TPM News

We've already posted several clips of our inauguration interview with the chairman of the House Financial Services Committee, Barney Frank (D-MA), but the need to keep those videos short -- links to them are here, here, and here -- left some of his most newsworthy statements on the cutting-room floor.

After the jump, find a transcript of the portions of the Frank interview that didn't make it into the clips.

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The Obama administration has instructed military prosecutors at Guantanamo Bay to seek a 120-day suspension of legal proceedings. One of the first cases to go on hold was that of Omar Khadr, a Canadian citizen accused of killing an American soldier in Afghanistan when Khadr was 15. It is unclear whether any other ongoing trials will be postponed, as three of five defendants are representing themselves and not certain to agree to Obama's request. (Washington Post)

In another one of his first actions as the new president, Barack Obama issued an order to all federal agencies to stop the enactment of any new regulations until the administration can review them. It will take much longer to undo regulations put in place by the Bush administration before Obama was sworn in. In its final months, the Bush administration issued numerous orders weakening environmental protections and workplace safeguards among other things.(Associated Press)

Embattled Illinois governor Rod Blagojevich missed a second deadline Tuesday to file a response to impeachment charges. The Senate will assume a plea of "not guilty" and proceed with impeachment hearings. The tardiness of Blagojevich's response may be related to the resignation from the impeachment case of his defense team, one member of which referred to the impeachment as a "lynching" and the outcome as a "forgone conclusion." (Associated Press)

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Today: Obama's First Full Day In Office President Obama has a full day ahead of him on both the foreign and domestic policy fronts. He'll be meeting today with Sec. of Defense Robert Gates and multiple high-ranking military officials to discuss his dual goals of withdrawing from Iraq and increasing the U.S. commitment in Afghanistan, and will have another meeting with his economic team to discuss his stimulus package.

Hillary's Confirmation At State Expected Today The Senate is expected to vote today to confirm Hillary Clinton's nomination to be Secretary of State. The nomination was held up yesterday by Sen. John Cornyn (R-TX), who objected to a unanimous approval and instead secured an open debate and a recorded vote for today.

More Litigation In Minnesota Today The three-judge panel appointed to hear Norm Coleman's lawsuit against the Minnesota election result is meeting at 3:30 p.m. ET to hear arguments in Al Franken's motion to dismiss the case. A full dismissal seems unlikely, but it is quite possible that the court could dismiss some of Coleman's individual claims, and then proceed to trial on the pared-down suit.

Geithner Confirmation Starts Today Timothy Geithner's confirmation hearing to be Secretary of the Treasury begins today. The Senate Finance Committee appears to be pulled in two directions -- Geithner's reputation for competence and the need to install an economic team quickly, versus the embarrassment of Geithner's own personal tax problems -- but he is still expected to be confirmed with some Republican support.

Obama Seeks Pause In Gitmo Trials President Obama has already ordered prosecutors at Guantanamo Bay to request a 120-day freeze in the military trials, as the new administration reviews and likely changes the policies involved. Said one of the defense attorneys: "We welcome our new commander-in-chief and this first step towards restoring the rule of law."

Paterson: I Still Haven't Decided On Senate Pick In an interview with CBS News yesterday evening, Gov. David Paterson (D-NY) said he still hasn't decided who he will appoint to Hillary Clinton's Senate seat, but that it will happen in the next few days. Paterson said he was picking from among "10 or 11" candidates, all of whom he found to be impressive as individuals.

Obama On The Oath: "We've Got A Lot Of Stuff On Our Minds" In an interview with ABC News, President Obama sought peace and reconciliation on the issue of the awkward rendering of the oath of office yesterday by Chief Justice Roberts and himself. "Well, listen, I think we were up there, we've got a lot of stuff on our minds and he actually, I think, helped me out on a couple of stanzas there," said Obama. "Overall, I think it went relatively smoothly and I'm very grateful to him."

Now that Barack Obama has spent two years campaigning, won an election and has now been sworn in, the difficult part will begin tomorrow: His first full day of work as President of the United States.

