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Courtesy of the Rudy Giuliani camp's efforts to spin the shag fund story, this is another installment in Great Moments in Damage Control! (from The New York Daily News):

Joe Lhota, a deputy mayor in Giuliani's City Hall, told the Daily News Wednesday night that the administration's practice of allocating security expenses to small city offices that had nothing to do with mayoral protection has "gone on for years" and "predates Giuliani."

When told budget officials from the administrations of Ed Koch and David Dinkins said they did no such thing, Lhota caved Thursday, "I'm going to reverse myself on that. I'm just going to talk about the Giuliani era," Lhota said. "I should only talk about what I know about."...

"I don't understand when it started. I don't understand why it started," Lhota said. "But I do know one thing: It was consistently done ... in no way shape or form did it imply a coverup."

The "no explanation" explanation seems to be the best spin the Giuliani camp has available.

Other than that, there's 1) the irrelevant focus on whether the NYPD reimbursed the backwater city agencies which originally were billed for the tryst costs -- a response that has only served to highlight that Giuliani is dodging the main issue, or 2) the fact that, in order to keep the mayor's budget artificially low, there seems to have been a policy of misallocation in his administration, of which the trips to Judith Nathan's Southampton condo were only a small part (though for some reason we haven't seen them try this line yet).

So "I don't understand when it started, I don't understand why it started" it is!

From the Blotter:

Well before it was publicly known he was seeing her, then-married New York Mayor Rudy Giuliani provided a police driver and city car for his mistress Judith Nathan, former senior city officials tell the Blotter on

"She used the PD as her personal taxi service," said one former city official who worked for Giuliani.

New York papers reported in 2000 that the city had provided a security detail for Nathan, who became Giuliani's third wife after his divorce from Donna Hanover, who also had her own police security detail at the same time.

We here at TPMm have dived headlong into the murky world of New York City accounting procedures to bring you the full story of Rudy Giuliani's security detail's mistress visit accounting shell game.

A general clarification first. The central allegation behind the story was that Giuliani, or someone else looking to protect Giuliani, stuck the costs for the security detail into the budgets of obscure city agencies like the New York City Loft Board. It's not clear right now, though, how much total those trips to visit Giuliani's girlfriend Judith Nathan in the Hamptons cost (the Politico counts eleven trips), or which trips were hid in which agency. Not all of the Mayor's Office's travel was stuck with the backwater agencies -- much of it was billed to the mayor's office. It's not clear (to us, at least) if any of the trips to the Hamptons were billed that way, though.

The comptroller found that Giuliani's office hid $143,867 worth of "non-local travel" expenses in random city agencies in 2000; they upped the slippery accounting in 2001, charging $435,215 in 2001. Given the charges for the Hamptons travel noted in the Politico piece, only a fraction of this was for the eleven trips.

In other words, Giuliani's office had something like a widespread policy of misallocation of which the trysts were just a part -- something that they'd also done for certain salaries, according to today's New York Times:

The administration of Mr. Giuliani’s successor, Mayor Michael R. Bloomberg, said in 2002, several months after taking office, that the Giuliani administration had kept the budget for the mayor’s office artificially low by paying more than $5 million in salaries through other city agencies. The agencies to which Mr. Giuliani billed the travel expenses were outside the mayor’s office.

The Times adds that the NYPD typically picked up the bill for the mayor's security detail. But a Bloomberg aide tells the New York Daily News that it is common for the security detail to bill the mayor's office and then for the NYPD to reimburse it. However, "the aide could not confirm it was past practice to shuffle costs among an alphabet soup of agencies." There lies the rub.

As a spokesman for Rep. John Doolittle (R-CA), Gordon Hinkle earned his salt answering reporter's questions about whether his boss was on his way to prison. Now Hinkle will put that experience to work:

Gordon Hinkle, 34, was named deputy press secretary for the state Department of Corrections and Rehabilitation, according to a statement issued Wednesday by Gov. Arnold Schwarzenegger's office....

Hinkle has been Doolittle's communications director and senior field representative since February. He was among a handful of aides who received subpoenas in September from a Washington grand jury investigating Doolittle for his ties to jailed lobbyist Jack Abramoff. He was asked to turn over documents but was not required to testify.

