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We've spent a lot of time reporting on the emerging defense budget debate, and the rhetoric around it for some time, but eventually that will all give way to Congressional wheeling and dealing, and leaders will emerge on all sides of the issue.

The House member who's most dedicated himself to advancing Defense Secretary Robert Gates' cause is Rep. Joe Sestak (D-PA).

Sestak is a retired Rear Admiral, the highest ranking military officer ever to serve in Congress, and a member of the Armed Services Committee. I spoke with him yesterday in detail about how the fight is shaping up, and why he takes the position he does.

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Another rich client of UBS has been charged with using Swiss banking secrecy laws to evade taxes: it's Robert Moran, who failed to declare a $3.7 million account with the bank on his 2007 tax return.

Like Steven Michael Rubinstein, who earlier this month became the first UBS client charged in the investigation, Moran is a Florida yacht dealer charged with a single count of tax fraud. The Times specifies that the two are "not connected" except inasmuch as theirs were two of the 285 names the ailing Swiss bank, which today announced it would cut another 7,500 jobs after posting a $1.8 billion loss, handed over to the IRS earlier this year as part of a $780 million settlement into its tax evasion business.

Yachts were a "fertile recruiting ground" for UBS, according to Bradley Birkenfeld, the former UBS private banker whose "statement of facts" in the criminal probe of his role in the bank's tax evasion business provided the basis for much of the larger investigation. And Moran is a resident of Lighthouse Point, Florida -- also an address used by Birkenfeld's most famous client Igor Olenicoff, the billionaire real estate developer for whom Birkenfeld once laundered cash by traveling to the United States with a toothpaste tube full of diamonds. Birkenfeld's statement confesses to "numerous overt acts [of tax fraud] in Broward County," where both Rubinstein and Moran reside. Both men appear to be cooperating in the investigation.

So who boarded those fancy yachts, one of which can be chartered for the reasonable price of a million dollars a week plus expenses?

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Last night, I interviewed Rep. Joe Sestak (D-PA), who's positioning himself to be a leader on military issues in the House of Representatives. Sestak is a retired Navy rear admiral, and the highest ranking officer ever to serve in Congress. We spoke broadly about military issues--particularly about the Obama administration's proposed Pentagon overhaul--but we also touched on the coming Don't Ask, Don't Tell fight.

I asked Sestak for his position on the issue, and his take on how the administration--which seems very much to have put a repeal on the back burner--has handled it. Here's what he said:

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The latest absentee ballot count in the NY-20 special election is looking very good for Democratic candidate Scott Murphy, with his lead now at 168 votes as new results have come in from the pro-Murphy counties of Columbia, Dutchess and Warren, compared to a 47-vote lead at the close of business yesterday.

We're seeing a continuation of the trend of Murphy doing even better in the percentage of the absentee vote in a given county, compared to the Election Night vote. Some examples of what I mean: Murphy won Dutchess County with 51.5% on Election Night, but in the portion of absentees counted so far he has 54.0%. And although Murphy got only 44.4% of the Election Night vote in Greene County, he's at 48.3% in their absentees, ahead of the baseline.

Only one county, Otsego, has proven to be an exception to this rule. But it only cast about two percent of the total absentees, and is more than outweighed by the trend in other counties.

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The new poll of North Carolina from Public Policy Polling (D) confirms that GOP Sen. Richard Burr is in serious trouble going into his 2010 re-election race. The odd thing is that Burr's approval and horse-race numbers are more characteristic of an unknown candidate in an open-seat race, than they are of an incumbent.

Burr has an approval rating of only 35% and a disapproval of 31% -- with a very high undecided rate of 33%. Democratic state Attorney General Roy Cooper leads Burr by 41%-37%, with a 41% favorable and 20% unfavorable. Rep. Mike McIntyre, a relatively conservative Democrat, has even lower name recognition at 23% favorable and 21% unfavorable -- and Burr is only ahead by 39%-34%.

From the pollster's analysis: "If Roy Cooper enters the race for US Senate this race automatically becomes a tossup, if not even slightly Democratic leaning. It's quite unusual for an incumbent who doesn't have major ethical problems to trail an unannounced challenger."

The Minneapolis Star-Tribune, which endorsed Norm Coleman for re-election in 2008, has a new editorial that goes right down the middle on Coleman's intention to appeal his loss in the election trial. On the one hand, they say he raises serious issues that deserve a fair hearing at the state Supreme Court -- but on the other hand, it better be done quickly:

The gravity of his charge, and the need for this election contest to end with a result that Minnesotans widely accept as credible, make a Minnesota Supreme Court review of the district court panel's decision worthwhile.

We add this caveat: That review should be conducted with as much expedition as appellate jurists can muster. Coleman has a right to appeal, and the absentee voters whose ballots he seeks to add to the count have a right to serious consideration under the law.

But those rights stand in increasingly evident tension with Minnesota's constitutional right to dual representation in the U.S. Senate.


It does look like everyone's patience is running thin, insofar as it's still there at all.

Last month, as we noted at the time, House Oversight committee chair Ed Towns formally asked the Justice Department for records kept by a government monitor, who since 2004 has had access to high-level internal deliberations at AIG.

But DOJ seems to be dragging its heels.

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Hours after filing for bankruptcy in a U.S. court, Bernard Madoff's London-based financial firm sued Peter Madoff -- the Ponzi schemer's brother, and employee -- for "unjust enrichment." The company also moved to seize Peter Madoff's assets, including a $200,000 Aston Martin car, which the company claims in court documents he purchased with company funds. This was the first action to seize the assets of Peter Madoff, who has not been charged with wrongdoing in connection to his brother's multi-billion dollar Ponzi scheme. Filing under Chapter 15 of the bankruptcy code, Madoff Securities International said they owed up to $1.5 billion in liquid funds and assets. This is part of a larger effort to liquidate Bernard Madoff's assets to repay victims of his massive Ponzi scheme. (Bloomberg)

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Former Rep. Pat Toomey (R-PA) has made it official: He is running in the 2010 Senate primary against moderate GOP incumbent Arlen Specter, who he very nearly defeated in the last primary in 2004 -- a development that may well increase the chances of the Democrats picking up this seat.

Said Toomey: "Pennsylvanians deserve a voice in the U.S. Senate that will honor our values and fight for limited government, individual freedom and fiscal responsibility. I will be that voice." Toomey stepped down Monday from his position as head of the Club For Growth, which fueled his campaign last time, pretty much a giveaway that he was about to announce his candidacy.

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AIG has responded to the letter from Rep. Ed Towns requesting information about the company's PR expenses, that we first reported on yesterday -- and which has now been picked up by Reuters, Bloomberg, and ABC News, among others.

Here's the statement they sent us:

In more than 30 media appearances since the beginning of the year and elsewhere, Mr. Greenberg and his lawyers have made false and misleading statements about AIG, including his role in creating AIG Financial Products and its credit default swap business, as well as the circumstances surrounding his forced departure from AIG during an accounting fraud investigation. We look forward to providing Congressman Towns with background on why it has been necessary to correct these and other misstatements, which are both misleading to the American public and damaging to AIG and its ability to repay taxpayers.

This issue is not about AIG's corporate public relations expenditures, which are down sharply since last year. It is about correcting Mr. Greenberg's false and damaging statements.

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