TPM News

One final note on the great New York Times Merkin/Madoff op-ed disclosure brouhaha, which we've written about here and here.

The Washington Post's Howard Kurtz covered the controversy in today's column. Here's the entirety of what he wrote:

When the New York Times published a March 21 op-ed column sympathetic to a "quintessential nice guy" -- stock swindler Bernie Madoff -- contributing writer Daphne Merkin noted that she had "a sibling who did business with him."

That turned out to be J. Ezra Merkin, former chairman of GMAC, now accused by New York authorities of defrauding clients by funneling more than $2 billion of their money to Madoff. Was the vague "sibling" reference really enough?

Ombudsman Clark Hoyt wrote yesterday that many readers thought "the disclosure was so limited as to be disingenuous," but Op-Ed Editor David Shipley defended it, saying that paper approached Merkin "in some respect because of her brother."

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Now here's something interesting in the Minnesota Senate trial, which is sure to be appealed to the state Supreme Court: As Senate Guru over at MyDD points out, one of the state Supreme Court justices has in the past donated to Norm Coleman.

In the years before he was appointed to the state bench, Christopher Dietzen was a private attorney and occasional Republican donor, including a check for $250 to Coleman in December 2001, and another $250 for the current cycle in January 2004. The Hill also points out Dietzen served as a campaign counsel for GOP Gov. Tim Pawlenty, during the 2002 open-seat race.

A spokesman for the state Supreme Court told TPM that no information is available about any possible recusal. Since there hasn't been an actual ruling in the trial, much less the filing of an appeal, we don't know and cannot predict what would happen.

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A female relative of Bernard Madoff -- identified by the New York Post as Madoff's niece, Shana Madoff -- called a "federal prison consultant" to ask how much jail time she might be facing, the consultant told TPMmuckraker.

Larry Levine -- a former federal prisoner who now runs a company, Wall Street Prison Consultants, that gives advice to future inmates on how to survive prison time and win an early release -- said that a woman had called him about three weeks ago, saying that she might face conspiracy charges. At first, said Levine, the woman was hesitant to divulge any specific information, but, when pressed by Levine, said that she was a relative of Bernard Madoff, explained the basics of her situation, and asked how much jail time she might be facing. "No money changed hands," said Levine, describing the call as "exploratory".

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The latest official score in the NY-20 special election how has Democratic candidate Scott Murphy ahead of Republican Jim Tedisco by 25 votes, or 0.016%, as the absentees continue to be counted.

Murphy led by 35 on Friday, but the lead has now been cut slightly as the absentee votes were counted in the Tedisco stronghold of Greene County. However, it should be noted that while Tedisco won the absentee ballots here by 52.6%-47.4%, he won the Election Night vote here by 55.6%-44.4% -- so Murphy in fact performed above the baseline here, as he has in most of the other counties that have reported their absentees so far.

We're all still waiting for the Tedisco stronghold of Saratoga County and the Murphy bastion of Washington County to start reporting their absentees, as well as more votes from pro-Murphy Warren County, which just began counting some precincts on Friday, plus the military and overseas ballots that are due back in the mail today under an extended deadline. And as I've previously reported, the number is currently distorted by ballot challenges that appear to have kept a disproportionate number of Murphy votes out of the count. We'll see what happens.

Politicians in both parties might be reluctant to let Defense Secretary Robert Gates have his way with the Pentagon budget--and they, the rank and file, will ultimately have the final say when a real piece of legislation comes to a vote. But Gates and the administration do have some powerful allies on Capitol Hill, and their efforts will be crucial to the success or failure of the attempted overhaul.

We reported a week ago that one of the lone significant voices speaking out in support of the proposed reforms belongs to Sen. John McCain (R-AZ), ranking member of the Senate Armed Services Committee. But while McCain wasted no time getting in front of the issue, the committee's chairman, Sen. Carl Levin (D-MI), remained silent all week.

He broke that silence on Saturday.

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Last month AIG Financial Products head Gerry "Che" Pasciucco met with employees of the unit that took down the economy, and relayed a request from upper management that they return those controversial "retention bonuses," adding that he felt the request was tantamount to blackmail. But he was only thinking of us taxpayers, he tells today's Wall Street Journal, in a story that says 20 AIG FP employees -- not including the unashamed bonus keeper Jake DeSantis, who published his resignation letter in the New York Times -- had quit amid the controversy:

Mr. Pasciucco said that as a result of the bonus controversy, some employees' children were harassed, and some had clubs ask them to resign. "It doesn't surprise me that some senior people said, 'You know what, I've had enough,' " he said...Mr. Pasciucco says the controversy "hurt morale" and "stunned people such that our wind-down has slowed down." He added, "Taxpayers probably have been damaged."
But will we ever know how much we've been damaged? A Financial Times story about AIG FP's decision to "opt out" of a new International Swaps & Derivatives Association protocol signed by 2,000 derivatives market participant intended to to make the complex credit default swap business less "opaque" casts more doubt on that:

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The mini-drama surrounding Arizona State University's refusal to award President Barack Obama an honorary degree may have a second act.

Obama is scheduled to deliver a commencement address at ASU next month, and last week, the university touched off a bit of controversy by suggesting that he hadn't "been in [his] field" for enough time to deserve an honorary degree just yet.

There were, unfortunately, some problems with that rationale.

But over the weekend, the university announced the formation of the "President Barack Obama Scholars" program. And, though they haven't decided to give Obama a degree, Politico's Jonathan Martin reported on Saturday that ASU President Michael Crow sent an email to faculty and students re-justifying that decision.

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One of the major themes of last week was the degree to which Republicans in Congress were deceptively referring to Defense Secretary Robert Gates' budget proposal as a weak-on-defense spending cut. The corollary to that claim--articulated by many Republicans, but also some Democrats--is that defense spending "cuts" will cost jobs. The problem is, though, that most of the people making that argument voted against the stimulus bill this past winter.

Last week we caught Sen. Saxby Chambliss (R-GA) in just such a contradiction. During the debate over the stimulus, Chambliss lashed out at the specter of government recession spending, calling it a "bloated government giveaway." But then, he called into the NPR program Talk of the Nation and said none of that matters as long as the spending is defense spending.

"[W]hen it comes to stimulating the economy," Chambliss said, there's no better way to do it than to spend it in the defense community."

On Sunday, Paul Krugman appeared on ABC's This Week, and picked up on the same thing, and called out Congressional Republicans for what one might call the "Chambliss hypocrisy". Here's Krugman:

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Neil Barofsky, the special inspector-general assigned to oversee the deployment of TARP funds, will begin to investigate more forcefully whether banks manipulated their books to receive more government assistance. Barofsky told the Financial Times, "I hope we don't find a single bank that's cooked their books to try to get money but I don't think that's going to be the case." At a congressional hearing earlier this month, Barofsky said that his office was involved in up to a dozen investigations into potential wrongdoing. He told the Financial Times that the system for deploying bailout funds was easily manipulated. "Indictments can serve as great deterrents," he said. (Financial Times)

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