brought up the idea and said, 'What does everybody think? And everybody just kind of sat there," the official said.

We'll post the agenda for next week's retreat shortly.

Late Update: One former OSC official points to the afternoon session on "E-Discovery Training" and says it's "ironic in the extreme, given the accusations of his own attempted destruction of computer files that were requested in connection with the investigation of him!"

Bloch reportedly hired Geeks on Call to erase his email files.

Late Update: Here's the agenda.