TPM News

New York Attorney General Andrew Cuomo may demand the return of an estimated $4 billion paid in bonuses by Merrill Lynch last December, according to sources close to the matter. Cuomo also hopes to find out exactly how much Bank of America CEO Ken Lewis knew about plans for bonuses at Merrill Lynch and about the company's staggering 4th quarter losses. (Bloomberg)

Sen. Chuck Grassley (R-IA) wants to rethink funding for the National Science Foundation after it came to light earlier this week that top staffers at the organization spent long periods of time surfing the internet for pornography. Grassley has sent a letter to the Office of the Inspector General at the NSF requesting any information it has related to the revelations, which were found in a foundation report by a team lead by Grassley's finance committee aide, and is asking Congress to withhold $3 billion in funding until his request is met. (Associated Press)

A CIA employee jailed in 1997 for espionage has been able to continue spying for Russia through his 24-year-old son, according to the New York Times. Harold Nicholson was apparently able to train his son through jailhouse visits and coded letters. Nicholson was jailed for selling the names of American agents to Russia; from jail he was able to explain to Russian handlers how to identify sources working for the U.S. His son was caught transferring portions paid by the Russian government to his father. (New York Times)

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Newsweek's Michael Isikoff has obtained the letter sent by White House counsel Fred Fielding to Karl Rove's lawyer Robert Luskin, just a few days before Bush left office, instructing Luskin that Rove "should not appear before Congress" in response to any subpoenas issued. The letter makes clear that Bush is continuing to assert a retrospective executive privilege over his White House years.

The Wall Street Journal had reported the existence of the letter -- which makes clear the lengths to wish the former president is wiling to go to keep a lid on what happened inside his White House -- earlier this week. Earlier this week, the House Judiciary Committee issued a subpoena to Rove, ordering him to testify February 2 about the US Attorney firings, and the prosecution of ex Alabama governor Don Siegelman. Luskin told us he had forwarded the subpoena to the Obama White House, which must decide whether to back Bush's claim of retroactive privilege. If it doesn't, but Bush continues to assert it -- which it would appear from the letter he will -- the matter looks headed for the courts. There is no settled legal precedent to guide how a court might rule.

The Obama White House told Newsweek it's still studying the issue.

Fielding also sent a near identical letter to former White House counsel Harriet Miers, instructing her not to appear for a scheduled deposition in front of the Judiciary committee. The issue of whether Miers and another Bush White House aide, Josh Bolten, can testify is currently the subject of a court fight between the committee and the Bush White House.

The Obama White House is scheduled to file a brief in that case by February 18, in which it may make clear whether or not it intends to back Bush's executive privilege claim.

Today: RNC Elects Its Chairman Today is a big day for the Republican National Committee, as they hold the chairmanship election pitting incumbent Mike Duncan against a field of four challengers who say they can do a better job of rebuilding the party. Nobody is expected to win a full majority on the first ballot, and the big question is whether Duncan will be able to pick up support on successive ballots or whether the opposition will solidify around another candidate.

Obama And Biden To Speak On Middle-Class Task Force President Obama and Vice President Biden are holding a series of closed meetings with advisers this morning, and then at 10:45 a.m. ET they will both speak about the Middle Class Working Families Task Force. Biden is heading up the Task Force, which is charged with conducting outreach to labor, business and other advocacy groups to formulate policies helping the middle class.

Obama Meeting With Senior Military Officials The president is also holding a meeting at 1:45 p.m. ET today with senior enlisted military officials, as the new president works with the Armed Forces on his foreign policy.

Obama Expected To Undo Bush Executive Orders On Unions President Obama is also expected today to undo Bush-era executive orders on some key issues for organized labor. The Bush orders made it easier through various means for federal contractors to discourage workers from unionizing.

