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A source just sent us a copy of the working draft of the bailout plan circulating, as of about two hours ago, in the House.*

Based on our quick look, it includes a strong provision for congressional oversight, limits executive pay, and would allow bankruptcy judges to adjust mortgages in order to help homeowners, among other items. In other words, the major Democratic priorities.

Things have been changing so quickly on the Hill -- even before McCain's dramatic announcement -- that there's no telling what's occurred in the intervening period.

The source, who's a well-connected Democratic lobbyist, added in an email to TPMmuckraker that "the deal on the "bail out" is 98 percent done. Treasury has capitulated on almost every point. A draft is circulating on the Hill now. No one needs McCain to help do the remaining 2 percent."

Late Update: As we should have mentioned earlier, the draft plan also contains a provision designed to "maximiz[e] taxpayer benefits" by requiring that the Treasury "obtain warrants" (i.e. stock futures) if it makes a direct purchase of a company. That's intended to ensure that taxpayers get a share of any future profits, and it's another element Democrats have been insisting on. *Ed. Note: A well-placed Hill source subsequently tells us that this version has actually been circulating for a couple of days, and that while it's still mostly operative, it is not the latest iteration of the alternative to the Bush plan.

Last night, The New York Times -- followed by a slew of other outlets -- reported that the lobbying firm of Rick Davis, John McCain's campaign manager, has been collecting $15,000 from mortgage giant Freddie Mac. On Monday, The Times had reported that Davis had been paid to run Freddie Mac's advocacy group, the Homeowner's Alliance, until 2005.

But there's a set of questions that still remain unanswered.

The McCain campaign told the Times that Davis had stopped taking a salary from the firm, Davis-Manafort, by the end of 2006. (Davis took a leave of absence from the firm to work on the campaign.) But the Times points out that, as an equity holder, Davis continues to benefit from his firm's income.

But it's unclear exactly what the Times means by that.

Let's stipulate, first of all, that since Davis is an equity holder, he has a long-term interest in Davis-Manafort's success. The McCain camp hasn't disputed that.

But could Davis be benefiting in a more direct sense?

For instance, could Davis' agreement with Davis-Manafort allow for his share of profits to simply be deferred until he rejoins the firm? Nothing that the McCain camp has said on the subject -- including this lengthy response to the Times story from the campaign's in-house blogger -- has ruled that possibility out.

We also know that in 2007, the McCain campaign did not have Davis on the payroll, and was paying Davis Manafort for "consulting" services. Did none of that money make its way back to Davis?

It's also worth noting that the McCain camp hasn't offered any backing for its claim that Davis did indeed stop getting paid by his firm in 2006. The campaign declined a request from TPMmuckraker to provide such backing.

The bottom line is that none of the reports have fully fleshed out Davis' relationship worth Davis Manafort, and how his compensation agreement actually works.

Seems like that might be worth looking into.

Remember BMW Direct, that sketchy direct mail company that raised money for down ballot candidates, but kept most of it in "fees"?

Well, they're back.

This morning, the New York Times ran a story mentioning BMW Direct, whose COO is also chairman of the Freedom's Defense Fund -- a PAC which has been running ads with "racial overtones" in a pivotal swing county in Michigan.

Well here at TPMmuckraker, we've been talking about BMW Direct and its office-and- employee-sharing PAC since early July:

BMW Direct, a direct-mail fundraising firm, has been raising money for groups called Freedom's Defense Fund and The Madison Project.

It's not clear what Freedom's Defense Fund supposedly does. It shares an address at the same office as BMW Direct. It does not appear to have a Web site.

So we already knew that Michael Centanni was working overtime to be Chief Operating Officer of BMW Direct while he was holding down a job as the chairman of the Freedom's Defense Fund, but we weren't quite sure what it was that the FDF did exactly.

Well, it looks like they're funding targeted, swift-boat like TV campaigns against Obama in the small swing county of Macomb, Michigan.

If Macomb seems familiar, that's because it's a highly visible battleground in a swing state. As the Times describes, Macomb is populated with "white, unionized auto workers who believe Democrats [have] abandoned them for, in part, the poor and African-Americans."

And just a few weeks ago, the county was thrust into the spot-light when the Macomb GOP chair told the Michigan Messenger they'd be using foreclosure lists as a way to challenge voters on election day.

