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A couple has been charged with selling fake diplomas from fictitious universities over the Internet. The couple operated over 120 nonexistent schools and made well over $7 million through diploma sales. They are awaiting sentencing on Wednesday. (New York Times)

New U.S.-style proposals are being discussed by the U.K. Serious Fraud Office that would allow companies involved in bribery abroad to avoid punishment by admitting guilt and paying financial penalties. These proposals could help delays into U.K. corruption investigations, such as that of BAE Systems. (Financial Times)

U.S. Immigration and Customs Enforcement agents assisted last week in investigating the kidnapping of a relative of Rep. Silvestre Reyes (D-TX). The kidnapped woman is a Mexican citizen and a distant relative of Rep. Reyes' wife. The woman, Erika Posselt, was released Sunday after a ransom was paid. (Washington Post)

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When Governor Jim Gibbons (R-NV) was photographed in a parking lot, arms around a female companion, his reply was that he was merely comforting a friend. "She was upset, crying," he told the Nevada Appeal, who published the pictures on Friday. "She couldn't catch her breath. I put my arms around her."

But earlier that same week, the Governor had given greater color to his relationship with the woman, a former Playboy model and ex-wife of a former Reno mayor, whose hand he held while she was giving birth. From the Las Vegas Sun:

"You know what, I've know Leslie for 20 plus years. In fact, Leslie is a wonderful dear friend and if they are implying there is anything romantic there, they are wrong.

"She is helping me get through a very troubling time in my life by being a friend. What troubles me is all these people speculating every time I bump into somebody that happens to be of the opposite sex. You can talk to Leslie, but I think she will tell you if (there's something that) takes the romance out of a friendship it's being there when her child is born. I held her hand when her child was born.

"That's how close a friend we are."


And now that the Governor has explained that nothing turns him off quite like childbirth, he'd like to get back to work, please:

Asked if this was romance, he replied, "Absolutely not."

"I put my arm around her shoulder. I was talking to her. I had to get close because I had to get over the noise of the crowd."

Asked about the photographs, he replied, "I think this is about my private life. I'm focusing on balancing the budget. I think this is such nonsense. The public wants to know what we're doing to preserve and protect the people of the state of Nevada."

A couple weeks ago, we learned that Iraq's oh-so-very-sovereign Ministry of Oil was about to award a round of no-bid contracts to several western oil companies that would bring the large multinationals back into Iraq for the first time in more than 35 years.

The Bush Administration insisted that they were not going to interfere in this deal, which was between Iraq's democratic leaders and private-sector companies.

But today's New York Times report confirms what many people have suspected for years -- that U.S. officials are working behind the scenes to influence the future of Iraq's massive oil reserves.

In their role as advisers to the Iraqi Oil Ministry, American government lawyers and private-sector consultants provided template contracts and detailed suggestions on drafting the contracts, advisers and a senior State Department official said. ... The American government lawyers provided specific advice, the State Department official said, like: "These are the clauses you may want. You will need a clause on arbitration. You will need this clause to make this work."
Near the end of the story, the Times reports:
Advisers from the State, Commerce, Energy and Interior Departments are assigned to work with the Iraqi Oil Ministry, according to the senior diplomat. In addition, the United States Agency for International Development has a contract for Management Systems International, a Washington consulting firm, to advise the oil and other ministries. The agency's program is called Tatweer, the Arabic word for development.
A Washington consulting firm? Actually, Management Systems International is a subsidiary of a massive Australian company, Coffey International Ltd. focusing on mining, oil and gas infrastructure projects.

And guess who some of their clients are? Global oil companies including Cheveron, Royal Dutch Shell and BP.

So the company that touts big oil as clients is helping the Iraqi government negotiate with those companies -- and getting paid by the U.S. government to do so.

But USAID and the consulting firm they hired don't call that a conflict of interest, the call it "mentoring."
"The legal department of the Ministry of Oil passed us a draft of the contract," Samir Abid, a Canadian of Iraqi origin who is an employee of the Tatweer program, said in a telephone interview. "They passed it to us and asked for our comments because we were mentoring them."
U.S. officials suggested that the Iraqi's needed their help since they haven't dealt with western oil companies since the 1970s. That's when, you might recall, Saddam Hussein kicked out all the international oil firms and nationalized the Iraq National Oil Company.

The Times wrote Sunday, in a story about Iraq's oil in the Week in Review section, many oil experts say that Iraq is among the easiest places in the world to pull oil out of the ground.

