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Tim Geithner. Tom Daschle. Ron Kirk. What do these men have in common, other than their nominations to join the Obama administration?

Each man owed back taxes to the U.S. government that became an issue during their confirmations -- in Daschle's case, the debts were enough to derail his bid -- and each man had their missteps unmasked by the Senate Finance Committee.

The Politico reported earlier this week that the Finance panel's rigorous vetting was being supervised by Mary Baker, an IRS tax investigator doing a stint in the Senate. In that story, one anonymous "tax expert" quoted by the newspaper accused the committee of "going a bit overboard" with tax inquiries that are "detailed to the point of being silly."

And that anonymous dissing didn't sit well with Sen. Chuck Grassley (IA), the senior Republican on Finance. In a little-noticed statement released late yesterday, Grassley teed off on the "cowardly approach" taken by critics of his committee's Obama-nominee vetting:

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I realize that the very word Lieberman sends a lot of liberals into fits of apoplexy. But it's worth making an additional point to the fine post from my colleague, Eric Kleefeld. Lieberman is talking about leaving the door open to returning to the Democratic party. I think that's unlikely since he would probably be eviscerated in a primary. Still, it's a remarkable shift from a few months ago when it seemed entirely possible that Lieberman would choose to caucus with Senate Republicans.

It's worth noting what's happened to Lieberman since Obama took office. He never wavered on the stimulus. He's supporting the Employee Free Choice Act. He's been fulsome in his praise of President Obama. Think of how much harder things would be for the president if Lieberman had bolted on those issues or had chosen to caucus with Republicans.

I understand Democratic anger with Lieberman. After all, he not only opposed Barack Obama but actively campaigned for the McCain-Palin ticket and endorsed Norm Coleman in Minnesota. The sentiment to kick him out of the caucus had a lot of merit to it. And I'm not suggesting that Lieberman won't stick it to Obama and the Democrats in the future. He probably will.

That said, I think it now seems clear that Harry Reid and Barack Obama were wise not to follow the Netroots call for a Lieberman purge and to let him keep his chairmanship of the Senate Committee on Homeland Security and Government Affairs. I assume most readers will disagree but while the anger of kicking him to the curb would have felt good at the time, wouldn't it have made life harder for President Obama? Discuss.

Christopher Hill, the Obama administration's nominee to become the next ambassador to Baghdad, hasn't made many friends on the right since his time as the Bush administration's chief negotiator on the North Korean nuclear deal.

And now Hill has drawn fire from Senate Republicans who could make serious trouble for his nomination. John McCain (AZ) and Lindsey Graham (SC) released a joint statement last night blasting Hill's "controversial legacy" in the Pyongyang talks and alleging that he lacks the Middle East experience required in a Baghdad envoy.

Sen. Sam Brownback (R-KS) echoed the criticisms in a later interview with the AP. Senate Foreign Relations Committee Chairman John Kerry (D-MA) is already out in front with a defense of Hill, telling Fox News that his conservative critics should take up their North Korea beef with the departed Bush administration.

The AP reports that the trio of critical Republicans means Hill's chances of confirmation are "dimming," which seems to be something of an overstatement given that he would only need one GOP supporter to break a filibuster. But the GOPers' move clearly signals intense political jockeying to come -- with the accompanying media coverage that McCain often draws.

Late Update: Another Democratic senator on the Foreign Relations panel, Jim Webb (VA), has joined Kerry in sending a positive signal on Hill's nomination. Here's Webb's statement:

I have tremendous regard for the service Christopher Hill has given our country. He is one of the best negotiators in the Foreign Service today. There will be ample opportunity to fully explore the full range of his qualifications during the confirmation hearings.

So this is weird.

Yesterday, federal agents raided the workplace of the chief technology officer for the city of Washington DC. The same day, they arrested Yusuf Acar, who serves as the city's information systems security officer, as part of a federal bribery sting.

The man who until recently was CTO, Vivek Kundra, was just named the first ever Federal Chief Information Officer by the Obama administration -- which put this story on the national radar.

It's unclear whether Kundra himself is implicated at all. CNN today reports:

A law enforcement source with knowledge of the investigation told CNN that Kundra is not involved in the case.


But it also reveals that, according to the White House, Kundra has taken a leave of absence from his new gig, until more details are known about the FBI probe.

So for the moment, there are more questions than answers -- but this bears watching.

The judge who will decide whether information about those Merrill Lynch bonuses should be made public has said he'll make a decision within the week, Bloomberg reports.

New York Attorney General Andrew Cuomo is investigating the bonus awards, which reportedly total $3-4 billion. Bank of America, which now owns Merrill Lynch, has refused to disclose to Cuomo which Merrill employees received the awards, and how much each got.

But we particularly liked this argument from B of A's lawyer, Evan Davis, made to Judge Bernard Fried:

Americans care about their privacy. That matters to us because if we don't try to protect it and succeed in protecting it we'll lose them to foreign banks.


Aah yes, Bank of America: famed protector of privacy. When the subject is executive bonuses, that may be true. When its customers' personal information, maybe not so much.