The McCain-Palin campaign is now refusing to answer questions about the one Trooper-Gate investigation they're cooperating with.

That's the investigation, of course, that's being conducted by the state personnel board, whose members are appointed by the governor.

Referring to the state's investigator, Timothy Petumenos, campaign spokeswoman Meg Stapleton told reporters Tuesday: "He has asked to keep things confidential, so we will respect those wishes."

The McCain-Palin camp's tight-lipped approach stands in contrast to its willingness to talk freely about the state legislature's independent investigation, which the campaign has refused to cooperate with.

In recent weeks, the campaign has sent a team of lawyers and PR pros to Alaska to badmouth the probe as politically motivated -- despite a bipartisan 12-0 vote to launch the investigation. McCain aides, including Stapleton, have publicly questioned the impartiality of Hollis French and Kim Elton, the Democratic legislators overseeing the investigation, as well independent investigator Steve Branchflower. They have disparaged the record of Walt Monegan, the veteran and widely respected former public safety commissioner whose firing is at the heart of the case. And they have argued that the legislature lacks jurisdiction to pursue the matter -- an argument that appears to have little legal standing.

It's also worth noting that CNN has been taken in a bit by the McCain camp's spin. The headline and lead two paragraphs of the CNN story fail to make clear that the investigation in question is the state probe -- which likely won't be completed until after the election, and is being overseen by state employees ultimately answerable to the governor -- rather than the independent investigation being conducted by the legislature. A CNN story from Monday fell into a similar trap.

Former New York City Police Commissioner Bernie Kerik's defense lawyer filed a motion in court yesterday to dismiss many of the charges against Kerik. Kerik's lawyer said that the 16-count indictment against Kerik violates rules and is generally unfair. Kerik, who is accused of accepting bribes, tax fraud, and making false statements, is due in court in January. (Newsday) Jury selection continued yesterday for the trial of Sen. Ted Stevens (R-AK), with lawyers selecting 29 of 36 possible candidates they are required to consider before narrowing to 12. Stevens, a presence in the Senate for four decades, was indicted in July for lying about hundreds of thousands of dollars worth of gifts he had received during his tenure. Lawyers said they would conclude the process today and begin opening arguments Thursday, one day later than originally planned. (The Hill)

The FBI yesterday revealed 6 of the 24 financial institutions under investigation, naming mortgage giants Fannie Mae and Freddie Mac, insurer AIG Inc., and Lehman Brothers Holding Inc. among them. The probe, which begins as lawmakers hammer out details of the $700 billion bailout, will examine company leadership and attempt to determine if they misled the public about their holdings. (AP)

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Attorneys for Sen. Ted Stevens are doing their best to discredit Bill Allen, the former VECO CEO and key witness in the government's prosecution.

In documents filed yesterday, the defense claimed that Allen would receive a windfall of $40 million in return for his cooperation with the investigation.

"Defense counsel have recently learned that Mr. Allen stands to gain an additional $40 million of a total of $70 million in 'hold back' cash from the sale of Veco to CH2M Hill if he continues to cooperate with the government and if Veco continues to avert indictment," court documents filed Monday said.

But CH2M, the company that acquired the VECO from Allen, rebutted Stevens' attorneys' claims stating that the defense "misconstrues the terms" of CH2M's agreement with Allen.

From court documents filed today:

The principal purpose of the holdback, which is a common provision in the context of typical acquisition transactions, is to cover CH2M HILL for undisclosed liabilities, such as those relating to tax, environmental, and human resources.

Use of the holdback in connection with a breach of Mr. Allen's cooperation agreement or an indictment of VECO is available only upon a showing of damages, and then only in the amount of the damages resulting from the event.

The Allen family's right to the holdback funds is not conditioned, as the defense suggests, on Bill Allen's cooperation or VECO not being indicted.

As the presidential election nears, and Wisconsin proves itself to once again be a battleground state, J.B. Van Hollen, the state attorney general and co-chair of the Wisconsin McCain campaign, is raising the specter of voting fraud. Van Hollen filed suit earlier this month, against the state Government Accountability Board (GAB) which oversees elections in Wisconsin, demanding that they verify all of the voter registrations made since January 2006 against a new state database created under the federal Help America Vote Act (HAVA) -- a Herculean task that the board had decided to forgo with just six weeks to go until the election.

