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As I noted yesterday and as The Washington Post noted this morning, there really wasn't a Plan B if Daschle dropped out and so the administration is considering any number of candidates. I'd heard that a couple of obvious names, Howard Dean and John Kitzaber, both former governors and physicians, were not in play. I'd heard a familiar name: Kathleen Sebelius, the Kansas Governor and early Obama supporter. More out there names that I heard included Sen. Jay Rockefeller and Rep. Vic Snyder who is an attorney and a physician. This morning there's talk about Phil Bredesen, the popular governor of Tennessee and former Nashville mayor. Breseden is a big figure and that's clearly what Obama wants at HHS to help push through his health care reform package. So it seems as plausible to me as any name but this is the silly season when lots of names will be floated and unless you're in the room with Rahm Emanuel, Larry Summers, Melody Barnes or some other top person, I think it's really just speculation.

Here's an important point about President Obama's new restrictions on executive pay at companies receiving aid from the Treasury Department: they're not retroactive. A bank that has already received bailout money would not need to abide by the limits unless it accepts more cash in the future.

(The WaPo buries this in the middle of its story on the issue, then notes that even if they were retroactive, the rules likely would have applied to only three companies: AIG, Citigroup, and Bank of America.)

But Sen. Claire McCaskill's (D-MO) executive-pay cap bill is retroactive, applying to companies that have received past as well as pending bailout infusions. And McCaskill just said she has no intention of giving up her push to attach her version of CEO pay caps to the economic stimulus bill. Here's her statement:

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Throughout his testimony, Harry Markopolos seemed to be refining his effort to express, in one crisp sound byte, his low opinion of the SEC's investigative powers.

And right at the end, he seemed to hit on it. He told the committee (the exact wording may be a little off here, we're going from memory):

If you flew the entire SEC staff to Boston, and sat them in Fenway Park, they wouldn't be able to find first base.


Might be hard to top that.

This morning's proceedings in the Minnesota election trial show just how the court will be moving from here on out in the wake of yesterday's important rulings regarding absentee ballots: Very, very, very slowly.

Yesterday's rulings declared that Coleman can continue to advocate on behalf of a pool of 4,797 ballots -- but that he has to argue for them one by one, rather than getting the sweeping ruling he wanted to automatically count them.

And reviewing envelopes one by one is exactly what Friedberg is doing. Friedberg is going down a list of ballots with Kevin Corbid, the head elections official for Washington County, and asking for any information Corbid can give about why they were rejected. In many cases Friedberg has withdrawn the ballot after Corbid gave a satisfactory answer, while others have been left for a future ruling by the three-judge panel.

Keep in mind that there are 4,797 total ballots that Coleman is looking over. There are also 87 counties in Minnesota, and furthermore Hennepin County (Minneapolis) has its individual municipalities running the elections. So if we go through this process for every single ballot, it's going to take a long time.

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A stunning claim just made by whistleblower Harry Markpolos helps further explain how the SEC failed to catch Madoff.

Referring to Bloomberg computer terminals, Markopolos said that the agency "might have one per regional office."

Bloomberg's terminals sit on the desk of almost every trader on Wall Street, providing a steady stream of live market data. It would be extremely difficult to detect sophisticated financial fraud without this basic tool of modern trading.

We've contacted current and former SEC sources to ask whether Markopolos' claim is accurate, and we'll keep you posted.

Late Update: Reader FH writes in to say that Bloomberg terminals aren't useful for detecting fraud:

I'm a quant at a hedge fund, and have a bloomberg terminal that I share with a colleague.

You detect fraud by runnnig statistical tests on data, or I suppose by forensic accounting (which I don't know anything about). Not by watching live scrolling news feeds or flickering prices on a terminal.

I would say you should take as your model the 1994 paper by Bill Christie and Paul Schultz that detected implicit nasdaq market maker collusion as how enforcement research is going to be done.

In my view, it does not help his credibility if Markopolos is talking about the paucity of Bloomberg terminals at SEC offices.


Late Late Update:
Robert Fusfeld, who retired in 2006 as a senior enforcement lawyer in the SEC's Denver office, confirms to TPMmuckraker that when he left, that office had only one terminal.

The stimulus bill currently being debated in Congress includes more than $350 million for the WIC (Women, Infants, and Children) program, which distributes food aid to low-income families.

And JP Morgan, which famously declined to reveal how it would use its $25 billion in TARP bailout funds, has taken the opportunity to tout its debit cards as a good option for families getting WIC benefits. The bank is releasing a new paper today on "the funding, legislative and regulatory considerations" that switching to an all-debit food aid system would entail.

As this local report from Michigan illustrates, an all-electronic WIC program makes sense in terms of decreasing the stigma and increasing the convenience for families receiving aid. But I can't help but smile at the timing of JP Morgan's entreaty on a day when the president announces executive-pay limits that make its CEO publicly pouty.

Sen. Judd Gregg (R-NH), the president's pick for Commerce Secretary, just revealed during an interview with CNBC that he would recuse himself from congressional votes while his nomination is being considered by his former Senate colleagues.

It sounds like a harmless announcement -- but what this effectively does is deny Senate Democrats a gettable GOP vote in favor of Obama's stimulus bill at a time when they're desperately in need of one.

It would have been entirely conceivable for Gregg to follow Sen. Hillary Clinton's (D-NY) example and show up for Senate votes while his nomination was being considered by the chamber. Quite a disappointing move.

Late Update: We've got video of Gregg's comments, after the jump.

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For a while now, there have been suggestions that Bernard Madoff had ties to organized crime. And Harry Markopolos just told Congress that those alleged connections made him fear for his life as a whistleblower working to expose Madoff's scheme.

When a committee member referred to Markopolos' "paranoia" about his safety, he responded by referring to Madoff's "dirty money."

Here's the full quote:

I don't consider it paranoia. And the reason is, Mr. Madoff was running such a large scheme of unimaginable size and complexity, and he had a lot of dirty money. And let me describe dirty money to you. When you're that big and you're that secrective, you're going to attract a lot of organized crime money, and which we now know came from the Russian mob and the Latin American drug cartel, and when you are zeroing out mobsters, you have a lot to fear. And he could not afford to get caught, because once he was caught. And if he would've known my name and knew he had a team tracking him, I didn't think I was long for this world.

The open worship of whistleblower Harry Markopolos by members of the House committee, which had already emerged at times this morning, has reached its apotheosis.

Rep. Jackie Speier just told him:

I would like to say for the record that I see you as a modern-day Greek hero.

Harry Markopolos, the whistle-blower on the Berrnard Madoff case, just offered a remarkable cloak-and-dagger tidbit in his testimony before a House committee, demonstrating his commitment to bringing Madoff to justice.

He said he offered to go under cover, "as I was trained to in the army," -- and wearing a disguise -- in order to catch Madoff.

Here's the full quote:

In fact, I made an offer to the SEC in my October 2001 submission, if you look closely, you'll see, I offered to go undercover for the SEC, under their command and control, and have no one know where I was, except my wife, and have no contact with my family, during this time. And I would have assumed a disguise, as I was trained to in the army, and gone under cover and led that team to a successful result very quickly. I don't know what more I could do to put it on the line.


We don't either. Though the wife exception makes it seem like maybe he wasn't really committed enough.

Late Update: And here's the video:

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