When President Obama submitted a budget that predicted passage of a revenue-raising climate change bill, hopes rose that Congress could successfully rein in carbon emissions this year.

But a cap-and-trade climate bill is almost certain to be filibustered by Republicans -- and in a letter delivered to the Senate Budget Committee yesterday, eight Democratic senators joined 25 Republicans to defend the GOP's right to set a 60-vote margin for passing emissions limits.

"We oppose using the budget process to expedite passage of climate legislation," the senators, including eight centrist Democrats, wrote in their missive.

Using the procedure of budget reconciliation, which would allow a climate change measure to become law with 50 votes while preventing filibusters, "would circumvent normal Senate practice and would be inconsistent with the administration's goals of bipartisanship, cooperation, and openness," the 33 senators wrote.

Budget reconciliation was used by George W. Bush and congressional Republicans to prevent Democrats from stalling both the 2001 and 2003 tax cuts. The opposition of nearly one-half of the Senate, however, means that President Obama's party will have little room to use the tactic as successfully as Bush's supporters did.

Filibuster-proofing the upcoming health care reform bill through reconciliation already has been ruled out strongly discouraged* by pivotal Democratic senators on the Finance Committee, Chairman Max Baucus (D-MT) and Jay Rockefeller (D-WV).

Democrats' reluctance to take advantage of their procedural arsenal to pass climate change and health care this year doesn't mean that both pieces of legislation would necessarily fall to filibusters. But it does mean that Republicans will have significantly more opportunities to insert pro-business provisions into these pivotal bills. Late Update: The eight Democratic senators who signed on to the letter are Robert Byrd (WV), Blanche Lincoln (AR), Ben Nelson (NE), Evan Bayh (IN), Mark Pryor (AR), Bob Casey (PA), Carl Levin (MI), and Mary Landrieu (LA).

*Late Late Update: Baucus has not ruled out reconciliation entirely. As he told the Kaiser Family Foundation last week, "I am doing whatever I can to avoid reconciliation [on health care] and don't take it off the table totally, because it is a backup.

It's fair to say that the incompetence and fecklessness of the SEC in failing to catch Bernie Madoff's $50 billion Ponzi scheme (merely "alleged" no more!) has already been pretty well established -- by this guy, among others.

But if anything, Madoff's courtroom confession delivered yesterday only makes the extent of the SEC's screwup even more startlingly clear.

Here's what Madoff said:

To conceal my fraud, I misrepresented to clients, employees and others, that I purchased securities for clients in overseas markets. Indeed, when the United States Securities and Exchange Commission asked me to testify as part of an investigation they were conducting about my investment advisory business, I knowingly gave false testimony under oath to the staff of the SEC on May 19, 2006 that I executed trades of common stock on behalf of my investment advisory clients and that I purchased and sold the equities that were part of my investment strategy in European markets. In that session with the SEC, which took place here in Manhattan, New York, I also knowingly gave false testimony under oath that I had executed options contracts on behalf of my investment advisory clients and that my firm had custody of the assets managed on behalf of my investment advisory clients.


And here's how the SEC -- in a memo that recommended closing that inquiry, having found only minor violations -- what appears to be that same piece of testimony:
[I]n the course of a preliminary inquiry into [Markopolos' allegations that Madoff's hedge fund profits were the result of fraud], the staff learned that during a recent examination of BLM by NERO's broker-dealer examination staff, Bernard Madoff, the sole owner of BLM, did not fully disclose to the examination staff either the nature of the trading conducted in the hedge fund accounts or the number of such accounts at BLM.


But of course, it wasn't that he didn't fully disclose the trading information. It's that he wasn't even making any trades, and had directed his staff to create false tickets to fool investors. Presumably, that deception could have been detected had the SEC simply bothered to try to match up those trade with the supposed counter-parties -- who didn't exist.

The SEC had another chance to catch that scheme when Madoff filed reports with the agency that year. Madoff said yesterday:
Another way that I concealed my fraud was through the filing of false and misleading certified audit reports and financial statements with the SEC. I knew that these audit reports and financial statements were false and that they would also be sent to clients. These reports, which were prepared here in the Southern District of New York, among things, falsely reflected my firm's liabilities as a result of my intentional failure to purchase securities on behalf of my advisory clients.


"Were there sufficient red flags for SEC to have caught this?" asked Ross Albert, a former SEC senior special counsel, asked in an interview with TPMmuckraker last December. "Absolutely, without a doubt."

Since then, that conclusion has become only more indisputable. And the case for those additional SEC funds has grown only stronger.

In yet another indication that Joe Lieberman is going out of his way to patch things up with the Democratic Party, The Hill reports that Lieberman is floating the idea of running for re-election in 2012 -- as a Democrat.

Lieberman said that friends have asked him whether he might go back fully to the Democratic Party. "I'm an independent Democrat, and that gives me options," said Lieberman. However, he did caution against assuming that his praise of President Obama and his work within the Democratic caucus mean he will ultimately rejoin the party: "I wouldn't reach that conclusion."