The GAB claims to be in full compliance with HAVA, stating that retro-active voter registration checks through the database are not mandated by federal law.

The database compares registration data with drivers license records. It just got up and running in Wisconsin a few weeks ago, but the program seems to still be working out the kinks -- one of the reasons the GAB is hesitant to hold the database accountable for validating registrations.

"In its deliberations, the Board was concerned about preliminary data that showed more than a fifth of voters' data mismatched due to variations in names, differing data entry standards, or typographical errors," a GAB press release responding to Van Hollen's suit said. "A check conducted of GAB members' data resulted in four of six Board members' information mis-matching."

The result, state Democrats say, would be widespread disenfranchisement and suppressed voter turnout. They claim Van Hollen's demands for database checking are motivated by his role in the McCain campaign, an allegation Van Hollen has denied.

"There was no discussion with anybody involved in leadership with the Republican Party (or the McCain campaign) about this lawsuit before it was brought," Van Hollen said last Thursday.

But yesterday, the Wisconsin Republican Party chairman came forward to say he had multiple conversations with Van Hollen's deputy attorney general, Ray Taffora, specifically discussing the handling of the lawsuit, the Wisconsin State Journal reported. The Friday before, another Department of Justice attorney in the lawsuit admitted meeting with Republican Party representatives in the week before the suit was filed.

The Dane County Court will hear motions for the case tomorrow, including a motion to disqualify Van Hollen. The attorney for the GAB argues that because Van Hollen represents the state, and the GAB is a state entity, Van Hollen cannot sue a party he represents. Both the Democratic and Republican parties of Wisconsin have filed motions to intervene in the lawsuit.

The Alaska lawmakers overseeing the Sarah Palin Trooper-Gate investigation have hit back at the GOP-led effort to shut down the probe.

Last week, Republican legislators filed suit to halt the investigation, arguing that it had been inappropriately politicized by Democratic senators Hollis French and Kim Elton. This afternoon, Peter Maassen, an attorney representing French and Elton, as well as independent investigator Steven Branchflower, announced in a press release that he will be asking a judge to throw out that lawsuit.

The press release points out that the investigation was launched in July after a 12-0 bipartisan vote of the legislative council. And it asserts that the original GOP complaints "suggest that Alaska legislators with open political views should be prohibited from participating in any legislative function that might -- might -- reflect badly on Governor Palin."

The release refers to "powerful and increasingly heavy-handed national interests" as being opposed to the investigation's continuance.

And in a bid to fight back against Republican efforts to remove French from his position overseeing the probe, the release adds: "The legislature is allowed to decide for itself what it will investigate, who it will employ as investigator, and which of its members will oversee the investigation."

Maassen is with the Anchorage-based firm Ingaldson, Maassen & Fitzgerald.

It appears all but certain that the investigaiton will go forward, and that Branchflower will release a report on or aorund October 11th, as scheduled. However, it's unclear how comprehensive the report will be, thanks to efforts by the McCain-Palin campaign to ensure that Branchflower won't be hearing directly from several key witnesses, including Sarah and Todd Palin.

The Republican Study Committee (RSC), a faction of small-government House conservatives led by Rep. Jeb Hensarling of Texas, has released an alternative plan for dealing with the Wall Street crisis, in opposition to the $700 billion bailout being proposed by the Treasury Department.

The stripped-down plan advocates a two-year suspension of the capital gains tax and calls for pull privatization of Fannie Mae and Freddie Mac, which were taken over by the federal government earlier this month.

The RSC's opposition to the bailout -- coupled with concern among progressive Democrats that the measure doesn't do enough to help homeowners -- could complicate efforts by House leaders to quickly pass legislation.

According to The Hill, the RSC argues that the bailout plan "fundamentally alters the nation's free-market system in that it broadly socializes firms' money-losing mortgage assets and places the U.S. on a slippery slope whereby profits will also be nationalized."


The White House dispatched Vice President Dick Cheney to Capitol Hill Tuesday morning to help shore up support for the financial bailout of Wall Street.

. . . House conservatives are seething about the "big government" approach that they say President Bush is taking in the financial crisis. They don't like how much power it cedes to the Treasury or the price tag.

"[Cheney] is going to walk into a firing squad. I hope he brought his hunting rifle," an aide to one House conservative told FOX News.