From Politico:

House Judiciary Committee John Conyers has issed a subpoena to the Justice Dept. for the unredacted interviews with President Bush and Vice President Cheney on former CIA operative Valerie Plame, as well as numerous other documents sought unsuccessfully by Democrats for years.

Conyers is also seeking FBI notes of interviews with some top former White House officials, including Karl Rove, Lewis "Scooter" Libby, Scott McClellan, Dan Bartlett and Andrew Card.

The committee also wants unreleased memos from DOJ's Office of Legal Counsel, including an Oct. 23, 2001, memo related to use of American military forces to combat terrorism within the United States.


Conyers has been asking for those documents for a long time.

Facing a massive lawsuit, the U.S. Justice Department is opting to give a $5.8 million settlement to Steven Hatfill, the bio-weapons expert publicly tagged as a "person of interest" in the anthrax-in-the-mail scare from October 2001.

The Department of Justice issued a statement this afternoon:

By entering into this agreement, the United States does not admit to any violation of the Privacy Act and continues to deny all liability in connection with Dr. Hatfill's claims.


Hatfill, whose lawsuit against the New York Times was dismissed last year, will receive the lump sum of about $2.825 million and the government will also purchase for him a $3 million annuity that will pay him $150,000 each year for 20 years, DOJ said.

Times columnist Nicholas Kristof was among the first to disclose Hatfill's name in 2002.

The lawsuit charged the Department of Justice with leaking his name to reporters.

The anthrax case remains unsolved. The DOJ statement said:

"The government remains resolute in its investigation into the anthrax attacks, which killed five individuals and sickened others after lethal anthrax powder was sent through the United States mail. We commend the agents and law enforcement personnel who have devoted countless hours to the pursuit of the perpetrator of this horrible crime, and we reassure the public and the victims that this investigation remains among the Department's highest law enforcement priorities."


Late Update: This story was updated from earlier versions to reflect the total value of Hatfill's settlement package.

From the AP

Richard ''Dickie'' Scruggs, the attorney who built his career by taking on tobacco, asbestos and insurance companies, was sentenced Friday to five years in prison for conspiring to bribe a judge.

U.S. District Judge Neal Biggers Jr. called Scruggs' conduct ''reprehensible'' and fined him $250,000. The judge handed down the full sentence requested by prosecutors despite arguments from the defense for half that time in prison.

Scruggs appeared to nearly faint as the federal judge scolded him for his conduct. Some people in the courtroom gasped as Scruggs started to sway side to side and his attorney grabbed his arm to steady him. He had to be seated before the sentence was read.

''I could not be more ashamed where I am today, mixed up in a judicial bribery scheme,'' Scruggs told the judge.
Scruggs's brother-in-law is Sen. Trent Lott (R-MS).

Serving in Congress and trying to maintain two places to live -- one back home and one in Washington -- can get expensive. (Not everyone has the money for a mansion like Hillary Clinton.)

Luckily, Sen. Norm Coleman (R-MN) has found a cheap place to crash when he's working inside the beltway -- renting an apartment from Republican operative and "robo-call" expert Jeff Larson. Larson and his wife bought the townhouse on Capitol Hill in March 2007 for $989,900, according to National Journal.

Coleman pays just $600 a month for a one-bedroom place in a Capitol Hill townhouse. That's remarkably cheap for the neighborhood, and a fraction of the $1,780 monthly rent Coleman paid on the Washington apartment he left in June 2007, according to a report this week from the National Journal.

Well, at least he usually pays. As the magazine discovered, Coleman doesn't pay his rent as promptly as many Americans.

Earlier this month, after National Journal questioned Coleman and Larson about the living arrangement, the senator said he discovered that his rent for last November and January had not been paid. In mid-June, Coleman covered the back rent with a personal check for $1,200 made out to Larson and signed by the senator's wife. Last year, Coleman sold furniture to Larson to cover one month's rent, according to Larson. And Larson held on to yet another month's rent check for three months, cashing it a few days after NJ's inquiries.


Coleman told the magazine that he moved into Larson's building to cut costs in July 2007. Coleman's Senate salary is $169,300.

It's unlikely Larson will evict Coleman anytime soon, since Larson has derived a lot of financial benefit from his relationship with the senator.