Obama will reportedly be meeting tomorrow with Sec. of Defense Robert Gates, Chairman of the Joint Chiefs Adm. Mike Mullen, Gen. David Petraeus, and others to discuss the wars in Iraq and Afghanistan. Attending via video teleconference will be Gen. David McKiernan, the commander in Afghanistan, and Gen. Ray Odierno, the commander in Iraq.

Also up for tomorrow, the new White House has confirmed, will be a meeting with his economic advisers, expected to take place in the afternoon. The big task there will be discussion on his economic stimulus plan.

It should also be noted that Obama performed some significant official acts today, as well. He issued an order halting all pending regulations that were issued by the lame-duck George W. Bush but have not yet taken effect. And the Senate voted unanimously to confirm six cabinet officers.

The only fly in the ointment was that Sen. John Cornyn (R-TX) held up the unanimous approval of Hillary Clinton to become Secretary of State, requiring an open debate and a recorded vote to be held tomorrow.

Even on this day, of all days, the Minnesota Senate disaster keeps on going.

Late last week the Coleman legal team obtained a subpoena for state elections director Gary Poser, who was in charge of running the recount, ordering him to hand over internal correspondence relating to nearly every controversial topic you can think of.

Now the state Attorney General's office has come back with their own motion to quash the subpoena, arguing that the documents being requested are not legally within the bounds of the contest, and that the state is not required to take up its time to produce all of them.

The precise legal arguments in this latest squabble seem a bit unclear, as does the significance of the development itself. But one thing is easy to understand: Not even the inauguration of a new president can stop the lawyers from arguing in Minnesota.

It's ebullient here. Was just walking through Georgetown which is crowded with happy revelers but if you've looked at the markets you know the Dow is off about 4 percent at 3:30 and even if it were to recover, it's shows how much deep despair there is about the banking system despite the cappucino, Red Bull and amphetamines that have been applied to the system. A few weeks ago, Bank of America, with its takeover of Merrill Lynch looked like one of the few stable survivors, along with JP Morgan Chase, of this era. Now the Charlotte-based behemoth is in free fall, down nearly 25 percent this afternoon.

All of this strengthens Obama's already very strong hand with Congress. From the western steps of the Capitol, the 535 members saw the power of that crowd spread across the mall. Churlish Republicans may be able to dis Obama, but it's hard to think of any Democrat who is going to screw with him at this point. Power waxes and wanes but the combination of DC-based adulation and Wall Street woes, gives Obama an incredible boost going into his first day at the office.

Ted Kennedy has been taken to the hospital, the news networks have reported, after he suffered a seizure a short time ago at the inaugural lunch on Capitol Hill.

A few minutes ago, Fox News showed Kennedy being taken away in an ambulance as John Kerry, Chris Dodd, Orrin Hatch and others looked on.

Speaking to reporters just now, Walter Mondale said that Kennedy and others at the table were telling old stories to each other, "and then it just stopped." Mondale added that he's heard second-hand that Kennedy is doing better.

Robert Byrd was also seen leaving the event early, being escorted out in his wheelchair, but at this point it does not appear that his symptoms were as serious as Kennedy's.

Late Update: Byrd's spokesman told the local NBC affiliate in West Virginia that Byrd was not hospitalized. Instead, Byrd left the room because he was upset over Ted Kennedy's difficulties.

Late Late Update: The Associated Press reports that officials at Washington Hospital Center say Kennedy is awake and answering questions.

Dick Cheney may now be the former vice president, but a court ruling handed down yesterday, his last full day in office, could make it less likely that we'll ever get a full account of his role in crucial Bush administration decisions.

The Washington Post reports that a federal judge decided that a pledge from Cheney's office that it will turn over key records to the National Archives, as required by law, is good enough. A coalition of historical and nonprofit groups, alleging that Cheney planned to discard or destroy the records, had sued to require that they be preserved.