Day Five Of Minnesota Senate Trial This is the fifth day of the Minnesota Senate trial, with the court scheduled to reconvene at 10 a.m. ET. Norm Coleman's legal team has been questioning Ramsey County (St. Paul) elections director Joe Mansky, trying to build their case that some absentee ballots that favored Al Franken were accidentally counted twice.

Obama: Blago Removal "Ends A Painful Episode For Illinois" President Obama released this statement last night, regarding the removal from office of former Illinois Gov. Rod Blagojevich: "Today ends a painful episode for Illinois. For months, the state had been crippled by a crisis of leadership. Now that cloud has lifted. I wish Governor Quinn the best and pledge my full cooperation as he undertakes his new responsibilities."

Holbrooke To Travel To South Asia Richard Holbrooke, who has been named as the special envoy for Afghanistan and Pakistan, will be traveling to the region next week.

Obama Reportedly Eyeing GOP Sen. Gregg For Commerce Pick The White House is reportedly considering Sen. Judd Gregg (R-NH) for the role of Commerce Secretary. If this nomination were to in fact go through, it would have huge ramifications for the Senate -- New Hampshire Gov. John Lynch (D) would presumably appoint a Democrat, and along with an Al Franken win in Minnesota this would give the Dems a filibuster-proof 60 seats.

Ever since banking stocks started plummeting, or should I say replummeting, a couple of weeks ago there's been renewed interest in nationalization. In some ways the question is pure semantics. Ever since Henry Paulson gathered banking CEOs at the Treasury Department last year and told them that the government was going to stick capital injections in their aching behemoths, we crossed a line that involved partial government ownership. Even as they beg for more handouts, the bankers are, not surprisingly, resisting the idea. Yesterday at the World Economic Forum in Davos, Jamie Dimon, the head of JPMorgan Chase, denounced all the nationalization talk. "JPMorgan would be fine if we stopped talking about (the) damn nationalization of banks ... we've got plenty of capital," Dimon said. And Treasury Secretary Tim Geithner decried the term yesterday, too. I think Dimon and Geithner are basically right in the sense that we're not going to full nationalization and its a distracting term. Utilities are the better model.

But the fits and starts towards wherever we're heading are deeply worrisome. It's worth noting what happened with Credit Unions last night. Credit Unions are owned by their members and they offer, as anyone who's joined them knows, very favorable terms to those who are lucky enough to be able to sign up for one. They also have had the advantage of being relatively conservative. They don't have wild-ass hedge funds under their wings like Citigroup does. And they generally don't trade in mortgage backed securites but some do. Thus they're not immune from the financial turmoil that's unfolding.

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We noted earlier today that the new Interior Secretary, Ken Salazar, yesterday said he wanted to re-open investigations into ethical lapses at the department under Bush. And he specifically mentioned, among other scandals, the Steven Griles affair, in which the department's number two official was convicted in connection to his ties to super-lobbyist Jack Abramoff, becoming the highest-ranking administration official sentenced in the sprawling Abramoff probe.

So it's worth doing a quick refresher on what happened there.

In a nutshell, as we put it in 2007 before Griles was sentenced, he served for years as Abramoff's man at Interior. He provided the lobbyist with information that was useful to his tribal clients -- in return getting favors not for himself, but for his stable of girlfriends.

Abramoff gave $500,000 to a conservative group run by one of them, Italia Federici, a former aide to Interior Secretary Gail Norton. It was through Federici that Abramoff first gained access to Griles. Abramoff also interviewed two other Griles gal-pals for possible jobs. And Griles lied about all this to a Senate committee.

In 2007, Griles pleaded guilty to obstruction of justice and was sentenced to 10 months in prison.

Given the evidence against Griles and Federici, there was speculation that former Norton, who was cozy throughout her career with mining, logging and drilling interests, might also be of interest to investigators. (Abramoff once described Federici's group as "my access to Norton"). So if the Griles affair is indeed re-investigated, it'll certainly be worth watching where things lead.

We've put in a call to the department to get more specifics on what exactly Salazar might want to look at, and will let you know what we find out...