Larson's St. Paul-based company, FLS Connect, is a critical component of Coleman's political operation. The firm, which has raised money and hustled up voters for Coleman, has been paid about $1.6 million since mid-2001 by Coleman's Northstar Leadership political action committee and two Senate campaigns, according to reports filed with the Federal Election Commission. Larson serves as the PAC's treasurer and provides it with office space in St. Paul; Coleman's Senate campaign stopped renting space from Larson last year.


FLS Connect is a go-to shop for the Republicans nationwide for fund raising and providing "robo-calls." In fact, the firm was targeted by the attorney general in Indiana for violating that state's automated call laws. The firm is also linked to The DCI Group, a lobbying firm that came under scrutiny for its work in Myanmar and its ties to the John McCain campaign. They're known for "Astroturf" organizing as well as robo-calls.

Also, Larson's wife has worked for Coleman:

Larson will get no argument on that score from his wife, Dorene Kainz, who went to work for the senator in September 2005 handling requests from Coleman's constituents in his St. Paul office. Senate records show that she has been paid $101,218 through March 31.

Yes, the caption at left is correct. That's Governor Jim Gibbons (R-NV), in a warm embrace with a former Playboy model who is most definitely not his wife.

Last we heard in the Gibbons v. Gibbons fiasco, the governor and the First Lady had called a truce in their acrimonious divorce proceedings.

But since that joint statement, Gibbons has been implicated in other acts of philandering: hundreds of text messages to a female "friend" and affectionate outings with younger women-- the most recent of which was caught on film.

The Nevada Appeal this morning, published a series of pictures of Gibbons and a female companion at a rodeo in Reno.

Gibbons responded in a brief statement to the Appeal:

What it shows, according to the governor, is him comforting a stressed out friend. "She was upset, crying," he said during a quick hallway interview with our reporter, who'd been trying to get a comment from the governor or his staff for two days. "She couldn't get her breath. I put my arms around her."


So who is the mystery parking lot woman seeking solace on Gibbons' shoulder?

According to the Appeal:

[W]e did a little checking on our own and now know his companion to be the ex-Playboy-model, ex-wife of an ex-Reno mayor. She is not the woman with whom he has widely been accused of having an affair of late and with whom he exchanged hundreds of text messages at all hours. But he has been seen around Reno with this woman, too. In fact, there are cell phone pictures of the two together at a Reno restaurant posted on area blogs.


Just for some context, the Appeal's photo spread comes in the midst of a huge budget crisis in Nevada.

Was the Air Force lobbying against the Pentagon on Capitol Hill?

This morning The Hill reports:

The Air Force has been ordered to investigate whether officials lobbied members of Congress improperly on a plan to merge military bases.

Deputy Secretary of Defense Gordon England asked the secretary of the Air Force --days before he was forced to resign -- to conduct an internal investigation after Sen. John McCain (R-Ariz.) raised concerns over the Air Force's actions.

McCain, the GOP candidate for president, believes a provision in the 2008 emergency supplemental sponsored by Sens. Daniel Inouye (D-Hawaii) and Ted Stevens (R-Alaska), the leading defense appropriators, was the result of lobbying by Air Force officials. Similar language is in the House bill.

The measure would allow a military service secretary or the head of another federal agency to delay or veto a decision by the Base Realignment and Closure Commission (BRAC) on "joint basing," an initiative that requires branches of the military to consolidate bases to save money.

A strange thing happened at a House Oversight hearing today, with a witness accusing a congressman of hacking a secure website, and claiming he was currently being investigated by the FBI.

The Committee hearing examined questionable practices at Pedernales Electric Cooperative. During the interrogation Rep. Jim Cooper (D-TN) cited documents that he said came from "secret, password-protected website" of the National Rural Electric Cooperative Association, in testimony today in front of the Committee

In response, NRECA President Glenn English, a former Congressmen from Oklahoma, claimed that the NRECA counsel had told him that Cooper was in the process of being investigated by the FBI for taking unauthorized information from their website.

As Roll Call reports, the allegation upset the hearing and unleashed a flurry of denials:

Cooper responded that someone had given him authorization and provided him with a password to download the documents, but English said that only he or a limited number of other officials from the organization could authorize access. Chairman Henry Waxman (D-Calif.) immediately gaveled the hearing to a close.

An FBI spokesman said the bureau "doesn't comment on accusations made by others concerning its investigative activity."

Cooper spokesman John Spragens said, "This is a bogus attempt to intimidate Congress from trying to investigate an industry. The idea that a Congressman would be under investigation for conducting an investigation is laughable. That's why we have the Constitution."

Spragens added, "We have no reason to think that Congressman Cooper is under investigation."

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