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Those directives issued by President Obama last week, reversing the Bush administration's policy of secrecy, have really shaken things up.

Earlier this week, the House Judiciary committee subponaed Karl Rove for testimony in the US Attorney firings matter. That move appears to have been in response to the Obama's moves, since Rove had long been claiming executive privilege backed by President Bush.

Now, McClatchy reports, the ACLU has asked the new administration to release Bush Justice Department memos justifying harsh interrogation methods, eavesdropping, and secret prisons.

The Bush administration had long refused to release them, citing national security concerns, among other things.

It's clear that Obama's moves -- specifically, his rescinding of a Bush DOJ memo that gave backing to agencies when they refused to disclose material, and his issuing of an executive order urging agencies to take a broader view of the Freedom of Information Act -- triggered the request.

"The president has made a very visible and clear commitment to transparency. We're eager to see that put into practice," an ACLU staffer told McClatchy.

Pro Publica has a rundown of the missing memos.

As McClatchy notes, Obama's nominee to head the Office of Legal Counsel, Dawn Johnsen, has written articles suggesting she thinks that in general, such memos should be released.

So this could be another set of crucial Bush records that will finally see the light of day.


After weeks of delays, the Senate Judiciary committee has voted by 17-2 to send Eric Holder's nomination to the full Senate.

In a statement, committee chair Pat Leahy said:

Mr. Holder has demonstrated that he is committed to restoring the rule of law, and, as President Obama said in his inaugural address 'to reject as false the choice between our safety and our ideals,'" said Leahy. "I am more convinced than ever that Eric Holder is a person who will reinvigorate the Department of Justice and serve ably as a key member of the President's national security team. He will pursue the Justice Department's vital missions with skill, integrity, independence and a commitment to the rule of law.

The two "no" votes were from conservative Republicans John Cornyn and Tom Coburn.

Leahy's full statement follows after the jump...

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In his remarks earlier this morning about his stimulus plan, Obama touted as a website where Americans "will be able to see how and where we spend taxpayer dollars." Actually the site is empty pending the passage of the bill. Basically, it's a placeholder for after the bill is passed. Shouldn't there be something in there about the competing proposals? The options? Etc. It seems kind of lame for such a techno-savvy White House. Besides after the bill is passed how quickly are they really going to be able to update how Topeka spends it's sewer money?

Amidst the confirmation of Eric Holder and the president's first dis of the Sidwell Friends School--he mocked the institution, not by name, but for cancelling school today in contrast to hardy Chicago where the coating of ice that closed D.C. schools, public and private, would be all but ignored--there was some interesting news.

The counsel's office had some interesting appointments. One is the highly regarded Karen Dunn, a longtime Hillary aide and Yale Law grad, whose presence further solidifies the number of former Clinton aides in the Obama White House. (Like her friend, Howard Wolfson, she's a Nita Lowey alumnus, too.) Susan Sher, the former corporation counsel for the City of Chicago also joins the counsel's office strengthening the Chicago contingent. Maybe most interesting is Norm Eisen, one of the founders of CREW (Citizens for Responsibility and Ethics in Washington) and a special counsel for ethics issues helps carry through Obama's commitment to ethics reform. Friends of General Counsel Greg Craig will note that he's brought his assistant, Catherine Whitney, over from Williams & Connolly, too. Neal Wolin, a veteran of the CIA and the National Security Council, will be there, too suggesting a return to a traditional legal view of those agencies. This will be an interesting office to watch.

The counsel's office is important in and of itself but it's also a springboard to many other jobs. Lisa Brown, who holds the important position of Staff Secretary in the White House--the person in charge of paper flow--was Al Gore' s counsel. From John Dean to Fred Fielding to Lloyd Cutler, it's always at the center of things. Putting a Hillary alum and a special ethics counselor in there makes the mix that much more intriguing.

What would you have to do not to get a bonus?

AIG, the insurance giant that was essentially nationalized in September, has confirmed to the Associated Press that it's paying bonuses to employees who sold credit default swaps -- the very deals that helped cause millions in losses, leading to the company's collapse.

According to news reports, the bonuses amount to $450 million -- or $1.13 million for each of the 400 staffers in the financial products unit.

In a statement, an AIG spokeswoman confirmed the bonuses, but not the dollar figure:

We adopted and disclosed this contractual retention program months before the government provided support to AIG. We did so because it was clear, given the market environment, that we would need to retain employees to manage the complex issues arising in our Financial Products business, which we are now unwinding.

An expert tells AP that it's possible AIG was contractually obligated to pay the bonuses. But that points up a larger problem: the TARP didn't allow the government to invalidate those agreements, as a bankruptcy judge would have been able to do. Since AIG and other firms were essentially bankrupt, there's a good argument that the same rules should apply.

Former Merrill Lynch CEO John Thain has come in for criticism (by TPMmuckraker, among others) for signing off on billions in bonuses, on an accelerated schedule, despite seeing massive losses and a government assisted takeover by Bank of America.

Attorney General nominee Eric Holder was approved by the Senate Judiciary Committee this morning on a 17-2 vote.

The full Senate must sign off on Holder before he can officially join Obama's DoJ, but today's vote effectively removes the political obstacles that stood in the way of full confirmation. We'll let you know soon which two Republicans voted no on Holder.