The new Quinnipiac poll from earlier this week suggests that Lieberman would have a very hard time in a Democratic primary. Among Democratic voters, his approval rating is at only 32%, with 61% disapproval. And another Quinnipiac poll from a month ago tested Lieberman as an independent in a general election against Democratic state Attorney General Richard Blumenthal, with Blumenthal winning by a 58%-30% landslide, with an 83%-9% margin among Democrats alone.

But there's no denying that a lot can happen in a three and half years. In 2008 alone, for example, Lieberman travelled the country and vociferously attacked Barack Obama and the Democratic Party. And look at him now.

Sir Allen Stanford's alleged $8 billion Ponzi scheme doesn't only affect his American investors. In the Antiguan election this week, voters chose between the ruling party and the opposition, which welcomed the Texas financier to Antigua twenty years ago. The economy is the central issue in the election, as Antigua's Stanford International Bank was shut down by Caribbean regulators due to the Stanford fallout.* Prime Minister Baldwin Spencer says his opponent, Lester Bird, tried to "literally give away Antigua and Barbuda to Allen Stanford." In 2006, Byrd used his power as a former Prime Minister to nominate Stanford for a knighthood.* Election results are expected today. (Associated Press)

Sam Zell, the chairman and CEO of the newspaper conglomerate Tribune Co. hired a high-profile lawyer to represent him in an interview with the U.S. Attorney's office about possible connections to former governor Rod Blagojevich, the company said Wednesday. Zell's lawyer, Anton Valukas, specializes in white collar crime and has represented law firm Jenner & Block in a number of major cases. Among other charges, federal prosecutors have accused Blagojevich and his chief of staff John Harris of threatening to withhold public support from the sale of Wrigley Field, which is owned by Tribune Co., if the company did not fire members of the Chicago Tribune editorial board. (Chicago Tribune)

A report released by the Government Accountability Office today says Medicare home services spending increased 44 percent over five years due partially to fraud and abuse. Medicare home care services include visits by nurses and physical therapists for Medicare patients. Some lawmakers say that lax oversight enabled providers to take advantage of the system to bill for services they did not provide. Chuck Grassley, the top Republican on the Senate Finance Committee, harshly criticized Medicare oversight as it currently stands. "There's no excuse for Medicare officials neglecting payment problems," the Iowa senator told USA Today. The GAO report recommends implementing criminal background checks on home services providers to reduce cases of fraud. (USA Today)

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Florida GOP Chairman Defends Steele, Blasts Critics Florida Republican Party Chairman Jim Greer has sent a letter to RNC members, defending Michael Steele -- and lambasting his critics: "What I find so disturbing is that some Republicans cannot see the absolute necessity of providing unwavering loyalty and support to Chairman Steele as he embarks upon leading the Republican Party into the future."

Steele Hires Chief of Staff For RNC The RNC announced that Michael Steele has hired Ken McKay, former campaign manager and chief of staff to Rhode Island Governor Don Carcieri, to be the new RNC Chief of Staff. One of the criticisms of Steele in the last month and a half is that he has been slow to fill the key staff positions, but he is now starting to make progress on that front.

Obama's Day Ahead: Focusing On The Economy President Obama is having a closed meeting with Economic Recovery Advisory Board Chairman Paul Volcker at 12 p.m. ET. At 12:45 p.m. ET, he will deliver remarks from the Oval Office on the economy. At 1:15 p.m. ET he is meeting with Vice President Biden for lunch.

Biden Promoting Stimulus With Dem Members of Congress -- And Specter Vice President Biden will be administering the oath of office to Secretary of Labor Hilda Solis this morning. At noon, he will head up an event at Union Station to announce funding for Amtrak as part of the stimulus program. Others in attendance include Democratic members of Congress such as Senators John Kerry, Jay Rockefeller, Frank Lautenberg and others -- plus Republican Senator Arlen Specter.

Big Day In Minnesota: Closing Arguments Closing arguments in the Minnesota election trial are scheduled for today. Each side will have an hour at bat to make their final case to the judges. After that, the judges are expected to spend two to three weeks working on a determination of who has legally won the most votes, and is entitled to the certificate of election -- a decision that is likely to be appealed.

WaPo: U.S. Attorney Situation Remains Unclear The Washington Post reports that the Obama Administration faces some very complicated choices in appointing new U.S. Attorneys, between the interest of appointing their own people versus the need in some cases to keep current Attorneys in places to pursue pending cases. Perhaps the most controversial example involves Mary Beth Buchanan, a conservative U.S. Attorney from western Pennsylvania who is quite publicly refusing to resign.

Virgil Goode Files Papers For Potential 2010 Comeback Bid Former Congressman Virgil Goode (R-VA), who was defeated in a huge upset by Democrat Tom Perriello by a margin of 727 votes out of over 315,000 in 2008, has filed papers to run again in 2010. Goode is perhaps best known for denouncing the election of Rep. Keith Ellison (D-MN), the first Muslim member of Congress.

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