For those curious at home, if Doolittle, who is under investigation for his ties to lobbyist Jack Abramoff, were in fact convicted of bribery charges, he'd end up in a federal penitentiary, not one in the California state system, so the two aren't likely to be reunited. Oh, well.

Hinkle is the third senior Doolittle aide to jump ship in recent months.

Over the summer, we reported on an under-the-radar executive order issued by President Bush allowing him to freeze or seize the U.S-based assets of anyone, potentially including U.S. citizens, he deems to threaten "the peace or stability of Iraq or the Government of Iraq" or who "undermin(e) efforts to promote economic reconstruction and political reform in Iraq."

The executive order was written so broadly as to alarm civil libertarians, who feared it was a back-door attempt at criminalizing the antiwar movement -- which Bush could conceivably argue posed a threat to Iraq by seeking to end the U.S. military presence -- or even unwitting donors to insurgent-linked charities. A spokeswoman for the Treasury Department, Molly Millerwise, told us not to worry: "Be assured that the individuals and entities we add to this list are in full faith acting in an aggressive, violent and reckless way in financing the insurgency," she said.

Earlier this month,the nonpartisan Congressional Research Service said: actually, maybe you should worry. It released a report (pdf) exploring "the contrast between the executive order's broad language and its narrow aim" and questioning why the Treasury Department hasn't released a list of eligible Iraq-related targets for the order.

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General Lute said on Monday we'll negotiate them. Ali al-Dabbagh wouldn't rule them out. But at the White House press gaggle today, Dana Perino denied the Bush administration's interest in long-term U.S. military bases in Iraq. From AFP:

"We do not seek permanent bases in Iraq," spokeswoman Dana Perino told reporters after Lieutenant General Douglas Lute said Monday that the flashpoint issue would be part of negotiations to decide the future of US troops in Iraq.

Yawn. This standard formulation is nothing new for the administration. Zalmay Khalilzad, for instance, used the same words as far back as 2005, and the Iraq Study Group still considered the statement less than categorical. After all: what would we do if Iraq just happened to offer us open-ended access to certain military installations, or access renewable in x-number of years? Very, very rarely will a host country deny the U.S. a re-up on a military base: it took the Philippines nearly 100 years to get us out of Clark Air Base and Subic Bay Naval Base.

There's a sense in which our presence at those bases wasn't "permanent," and another in which we didn't "seek" permanence. But it's one in which the literal meaning has to be interpreted in direct contradiction to the events and issues those words describe. Luckily, the American Philological Society calls that interpretation a "Perino."

No, he hasn't forgotten. Senate Judiciary Committee Chairman Patrick Leahy (D-VT) took a step today towards contempt proceedings against Karl Rove, two of his former aides, and White House chief of staff Josh Bolten for not complying with subpoenas related to the U.S. attorney firings.

There hasn't been much movement since this summer, when Leahy issued the subpoenas. The administration claimed executive privilege for all documents and testimony sought, and said that Rove didn't need to even show up for a hearing. Rove's aides Sara Taylor and Scott Jennings appeared, but refused to discuss the firings. A subpoena for documents was sent to Bolten, and the White House refused.

Today, Leahy ruled that the claims of executive privilege and immunity were not legally valid, a necessary step toward issuing contempt citations in the committee. He didn't say when he might do that.

The timing for this might have something to do with what's going on in the House, where leaders have said they plan to schedule a floor vote to find former White House counsel Harriet Miers and Bolten in contempt for ignoring subpoenas there. That vote has been repeatedly delayed and is currently expected to take place next month.

Admitted Duke Cunningham briber Thomas Kontogiannis is extremely good at avoiding jail time, mostly thanks to his penchant for snitching on his partners in crime at just the right moment. This time -- after snitching on his nephew, financier John Michael -- his cold, cold heart is helping him avoid lockup in a different manner.

In advance of a sentencing hearing slated for next week, Tommy K's lawyers have filed papers contending that he's far too sick to do any serious time. He faces a maximum of ten years in prison, but his heart just isn't in it. The North County Times:

The businessman, in his pledge to cooperate with the government, has also admitted to as much as $100 million in mortgage fraud unrelated to the Cunningham case, according to the newly filed court documents.