Late Update: The two GOP nos were Sens. John Cornyn (TX) and Tom Coburn (OK).

Republicans have blanketed the airwaves in the past week, carrying a single message that's been well-amplified, with almost no skepticism, on MSNBC ...

[Sen. John] ENSIGN [R-NV]: You know, politically, what we're trying to do is choose the right policy, something that actually stimulates the economy, that creates jobs. ... If we could lower the corporate tax rate, that would be one of the best things that we could do to make American business more competitive in the world and actually help stimulate the economy.

... not to mention CNBC:

[Rep. Spencer] BACHUS [R-AL]: We have said let's do tax cuts, let's let the American people make the decisions on how they'll spend the money. That will stimulate the economy more than bringing all that money to Washington and then distributing it out in all sorts of government programs.

... and, of course, on Fox News:

[Rep. Mike] PENCE [R-IN}: What House Democrats have done here is get out a dusty old wish list of liberal spending priorities, dump it all in a bill, and throw in a few token tax cuts on top of it. That's not going to create jobs. It's not going to put this economy back on its feet.

There's only one problem with the stimulus debate's focus on whether the percentage of spending on tax cuts should be 40 or 20, as opposed to the outright merits of such breaks: Tax cuts are an ineffective economic stimulus.

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Sources reveal that a probe into the actions of a Houston-based industrial waste-handling firm is focusing on several Detroit politicians, including former mayor Kwame Kilpatrick. Others mentioned to the Detroit Free Press were Bernard Kilpatrick, Kwame's father, and Monica Conyers, the president of the Detroit City Council and the wife of Rep. John Conyers (D-MI). Sources say that there is still little direct evidence that Synagro Technologies gave any bribes to city council members in order to win a $1.2 billion contract with the city. (Detroit Free Press)

Hartford mayor Eddie Perez was arrested on Tuesday for bribery related to the renovation of his home. Perez allegedly used a city contractor to do $40,000 worth of renovations to his kitchen and bathroom and only paid $20,000 for it even after investigators started asking questions. The contractor, Carlos Costa, had previously held a $5 million streetscape contract with the city. (Associated Press)

American International Group, the troubled insurance giant that has seen eye-popping losses and was essentially nationalized in September, has announced that it will pay bonuses to employees of a division that sold credit default swaps for the company. These are the same risky financial products that caused the insurer's staggering losses. According to an expert, it is possible that AIG is contractually obliged to pay bonuses to its employees. This illuminates a shortcoming of the government's TARP program, of which AIG has been the largest recipient. (Associated Press)

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Call them the mini-Madoffs: Investment advisers accused of conducting Ponzi scams that echo the one allegedly pulled off by the disgraced Wall Street money manager.

In recent weeks, both the Wall Street Journal (sub. req.) and the New York Times report, a spate of mini-Madoffs has come to light

The Journal looked at SEC records and found an increase in cases in which the agency alleged Ponzi schemes. Last year, it brought at least 23 Ponzi cases, up from 15 in 2007. This year, it has already filed four. The paper explains why:

More schemes are emerging now, experts say, in part because of the economic downturn. Tough times have prompted people to seek to cash in their investments, only to find out their money is missing. New investment also dries up in slumps, making it harder for fraudulent funds to replenish their coffers and make the payments needed to keep their operations going.

Let's go down the list of the mini-Madoffs to emerge recently:

- Arthur Nadel, the missing Florida hedge-fund adviser, was arrested yesterday, accused by the feds of defrauding clients to the tune of millions of dollars.

- Nicholas Cosmo, a Long Island money manager, raised more than $370 million, promising eye-popping returns of 48 percent by funding commercial loans. But he lent little money and only about $746,000 remains, according to an affidavit. Cosmo surrendered to authorities Monday.

- Joseph S. Forte, an investment manager in Phildelphia, was accused by the SEC earlier this month of running a Ponzi scheme since at least 1995, claiming returns as high as 38 percent and raising $50 million.

- Darren Palmer, an Idaho Falls money manager, is being probed by state authorities, with investors claiming they lost up to $100 million in a Ponzi scheme.

- Marcus Schrenker, an Indiana financial adviser, was arrested in Florida earlier this month after apparently trying to stage his own death in a plane crash. He faces charges, in both states, of swindling investors.

- Rod Cameron Stringer of Texas is alleged by the SEC to have set up a Ponzi scheme that lured elderly investors, claiming annual returns of 61 percent.

- Robert C. Brown of California is accused by the SEC of using millions in clients' money "to pay for lavish personal expenses, such as upkeep on his Ferrari, limousine services and shopping trips."

- Anthony James of Florida set up a "classic Ponzo scheme", says the SEC, through which he got access to at least $2.4 million in client funds, which he used to pay for a six-bedroom home, a Porsche and season tickets to the Miami Heat.

There are more.

Sounds like the SEC's plans to beef up their enforcement unit can't happen quickly enough.

The House of Representatives is slated to vote on its $825 billion economic recovery bill today, as Republicans fret over the level of bipartisanship on display and Democrats largely look the other way.

But what can we really expect after all the noise of the past few days? Will last night's dinner at the White House really sway any centrist GOPer to support the stimulus? Will the bill's relatively weak spending on infrastructure redevelopment persuade any liberal Dems to vote no? A few lawmakers to watch:

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