Chip Saltsman, the former Tennessee GOP chairman and ex-campaign manager for Mike Huckabee, has just announced that he is withdrawing from the race to be the next RNC chairman.

Saltsman's campaign was upended when he sent a gift CD to committee members by Paul Shanklin, a right-wing comedian who plays parody songs on the Rush Limbaugh show. This CD contained a track called "Barack The Magic Negro," in which Shanklin did an Amos & Andy-style impersonation of Al Sharpton ridiculing white liberals who support Barack Obama. Saltsman blamed the flap on the media.

A survey of committee members by NBC News, published yesterday morning, showed Saltsman with the declared support of only one out of the 168 members.

The full withdrawal statement that Saltsman sent to the membership is available after the jump.

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It's a truism that neoconservatives have a talent for failing upward: for repeatedly getting important things wrong and not seeing their careers suffer - for, in fact, being handed new opportunities to pursue their work (see, e.g., Kristol, Bill; and Hayes, Stephen).

Today we can add another name to that list: Laurie Mylroie, the quintessential conspiracy theorist of the Iraq War era, wrote reports about Iraq for the Pentagon as recently as Fall 2007, years after she was discredited, according to documents obtained by TPMmuckraker.

Mylroie is the author of two studies -- "Saddam's Strategic Concepts: Dealing With UNSCOM," dated Feb. 1, 2007, and "Saddam's Foreign Intelligence Service," dated Sept. 24, 2007 -- on a list of reports from the Pentagon's Office Of Net Assessment [ONA], obtained by TPMmuckraker through the Freedom Of Information Act. The ONA is the Defense Department's internal think tank, once described by the Washington Post as "obscure but highly influential."

Those who follow the neoconservative movement closely are stunned that Mylroie has surfaced again -- and especially that she is doing government-sponsored work on Iraq. "It's kind of astonishing that the ONA would come even within a mile of her," says Jacob Heilbrunn, author of They Knew They Were Right: The Rise of the Neocons. "I think she is completely discredited."

"I'm shocked," Steve Clemons of the New America Foundation says. "If this came out in 2007, she was presumably working on it in 2006, and, by that time, the fate and fortunes of a lot of these people was already switching."

Why is it so astonishing that a government agency would hire Mylroie to write about Iraq? While her career as an Iraq specialist started out auspiciously enough -- she studied and later taught at Harvard, wrote a book on Saddam with Judith Miller in 1990, and served as an adviser to the 1992 Clinton campaign -- Mylroie later veered outside the mainstream and became enamored with theories rejected by virtually everyone else in the field.

Heilbrunn suggests Mylroie has been underappreciated as one of the intellectual progenitors of the Iraq war. "She was one of the original fermenters of the idea that Saddam Hussein had these intimate ties with Al Qaeda," he says.

In the definitive profile of Mylroie, written for the Washington Monthly in 2003, terrorism analyst Peter Bergen locates Mylroie's turn in the wake of the 1993 World Trade Center bombing, when she developed her theory that the Iraqi government was behind the attack. Bergen sums up the animating principle of Mylroie's work: that "Saddam was the mastermind of a vast anti-U.S. terrorist conspiracy in the face of virtually all evidence and expert opinion to the contrary." (For a good example of Mylroie Logic, read her Sept. 13, 2001, WSJ op-ed "The Iraqi Connection," in which she argues that Iraq had a hand in 9/11 because ... well, mainly just because.) Bergen goes on:

Mylroie believes that Saddam was not only behind the '93 Trade Center attack, but also every anti-American terrorist incident of the past decade, from the bombings of U.S. embassies in Kenya and Tanzania to the leveling of the federal building in Oklahoma City to September 11 itself.

Mylroie's theories wouldn't have mattered - except that she had the ear of Richard Perle, Paul Wolfowitz, Scooter Libby, Jim Woolsey, et al. Perle blurbed Mylroie's January 2001 book, Study of Revenge: The First World Trade Center Attack and Saddam Hussein's War against America, as "splendid and wholly convincing."

