TPM News

Appearing on Fox News radio with Brian Kilmeade, Norm Coleman himself confirmed that he'll be appealing his case -- which his legal spokesman had announced yesterday, after the election court handed down a ruling that seriously damaged his efforts to get his campaign's list of previously-rejected absentee ballots put into the count:

Some fun quotes, after the jump.

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Here's a quick roundup of some news from the NY-20 special election:

• As the standard process of proofreading the vote spreadsheets has been conducted, Democrat Scott Murphy's lead over Republican Jim Tedisco has actually shrunk from 65 votes to 25 in the latest AP numbers. These sorts of human errors are commonplace, and are usually very small and break about equally -- but in a race this close, they can be consequential.

• The Washington Post reports that Democrats have privately predicted a Murphy win by 210 votes, when all the absentee ballots are counted. This is based on making projections for the home counties of the absentees, from the percentages for each candidate in the Election Day tally. But here's a counter-example: when some previously-rejected absentee ballots in Minnesota were opened up and counted this past January 3, Al Franken ended up doing far better than geography alone would have predicted. It really does come down to which side had the better absentee ballot operation.

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Looks like we may soon be learning more about the preferential treatment major banks may have enjoyed in the wake of the AIG bailout.

Last week, we noted Rep. Spencer Bachus's efforts to bring to light the issue of smaller U.S. banks that are allegedly being stiffed on their loans to an AIG subsidiary even as major CDS counterparties (some of them foreign banks) were paid off in full. Bachus is the ranking member on the House Financial Services committee, and he aired his concerns at a hearing and in letters he sent to both Geithner and Barney Frank, the committee chairman.

After we reported this, the Wall Street Journal dug up a couple examples of just this issue, one of which occurred in Bachus' district.

Now, it seems, the committee is taking some steps toward investigating Bachus' complaint.

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Yesterday, we told you about how several AIG execs reassured investors at a December 2007 presentation that company risk officers had closely scrutinized the transactions of the financial products unit -- the part of AIG that made those credit default swaps. And about how several pieces of evidence have surfaced in recent months that appear to contradict those claims.

This is serious business: US and British prosecutors are already investigating former AIGFP chief Joe Cassano, and, it appears, former AIG chief Martin Sullivan, for potentially painting an unduly rosy picture of the firm's exposure to the sub-prime crash -- and are said to be focusing on that December 2007 presentation in particular. So it's worth taking a moment to lay out what exactly we know here, and what it might amount to.

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The NRCC has just released this statement from New York's GOP Congressional delegation, predicting a win by Jim Tedisco in NY-20:

Washington - Today, the members of New York's Republican Congressional Delegation - Reps. Peter King, John McHugh and Chris Lee - released the following statement regarding the status of the special election in New York's 20th Congressional District:

"With the election not yet certified, and the Republican advantage among absentee ballots not yet counted, we are confident that Jim Tedisco will be the next Congressman from New York's 20th Congressional District. We look forward to welcoming Jim as our colleague and working with him to address the critical issues facing upstate New Yorkers."

It's worth stopping here for a moment and considering the fact that New York, with 29 total House members, only has three Republicans in the bunch. After the 2000 elections, before the GOP brand completely crashed in the Northeast, that number was 12 Republicans out of 31. So obviously, these three guys want to have some company and rebuild their party.

Scott Murphy, the Democratic candidate in the super-close NY-20 special election, has put out this statement predicting victory:

"Eight weeks ago, we were down over twenty points and they said this couldn't be done. The election results proved something very different," said Murphy. "The voters of the 20th Congressional District made clear they want a leader with proven business experience who will work across the aisle to bring common sense solutions to Washington.

"Thanks to our unbelievable grassroots supporters who helped build this amazing campaign in just eight weeks, we've defied the odds and we won a majority of votes cast Tuesday.

"We are confident that once all the absentee ballots are counted, we will expand our lead and we will go to Congress and partner with Senator Gillibrand and President Obama to create jobs and turn our economy around."

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Remember Charles Millard, who we told you about earlier this week?

He was the Bush-appointed head of the government agency that guarantees workers' pensions, who made the genius decision to switch the agency's investments from conservative bonds to risky stocks -- right before the stock market tanked. The result: the Pension Benefit Guaranty Corporation's stock-related investments were down 23 percent as of September -- the up-to-date figure is believed to be much higher -- putting in grave doubt its ability to cover the expected losses in private pension funds that the market slump has already caused.

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Late update: Harvard spokesman John Longbrake called to emphasize that the university had conducted thorough investigations of all allegations about Harvard Management Company and point out the 13.8% annualized returns HMC delivered in the ten years that ended June 2008. In a separate development, we learned that Mack was scheduled to be the subject of a February 23 Newsweek story by Michael Hirsh that had been subsequently shelved. Hirsh declined to comment.

A former quantitative analyst at Harvard Management Company, the university's once-vaunted endowment manager, tells the Harvard Crimson she was fired for voicing concern to then-university president Larry Summers' chief of staff about the money manager's risky use of derivatives the traders didn't understand.

The episode dates back to 2002, when analyst Iris Mack, whose website identifies her as the second African American woman to earn a Harvard PhD. in applied math (and someone who likes primary colors) joined the much-venerated Harvard Management Company, which invests the university's then $18 billion endowment, to find what she termed a "frightening" state of affairs.

"The group I was working for had no background whatsoever to be working on [derivatives]," Mack says, adding that, to her knowledge, several of her colleagues were not licensed securities traders. "Sometimes the ways they handled even basic Black-Scholes models [widely used to price stock options] were puzzling."
So Mack took inventory of the abuses -- high employee turnover, lax risk management practices and a "low level of productivity in the workplace" were among others, and detailed them in an email to Marne Levine, Summers' chief of staff and a Treasury staffer on the Obama Transition Team. (Summers was the only person to whom Meyers reported, and according to a recent Forbes story he personally ordered the university's biggest derivatives trade, a purchase of interest rate swaps that cost the university billions this year.)

A month after sending her email, Mack was fired after a meeting in which the endowment fund's then-chief furnished her the emails and castigated her for making "baseless accusations." She later sued for wrongful termination and settled out-of-court with the university. But she claims the practices "shocked" her, and -- the punchline is -- she had joined the company from Enron.

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One of the fun little tidbits in the Republican Budget roll out today is here:

The substitute gradually converts the current Medicare program into one in which Medicare beneficiaries choose the most affordable coverage that best suits their individual needs. For individuals 55 or older, Medicare will not be changed (other than income-relating the prescription drug benefit): the budget preserves the existing program for these beneficiaries. To make the program sustainable and dependable, those 54 and younger will enroll in a new Medicare Program with health coverage similar to what is now available to Members of Congress and Federal employees.

This is an idea that's been kicking around in conservative circles for some time, and it's an expensive one. Well, it's expensive unless you're an insurance company, in which case it's extremely lucrative. The goal is to phase out Medicare over time by providing new seniors with the health insurance options available under the Federal Employees Health Benefits Program. The FEHBP provides relatively high quality care, and most working-aged people would probably prefer its options over the ones provided by their employers. But Medicare provides similar quality of care while containing the costs of administration, and those costs are much higher at private insurance companies.

There's more like this in the GOP's budget report. And, if you're interested in legislative language for some reason, the resolution itself is here.