But Kontogiannis -- who has been charged with bribery three times in the last 14 years -- has a grave heart condition, his attorneys argued in the documents. They asked the court to postpone the sentencing so their client can have bypass surgery.

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As a result of a freedom of information act request filed by the Electronic Frontier Foundation, a federal judge has told the Bush administration that it must release records of lobbying contracts with telecommunications companies. The ruling suggests that the government is moving too slowly, especially given the fact that Congress is scheduled to debate telecom immunity soon. (San Francisco Chronicle)

The Interior Department Inspector General completed a second investigation into DOI official Julie MacDonald for "interfering" in areas where she had no expertise and participating in decisions where she had a conflict of interest. An environmental group plans to file multiple lawsuits over some 50 decisions by MacDonald. (McClatchy)

Over the next few months FEMA will close all of the trailer camps for victims of the 2005 hurricanes. A FEMA spokesman said that the formaldehyde issue did play a role in the decision. A lawyer with Lawyer’s Committee for Civil Rights Under Law in Washington agreed that “it’s probably a good idea to get people out of trailers..., but not at the expense of making them homeless.” (New York Times)

Twelve states are suing the Environmental Protection Agency (EPA) to compel the agency to reverse course and restore all of the chemical reporting requirements that were once included in its Toxics Release Inventory program. The EPA had recently ruled that companies that released fewer than 5,000 pounds of toxic chemicals (the old rule used a benchmark of 500) could file less detailed forms that make it harder for communities to track toxic waste. (New York Times)

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It's been an eventful week for the Lott clan. On Monday, Sen. Trent Lott (R-MS) announced that he'd be retiring late this year. The next day, FBI agents raided the law office of his brother-in-law, Richard "Dickie" Scruggs. Yesterday, Scruggs, his son, and three associates were indicted for bribery.

Scruggs is a hotshot plaintiff's lawyer who famously cleaned up from lawsuits against big tobacco. His recent business has focused on Katrina-related litigation, especially against State Farm Insurance.

He'd better have a great criminal defense lawyer, because the indictment from the U.S. attorney for Mississippi's Northern District is devastating (you can read it here).

Here's the basic scheme: after Scruggs led a $80 million settlement between State Farm and hundreds of clients, an attorney who had formerly worked with Scruggs disputed the $26.5 million chunk of that settlement to Scruggs' law group. Scruggs wanted his money, and he and his associates decided that the best way to get it was to bribe the county judge presiding over the case, Henry Lackey. But Lackey went to the feds as soon as Scruggs' associates made the overture. He wore a wire. And things went downhill from there. For instance, here's what a lawyer working for Scruggs said to the judge, according to the indictment:

"...[M]my relationship with Dick [Scruggs] is such that he and I can talk very private [sic] about these kinds of matters and I have the fullest confidence that if the court, you know, is inclined to rule... in favor... everything will be good.... The only person in the world outside of me and you that has discussed this is me and Dick [Scruggs].... We, uh, like I say, it ain't but three people in the world that know anything about this...and two of them are sitting here and the other one...the other one, uh, being Scruggs...he and I, um, how shall I say, for over the last five or six years there, there are bodies buried that, that you know, that he and I know where...where are, and, and, my, my trust in his, mine in him and his in mine, in me, I am sure are the same."

The indictment is replete with similarly, um, problematic quotations. There are plenty of mentions of the "package" and the "order" among Scruggs' associates (apparently conversations on tapped phones). In October and November of this year, Scruggs, through his associates, paid the judge $40,000 (and intended to pay $10,000 more). And when it came time for the order to be prepared, the indictment quotes one of Scruggs' associates as saying to two others (one of them Scruggs' son), "we paid for this ruling; let's be sure it says what we want it to say."

It's like I said: it doesn't look good for Scruggs. As for Lott, there's no indication that he had anything to do with the scheme. Whether the impending indictment, which seems to have caught Scruggs very much by surprise, had anything to do with his sudden retirement, remains (like the many other competing theories) unclear.