Claire O'Donnell, a Cheney aide who handles record-keeping, had said in a sworn deposition that the material would be preserved, and Judge Colleen Kollar-Kotelly said she expects that the VP's office "will, in good faith, comply with" that pledge.

But the plaintiffs are concerned that it won't. Stanley Kutler, an emeritus professor of history and law at the University of Wisconsin Law School, and the author of two books on Watergate, told the Post he's afraid that "when the Archives goes to open Cheney's papers, they are going to find empty boxes."

Kutler added that Cheney "spent most of his time making sure he left no footprints. Why did he fight this order so much if he did not have the intent to leave with these papers? I'm guessing that a lot of it will not be there."

Still, on most of the more far-reaching issues in play, the government lost. The court rejected the government's arguments that the plaintiffs lacked standing, and that no court could review the administration's compliance with the Presidential Records Act, under which the case was brought. It also rejected the strange-sounding claim that that act gave the vice president complete discretion to decide how to comply with it. Judge Kollar-Kotelly rapped DOJ for making "constantly shifting arguments."

But on the immediate -- and crucial -- question of the how much of the ex-veep's records are made available to those writing the history of the Bush administration, we may have to trust Dick Cheney. And that hasn't tended to work out too well in the past.

In recent weeks, the evidence that Bernard Madoff's alleged fraud goes back longer, and implicates more people, than we at first knew, has seemed to grow. And over the weekend, the New York Times added to that impression, with a lengthy takeout on a 1992 SEC investigation into Frank Avellino, an accountant tied to Madoff, who has admitted to not keeping conventional records.

Despite several red flags, the probe ended with Avellino paying only a small fine, and it never appears to have questioned Madoff's own operation.

Here's what seems to have happened:

Avellino and Madoff had had ties going back to the late 1950's, when Avellino worked as an accountant at a firm run by Madoff's father-in-law. Madoff even briefly ran his securities business from Avellino's office.

As the years passed, Avellino gradually shifted the focus of his business from accounting to raising money for Madoff's investment business. Then in 1992, the SEC received marketing materials showing that Avellino and his partner, Michael Bienes, had promised investors returns of up to 20 percent a year. Suspecting a Ponzi scheme, the government launched an investigation.

Avellino's explanation was simply that Madoff -- by then one of Wall Street's biggest stock traders -- was managing the money. Avellino said that if Madoff ever fell short of achieving a 13-20 percent return for investors, then Avellino and Bienes would make up the difference.

And that seems to have satisfied the SEC. As the Times puts it:

No one at the securities commission seems to have questioned why Mr. Avellino and Mr. Bienes offered clients a double-digit guaranteed return on money that they did not even control. Nor do the records offer any hint that the commission considered whether Mr. Madoff, rather than Avellino & Bienes, might be operating a Ponzi scheme.


Avellino returned money to investors, paid a fine, and shut down his business.

But when an audit was conducted by Price Waterhouse, it was discovered that Avellino didn't keep proper records. When Price Waterhouse asked Avellino to do so for 1992, he refused, writing:
"My experience has taught me to not commit any figures to scrutiny when, as in this case, it can be construed as 'bible' and subject to criticism. In this present instance, quite severely. I explained how the profit and loss can be computed from the records you now hold in your possession that Bernard L. Madoff and I supplied."


Still the SEC did nothing, and by the end of January 1993, the audit, too, was over.

Madoff and Avellino appear to still have ties. Madoff's current lawyer, Ira Sorkin, represented Avellino during the 1992 investigation. There's also this:
.In 2003, the Avellinos bought a $4.5 million house in Palm Beach less than five blocks from Mr. Madoff's house there. Their Manhattan apartment is similarly close to Mr. Madoff's apartment.


And Avellino may have been wired into Madoff's alleged fraud right up until the end. the Times reports:
A lawsuit claims that Mr. Avellino warned his housekeeper, who had invested with him, that her money was lost 10 days before Mr. Madoff's fraud became public.


There have been no indications that Avellino is a target of the SEC's current Madoff investigation. But at the least, he's a figure worth keeping an eye on.

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