In response to TPMmuckaker's questions about the selection process for ONA researchers, a DOD spokesperson said in a statement: "All aspects of researchers and research institutions are considered, with an 
emphasis on obtaining the widest range of possible intellectual approaches in order to provide a fully balanced approach to the analysis of future developments."

And how did the Pentagon use Mylroie's Iraq reports? Says DOD: "These reports were part of a multi-scope research effort to identify the widest possible range of analysts whose expertise was likely to generate insights and concepts which would contribute to Net Assessments on-going work to develop and refine trends, risks, and opportunities which will shape future (2020) national security environments."

Mylroie's work for the Pentagon is all the more interesting because, as her star faded along with the Iraq war, she largely disappeared from the public sphere. Her most recent public writings consist of a nasty spat with other writers on the right in 2008. The Weekly Standard's Stephen Hayes, himself a prominent perpetuator of falsehoods about Saddam-Al Qaeda links, is one of a group of journalists who cannot stomach Myrloie out of annoyance that her work helps to discredit their own, somewhat less feverish theories. Hayes has reported, with distaste, that Mylroie believes "al Qaeda is little more than an Iraqi 'front group.'" For more, read Daniel Pipes on "Laurie Mylroie's Shoddy, Loopy, Zany Theories - Exposed."

While Mylroie is often identified as an "adjunct fellow" at the American Enterprise Institute, an AEI spokesperson calls that category "a very loose relationship" and says that the main link between Mylroie and the think tank was the publication of her book back in 2001.

Laurie Mylroie did not respond to emails seeking comment. The DOD spokesperson has promised to send me copies of Mylroie's Iraq reports. We'll tell you more when we hear anything.

Rod Blagojevich has been convicted in his impeachment trial by the state Senate, removing him from office, making him as of now the former governor of Illinois.

The vote by the Illinois state Senate just came to a close, with a unanimous 59-0 verdict against him. A threshold of 40 was required to convict, and the impeachers definitely got more than that.

Late Update: The Illinois Senate has just taken the next step in this process, voting unanimously that former Gov. Rod Blagojevich is disqualified from holding public office in the state of Illinois ever again.

Much of the debate over the potential effectiveness of Congress' economic stimulus bill centers on how quickly the $800-billion-plus can be spent.

The non-partisan Congressional Budget Office -- formerly run by Obama's new budget director, Peter Orszag -- has estimated that 64% of the House stimulus money can be disbursed within the first 18 months. Meanwhile, Orszag himself has promised to let loose 75% of it into the economy.

Senate Budget Committee Chairman Kent Conrad (D-ND), who's been concerned with thae spend-out rate in general, recently asked the CBO to evaluate ways that the stimulus money could be spent quicker. The CBO's first answer? "Waiving requirements for environmental and judicial reviews" of the impact of stimulus spending projects, according to a letter released today (and downloadable here).

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Women's health advocates were dismayed this week to see the removal of family-planning aid from Congress' economic recovery bill after a push by Republicans to politicize a generally cut-and-dry issue of Medicaid waivers. (Time has some good background here.)

But the dismay may not last long. A source present at today's White House signing ceremony for the Lilly Ledbetter bill tells me that President Obama gave assurances that the family planning aid would be done soon -- perhaps as soon as next week, when the House is set to take up a spending bill that would keep the government funded until October.

Obama emphasized that the family-planning aid "makes the budget look better, it's a money saver," the source said. In fact, removing the need for Medicaid waivers for family planning saves states an estimated $700 million over 10 years.

By removing the family-planning aid from the stimulus at Obama's request, Democrats "were giving a nod to the Republicans, believing they would act in good faith," the source added. And given how many GOPers voted for the stimulus bill, sounds like the family-planning aid is back on track.